Jordanian Ambassadorial Roundtable

ABCC hosts Jordanian

Ambassadorial Roundtable

H E Mr Manar Dabbas speaking to the roundtable of potential investors. Rt Hon Baroness Symons, H E Mr Manar Dabbas, Jordanian Ambassador (left), Mr Bandar Reda and Mr Abdeslam El-Idrissi.

Photo by Spencer Davis on Unsplash

The Arab British Chamber of Commerce hosted an Ambassadorial Roundtable for Jordan on 25 January during which His Excellency Mr Manar Dabbas, the Ambassador of Jordan, provided a keynote address which concentrated on the many economic attractions of the country and the growing opportunities that exist for much closer cooperation with the UK.

Many leading investors and officials participated in the roundtable, including diplomats, bankers and investors from a broad cross-section of sectors. Mr Bandar Reda, Secretary General & CEO, ABCC, welcomed guests and the Rt Hon Baroness Symons, Chairman of the ABCC, chaired the discussion. She introduced the ambassador by describing his impressive career as an advisor to H M the King of Jordan and as a top official at the Royal Court in Amman. Among the distinguished guests present was the newly appointed Ambassador of Egypt to the UK, H E Mr Sherif Kamel, who offered his observations on Jordan’s prospects after having previously served as his country’s ambassador in Amman.

In his presentation, H E Mr Manar Dabbas drew attention to the growing potential for doing business in key sectors making mention of renewable energy, ICT, manufacturing, agriculture and food production, pharmaceuticals and healthcare, textiles and garments, as well as tourism. On the latter subject, the Ambassador pointed out that Jordan’s new tourism strategy had been launched in November 2021 at the Chamber and formally during the World Travel Market in London.

In all these areas, opportunities for UKJordan collaboration were on the increase especially now that business activities were resuming following the pandemic. The Kingdom should be seen as a gateway to the regional markets of the MENA and beyond because of Jordan’s strategic location and due to trade agreements concluded with numerous countries, the Ambassador stated. The terms of these agreements gave investors access to a combined market of over one billion consumers.

He highlighted in particular the agreement with the United States which had led to a rapid increase in bilateral trade since it came into force.

In addition, Jordan had reached numerous tax and investment agreements with different countries, which provided protection for investment in the country. Notably, Jordan was renowned for its advanced infrastructure and business friendly environment driven by a proactive government in Amman that seeks to encourage and facilitate investor initiatives. Speakers at the roundtable praised Jordan for the support given to business, including the many incentives that were available. New infrastructure initiatives included the development of a rail network and a regional power grid connecting Jordan with its neighbours. A recent plan to link up Jordan, Egypt and Iraq should be promising for future investment opportunities.

One key asset that came under scrutiny was the highly educated, skilled and motivated local workforce, which offered a pool of talent available for companies setting up in the country. Many Jordanians were technology trained and proficient in languages which were skills in high demand among tech companies who had chosen the country as a base for their regional operations. There were now upwards of 3,000 firms working in the Jordanian ICT sector, such as tech giants like CISCO. A successful outcome of the consistently high investment in education made by Jordan was the number of engineers and doctors, which were well above any regional average.

The Ambassador stated that Jordan wanted to boost its exports to the UK so that more Jordanian products were on sale in the UK market, especially food produce. Jordan was also an important location for medical tourism and could offer competitive costs that would allow the UK to manage its health requirements more effectively. The discussion, chaired by Rt Hon Baroness Symons, touched on investment potential in the expansion of the Jordanian mining industry, especially in relations to precious metals such as copper and zinc; plans to diversify Jordan’s energy sources by developing solar, wind power and hydrogen, taking measures to increase energy efficiency and how Jordan was moving forward with regional power projects.

Several Jordanian investors who were based in the UK delivered remarks about the potential in different areas and argued for closer cooperation between UK and Jordanian private sectors.

OPPORTUNITIES IN JORDAN – POPULATION, LOCATION AND INNOVATION

Jordan has been described as a country where opportunities abound and which boasts many assets such as its educated population, strategic location and reputation for innovation. In an October 2021 assessment, the World Bank estimated that Jordan’s growth would average 2.3% once the global economic recovery consolidates, which would return Jordan to its prepandemic performance level.

“Jordan’s economy has weathered the COVID-19 shock better than many peers. Yet high unemployment (particularly among youth at 48%), widening external imbalances, rising debt, and low levels of investment pose significant challenges to a robust recovery. Jordan needs to stay the course on reforms to promote investment-led growth and job creation,” the World Bank observed.

“Jordan’s real GDP is projected to grow at 1.9% in 2021, as economic indicators suggest an upswing in private demand while global demand remains supportive. Although early indicators point to some output recovery (such as real estate sales, construction activity and industrial production), Jordan’s private sector may not be able to galvanize quickly, while the government is contending with lack of fiscal space. Hence, the rebound of the economy is expected to be gradual in the next few years. Once global recovery consolidates, vaccination expands, and tourism recovers, growth is projected to average around 2.3%, consistent with the pre-pandemic performance.”

Jordan boasts many attractions for investors and offers distinct advantages. It is a youthful country, with a growing, increasingly educated and skilled labour force. Its central location in a geopolitically important region has brought it significant benefits. Its diverse geography and unique cultural, religious, and historical heritage have the potential to spur significant growth in the vital tourism industry going forward post-pandemic.

Innovation

The most promising of all aspects of Jordan is the potential for innovation, productivity, and growth achieved through its harnessing of ICT, according to the World Bank. This sector remains ripe for expansion although an emergent ICT sector already exists in Jordan with global giants such as Cisco, Expedia, HP, Microsoft, and Oracle already having established operations in the country. Jordanian information technology outsourcing (ITO) and business processing outsourcing (BPO) companies have expanded to service regional and international clients; and a nascent digital and entrepreneurship ecosystem

has emerged. Beyond the promise of the sector itself, however, ICT offers the prospect of support to the modernization and transformation of other industries and related services, says the IFC/World Bank its report, Creating Markets in Jordan: Country Private Sector Diagnostic.

Private Sector is Key to Jordan’s Economic Future

The report Creating Markets in Jordan suggests that bolstering private investments across the country – including in tourism, logistics, and information and communication technology – would support job creation, spur innovation, and help Jordan recover from the economic fallout of COVID-19.

The report commends Jordan for activating private investments in infrastructure, especially in renewable energy. For the past five years, the equivalent of about 2 percent of GDP has gone into infrastructure-related public-private partnerships annually. While praising the Kingdom’s “real progress in improving its business climate”, the report suggests that Jordan’s foreign investment regulations should be simplified as a means of encouraging firms to enter the market.

• On tourism, the report argues that

Jordan, with a combination of ancient attractions and balmy temperatures, has the potential to become a major tourism destination. • Its technology sector, which includes a mix of homegrown startups and technology giants, like Microsoft and

Amazon, is also primed for growth. • The same holds true for the logistics industry, where a surplus of techsavvy young people could help develop the connected transport and logistics systems of tomorrow. “There’s no doubt that the tourism, logistics, and information technology sectors are brimming with promise,” said Saroj Kumar Jha, Mashreq Regional Director, World Bank Group, commenting on the report. “In the years to come, the key will be to create a level playing field in these industries. That would allow innovative, well-run companies to succeed, which, in turn, would help create jobs and drive the growth Jordan so acutely needs.”

Tourism

Jordan’s Minister for Tourism was in London in November 2021 to launch the new brand, Kingdom of Time, showcasing it at the World Travel Market in London and speaking about it at the ABCC.

Through this rebranding, Jordan is reintroducing itself as an accessible, intriguing and multifaceted destination that will appeal to the modern tourist who is independent, active, digitally-empowered seeking to explore and find meaningful experiences and human connections.

Beyond Jordan’s well-known attractions like Petra, the kingdom receives global attention for its award-winning nature spots and adventures like the Jordan Trail that traverses the Kingdom from north to south offering views of the Jordan Valley and the Dead Sea at the world’s lowest point. Amman is a magnet for urban and town tourism, attracting seekers of authentic flavours to enjoy the culinary delights of the Jordanian kitchen. In 2020, the COVID pandemic brought to an abrupt halt what was already a remarkable multi-year acceleration and diversification of Jordanian tourism. With the Kingdom becoming easily accessible through low-cost airlines, Jordan is able to attract a new generation of visitors to experience its majestic ancient landscapes. To recover from COVID-19, Jordan has built a strong partnership between public and private sectors in the tourism industry to put together international standard operating procedures for all of its tourism segments, following its success in being one of the leaders in the region for vaccination of the tourism sector.

“Jordan is back, delighted to have launched its new tourism brand, as an authentic reflection of a destination which can be considered as a miniature continent when it comes to its diverse landscapes, fuses together a dizzying collage of geological natural and urban diversity, historical richness, a tradition of spirituality and faith, and a contemporary Arabian culture of openness and warm hospitality that welcomes everyone for leisure, business and healing,” said Nayef Al-Fayez, Jordan’s Minister of Tourism.

“Jordan’s new tourism brand that was launched last November along with the new national tourism strategy that was also launched a few weeks ago taps into targeting new age groups of tourists planning their travel, with the new lowcost carrier flights to Jordan from Europe we hope to bounce back faster than we expected. Ryanair has launched new routes to Jordan including a new route that was inaugurated last November from Adolf Suarez Madrid Airport that is key for the Spanish traveler including the current national carrier Royal Jordanian flights, along with Jordan signing new agreements with Wizzair and new routes launched by EasyJet into southern Jordan – Aqaba,” said Dr Abdel Razzaq Arabiyat, Managing Director of the Jordan Tourism Board.

UK-Jordan Trade

Total trade in goods and services (exports plus imports) between the UK and Jordan was £623 million in the four quarters to the end of Q2 2021, an increase of 4.7% or £28 million from the four quarters to the end of Q2 2020. Of this £623 million:

• Total UK exports to Jordan amounted to £487 million in the four quarters to the end of Q2 2021 (an increase of 7.0% or £32 million compared to the four quarters to the end of Q2 2020);

• Total UK imports from Jordan amounted to £136 million in the four quarters to the end of Q2 2021 (a decrease of 2.9% or £4 million compared to the four quarters to the end of Q2 2020).

Jordan was the UK’s joint 88th largest trading partner in the four quarters to the end of Q2 2021 accounting for 0.1% of total UK trade.

In 2019, the outward stock of foreign direct investment (FDI) from the UK in Jordan was £11 million, on ONS data. In 2019, the inward stock of FDI in the UK from Jordan was £239 million.

Goods that the UK Exports to Jordan

Major items exported to Jordan include general industrial machinery, mechanical power generators, vehicles, medicinal and pharmaceutical products.

Goods that Jordan Exports to the UK

UK imports from Jordan include mechanical power generators, vegetables, metal ores, clothing and general industrial machinery.

Jordan-UK Association Agreement in force

A Jordan-UK Association Agreement, that replaces the EU agreement, was signed on 5 November 2019. A Jordanian Royal Decree was then issued on 25 February 2021 and the Jordanian government formally confirmed on 1 March that all their procedures been completed.

The UK Government having confirmed that all its procedures were completed finally enabled the agreement to come into force on 1 May 2021. On welcoming the agreement, UK Minister for Middle East and North Africa, James Cleverly, had stated: “As we celebrate 100 years of UK-Jordan friendship, today’s new UK-Jordan trade agreement is an important step forward for our countries which will provide a boost to British and Jordanian businesses and ensure that friendship continues to grow and flourish.”

The UK and Jordan have now reached positive trade agreements and partnerships across various sectors including education, aviation, retail, biometrics and technology.