MFA: Strategic opportunities for foreign exporters
The pandemic hit Jordan hardest in the first half of 2021. The intensified restrictive measures brought further negative impacts on its economy, which was already heavily affected by the previous year’s recession. ¾ of the population works in services. Their continued paralysis (mainly tourism) is the main cause of the record increase in unemployment and national debt – most of the state treasury’s income comes from taxes. GDP growth in 2021 is expected, given last year’s decline and also in the hope of at least a partial recovery of tourism, in the second half of the year.
The improvement of the situation depends, in addition to the overall conditions, on the extent and speed of the necessary reforms (tax policy, amendment of the Investment Act), which are also connected with the MFF loan of USD billion and which would, among other things, facilitate the inflow of foreign capital. The amount and direction of government investment that is now being talked about will play a big role in the recovery, but these considerations have not yet been translated into concrete projects. Priority is given to investments in infrastructure, in projects related to ecological sustainability (especially related to water) and in digitalization. Disruption (albeit very temporary) of supply chains strengthened the call to increase own food production.
Investment plans to revive the economy are still very general, as well as to support foreign investment. Jordan is still primarily focused on saving existing businesses and jobs as well as direct financial support for residents. As of April 2021, more than USD 630 million has been allocated. About 3% of GDP goes towards maintaining the economy.
The government provides interest-free loans to selected companies, interest rates have generally been reduced, and it has again been possible to defer the repayment of earlier loans until the end of the year. The most affected tourism sector should receive additional loans. However, there are fears that the problems with repaying the incurred debts will only delay the support measures and their termination will lead to further bankruptcies and an increase in unemployment.
In addition to steps to increase liquidity or finance the continuation of promising projects, support for start-ups and exports is also implemented. As part of the post-covid recovery, Jordan wants to focus primarily on sectors that generate new jobs – funds in the amount of USD billion should go to the fight against unemployment and poverty by 2024.
According to allcountrylist, the government plans to announce incentives for producing “clean” energy and increasing energy efficiency. Among its priorities, it included the modernization and expansion of the energy infrastructure, both nationally and within the region. In particular, with the reduction/elimination of electricity subsidies (perhaps as early as 2022), pressure should increase for energy-saving solutions, including insulation techniques for buildings, etc. Jordan has the 5th largest oil shale reserves in the world, which it is seeking to exploit. Solar energy is a logical path in Jordan given its conditions.
Investments are made at the state level as well as in the private sector, the problem is pressure on price at the expense of quality. State tenders in this area are published by the local Ministry of Energy and Mineral Resources on their website ( www.memr.gov.jo ). There is continued interest in cooperation in the field of nuclear energy from the Jordanian Atomic Energy Commission ( www.jaec.gov.jo ). Her representative, Ahmad Alsabbagh, can be contacted directly ( [email protected] ).
This sector generates an increasing share of GDP and jobs in Jordan. Jordan has a long-term ambition to be a regional ICT hub and to become a center of IT research and innovation. The priority is to focus education even more towards IT fields and to create ICT incubators at universities. The Jordanian government is interested in artificial intelligence projects, smart cities, and especially smart technologies for transportation and healthcare.
Even in Jordan, the pandemic accelerated the importance of e-commerce and digitization in general. The government is preparing a National E-commerce Strategy and a program to modernize the ICT infrastructure. The digitization of the state administration and the services provided by it is on the way. Tenders are published on the website of the Ministry of Information and Communication Technologies (www.modee.gov.jo).
Jordan Design&Development Bureau ( www.joddb.com, formerly KADDB) is very interested in continuing and expanding cooperation with the Czech arms industry. These include, among other things, chassis for custom-made military cars, ammunition, pistols, forging and casting production lines for arms production. Offers for the defense industry can be addressed directly to [email protected]. The SOFEX fair ( www.sofexjordan.com ) is key for this sector, the next edition of which has been postponed to 2022 (it will probably take place in October).
Water management and waste industry
Difficulties with access to water affect a large part of the rapidly growing population, and demand is also rising across production sectors. Investments in sustainable water management are therefore one of the post-covid priorities, as is greater involvement of the private sector. Innovative solutions for desalination of seawater and sanitation of drinking water, expanding possibilities for greater use of rainwater are being sought.
The relevant infrastructure is planned to be modernized and, last but not least, solutions are being sought to prevent waste, including more economical handling of water in production processes, especially in agriculture, which consumes three quarters of Jordan’s water. Even with regard to the urgency of the whole situation, the European Investment Bank and other institutions are planning extensive financial support in this area. Jordan has a direct Ministry of Water and Irrigation, but the website www.mwi.gov.jo is currently only in Arabic.
Healthcare and pharmaceutical industry
The pandemic showed the shortcomings of the public health system in full light. This also applies to hospital equipment – the number of hospital beds, ICU equipment, including monitors and ventilators, should be modernized and expanded. The plan is to build a new military and civilian hospital and a nuclear medicine clinic. Tenders are announced on the website of the Ministry of Health ( www.moh.gov.jo ). After the easing of the situation, we can expect the return of the importance of medical tourism, which refers to private medical facilities, whose interest is to maintain the reputation of their exceptional level in the region and top technical equipment. The Association of Private Hospitals (phajordan.org) is therefore also an important contact.
Agricultural and food industry
Continued strong population growth in Jordan and surrounding countries ensures a stable demand for food. At the same time, the pandemic has also accentuated the food security issues of the country, which imports 98% of food items. Jordan is looking for ways to boost its own food production by modernizing its agriculture. It also wants to support the increase of added value through the further processing of primary products, especially when it comes to technologies for the processing of fruits and vegetables.
Local farmers, for example, have significant surpluses of fresh tomatoes (despite the fact that they account for 70% of Jordan’s vegetable exports). A promising field is beekeeping, which is “in its infancy” here, although the conditions in the fertile valleys are almost ideal for it. The state supports hydroponic cultivation and fish farms.
Rail and rail transport
Jordan has the prerequisites to be an important transport hub in the region and, in this context, has, among other things, ambitious plans to connect the Saudi Arabian railway network through its territory with the railway infrastructure on the Mediterranean Sea. The reconstruction of at least part of the railway line from the strategic sea port of Aqaba towards the interior appears to be a necessity. The pandemic has put these projects on hold, but there are already talks of resuming them. Any tenders would be published on the website of the Ministry of Transport ( www.mot.gov.jo ).