Jordan was ranked a mediocre 65 out of 137 countries in the World Economic Forum’s latest global competitiveness report. When will we admit that our economy isn’t being run effectively?
According to the Global Competitiveness Report of the World Economic Forum 2017/2018, Jordan’s most problematic factors are tax rates, access to finance, policy instability, inefficient government bureaucracy, inadequately education workforce, and tax regulation.
This means that from a strategic SWOT analysis all problematic factors are domestic issues the government is perfectly capable of tackling. In other words, the weak points in our investment environment are primarily the fault of internal factors and nothing to do with any other regional or global situation.
But to be fair, the report clearly presents Jordan as a country with fairly stable and efficient institutional system and a relatively good infrastructure. It also shows that Jordan has a good innovation setup and a good business sophistication. To this end, what policy makers in Jordan need to do is to analyze the 12 pillars of the report and decide that they will work seriously on improving Jordan’s position over the coming three to five years in each of the problematic areas.
For example, in terms of institutions, a committee should be formed to handle the issue of why Jordan ranks 126 out of 137 in the indicator concerned with the strength of investor protection. Here we need to see what are the things that the top 10 countries are doing right which we are not. At least we have to ask ourselves why the UAE ranks 16 in this indicator while we rank 126. Then we need to take the corrective action to jump to the right position.
In terms of infrastructure, we need to know why Jordan ranks 102 out of 137 in the indicator of fixed-telephone lines while we have a fairly advanced telecommunication system. A subcommittee should take on that issue and check on other countries to see how we can introduce improvements here too. While in the matters of education and training, Jordan needs to work more seriously on the primary and secondary enrollment rates, which I believe the Ministry of Education is seriously working on.
The government also needs to work with the private sector to improve the efficiency of the tax and tax incentive system, and on the non-tariff barriers. Cooperation between the private and public sectors can substantially improve our position on issues like women’s participation, legal rights, willingness of businesses to delegate authorities, and capacity of innovations.
But none of this will come to anything if the mismanagement of the economy, which was cited in the report, isn’t dealt with effectively. The economy needs a full policy revamp. The private sector’s cooperation must be sought in order to enhance investment and then to correct all poor macroeconomic indicators, including growth and unemployment.