The man responsible for boosting investor interest in Jordan is confident more FDI is on the way.
According to the Central Bank of Jordan (CBJ), foreign direct investment in the Kingdom increased by 7.2 percent in 2017, reaching JD1,182 billion, compared with JD1,102 billion in 2016. Most of these investments were concentrated in the industry and tourism sectors.
Muhannad Shihadeh, the Minister of State for Investment Affairs as well as and the President of the Jordan Investment Commission (JIC), believes with all the challenges Jordan is facing, these figures indicate the investment environment is healthy and capable of attracting even more interest from outside.
Are you satisfied with the current investment climate and what should be done to improve it and facilitate investments further?
Yes I am satisfied, but we still need to exert more efforts to attract more investments. Over the past few years, the government embarked on introducing progressive changes in legislation and infrastructure that included expansion in development zones and investment-attraction schemes. Continuous coordination among the different institutions of the government is taking place to unify and standardize the investment procedures with the aim of creating a pro-business environment, which was reflected by the latest improvement in Jordan’s ranking at the ease of doing business indicator (2018) jumping 15 places from a year before.
Jordan ranked 103 among 190 countries in the World Bank’s Ease of Doing Business report. How do we plan on improving this position further, particularly when it comes to protecting minority investors, transparency, resolving insolvency, enforcing contracts and facilitating access to funding?
We can improve it by having the proper legislations and working hard to make sure we are implementing them in a transparent and effective way. Once the investor has the confidence in the investment legal framework, this will reflect on the investment environment, which will not only improve our position in the report, but also lead to attracting more FDIs.
Currently, the Jordanian government is working on modernizing several laws that are related to economic activities. Just recently, two important laws were approved by the parliament, the amended companies law and insolvency law.
What are the measures the commission has adopted to attract more Arab and foreign investments?
Under the Investment Law No. (30) of 2014, the investment environment was created to provide the necessary elements to attracting all kinds of investments, either local, regional or international.
Under this law, investors are offered tax and customs exemptions, incentives, and diverse options of development zones located in different parts of Jordan. On the other hand, several procedures were taken by the JIC to ease the investment registration process by reducing registration approvals to seven days, one [day] security approval, offering the investment window and automating the JIC’s services. In addition, a fast track for investors was introduced at Queen Alia International Airport.
Other important advantages Jordan has to offer to Arab and foreign investors include its strategic location in the Middle East, a range of bilateral and multilateral free trade agreements with countries around the world, enabling duty-free and quota-free access to markets, hub and springboard for businesses wishing to take part in reconstruction projects in neighboring countries, business services and back office hub, and the human capital, having some of the highest quality professional talent available in the Middle East.
What role are Jordan’s FTAs playing in attracting potential investors?
In recent years, Jordan has made efforts to increase its network of FTAs. Significant FTAs were signed with the United States, EU and Canada. These agreements allow investors to access a market of over 1 billion consumers. Investors can utilize the FTAs and export their products to reach these major markets by investing in Jordan. We have several success stories for foreign investors that established garment facilities in the Kingdom and are exporting to these markets. Promoting trade and exports is a key aspect of Jordan’s development policy. As a developing country, increasing exports and maintaining a healthy trade balance with its trading partners are among the government’s most important goals.
Who do you expect will benefit the most from the government’s new decision allowing investors to acquire the Jordanian nationality?
The Jordanian government is always seeking to take decisions, procedures and policies that will stimulate investments, and the newest regulation concerning citizenship is a step in that direction. The regulation was launched more than two months ago, and so far, the JIC received 58 applications, all of which were from Arab investors. So I believe we are moving in the right direction in this regard.
Recently, Groupe Aeroports de Paris announced it increased its shares in Queen Alia International Airport to 51 percent. How important is this new acquisition and does it reflect the investors’ confidence in Jordan’s investment climate?
The airport project reflects the vision of His Majesty King Abdallah II to build a true partnership between the public and private sectors. After 11 year from signing the airport agreement to building one of the most important airports in the region, we witnessed a new achievement through France ADP Group increasing its shares to 51 percent. This achievement is not only considered an acquisition, but it is a strong message that the Kingdom is capable of becoming an investment destination and gaining the trust for important foreign investments.