Jordan needs to do much more to attract much-needed foreign direct investment (FDI.) Here’s how to generate investor interest.
It will come as a surprise to no one to learn the UAE is the largest landing hub for foreign direct investment in the region. The country received almost $129 billion in FDIs last year. Jordan, on the other hand, only managed to capture about 10 percent of this figure.
I have to concede the government has been trying hard of late to generate investor interest in the Kingdom’s economy. However, I believe much more can—and should—be done.
To this end, one of the first and foremost steps Jordan needs to do is to analyze its position in the WEF’s Global Competitiveness Report (GCR), and in the IFC’s Doing Business Report (DBR). We should stop hiding behind different types of excuses, including the political and social unrest in the region.
The two reports clearly show that most of the impediments to FDI flow are internal and not related to the regional situation. This means that even if the region settles tomorrow we still need to do a lot to make our investment environment appealing to FDI. So it is time to work on those internal issues and endogenous bureaucratic procedures if we are serious about attracting FDI.
It is well known that foreign investors review the rank of a country in both GCR and DBR before they jump into any investment opportunities in that country. Here, we need to ask ourselves how did the UAE managed to jump from a position that was behind Jordan when the Kingdom was ranked among the top 40 countries almost 15 years ago? Today the UAE is ranked 16 worldwide in GCR, while Jordan’s ranking deteriorated, slipping to 68 from 54 a decade ago.
However, it is worth mentioning that the decision has been made in the UAE to be ranked among the top 10 countries in the GCR within the coming five years and I think it will happen for sure given the government and leadership’s determination to pave the way and take all necessary steps to reach that position.
The prescription is very clear. We need to learn from others. The magic prescription is composed of a permanent supreme committee led by the government and comprising all stakeholders from the private and public sectors, as well as experts. The committee has to meet regularly (perhaps twice a month) to review Jordan’s position in each of the DBR’s and GCR’s indicators. The committee would then compare the country’s position in each indicator with that of the top five countries.
In conclusion, if we really mean business and we want to attract FDI to boost economic growth, then there are many things that need to be done first. But the most important step would be to look at the best practices developed by others. And by this I mean we need to learn from “doers,” and one of the main doers is only three hours away by plane. Will we? I hope so.