FDI hitting new levels in Jordan

Over the past month, local investment has sneaked ahead once more but the level of FDI in Jordan has rocketed this year and, with a month or more still to go, is nearly four times up on last year. The kingdom doesn't have to look too far to find the source of all this new money - as most of it is coming from its troubled neighbour Iraq and the Gulf States, awash with petrodollars despite recent oil price dips.

Polarised investments

The bottom line for Jordan is that it doesn't really matter where the money comes from as long as a significant amount of it is channelled into the kingdom's economy. The figures certainly show this to be the case. Back in 2002, a total of $428 million was invested with a relatively paltry $186 million of it coming from foreign pockets; in the first nine months of this year alone, $2.3 billion has been pumped into a myriad of projects and, of that, nearly $1.2 billion of it has come in the form of FDI.

But clearly the one down side to Jordan's increasing popularity is that such an overwhelming majority of the investment is regional. More than 90 per cent of it is from Arab sources, with the US, Canada and Europe, for example, investing a shockingly low combined total of $42.9 million in new projects in the first nine months of the year. Much of Jordan's foreign cash, 80 per cent of it, has been poured into the industrial sector with 14 per cent earmarked for the country's growing tourism industry.

JIB efforts

But the Jordan Investment Board is not content to rest on its laurels and has been pro-active in trying to drum up further interest in the country, not only from the Gulf where it has opened new offices in the UAE, Kuwait, Qatar and Saudi Arabia but also from relatively indifferent sources.

Earlier this month, King Abdullah visited the UK as part of a seminar held in London to promote opportunities in Jordan and helped generate a possible $40 million worth of future investment in the automotive, chemical and pharmaceutical industries. Just last week, the JIB briefed top Singaporean executives on the large-scale projects lined up for the kingdom and the attractive investment environment that exists.

Speaking to the Jordan Times, the JIB's CEO Maen Nsour said, 'When investors look at Jordan they are not thinking solely about the local market but are taking into consideration the fact that through Jordan they can reach 1.3 billion people, which is the combined population of the countries with which Jordan has trade agreements.'

Indeed, Sharif Zu'bi, Jordan's Justice Minister and former Trade Secretary, pointed out in October that the kingdom's free trade agreement with the US had almost tripled bilateral trade over the last five years, while the country's Qualifying Industrial Zones, with their duty free benefits, had brought in more than $700 million worth of investments and created over 50,000 jobs.

Further encouragement

Meanwhile, this week, an investment report issued by the United Nations Conference on Trade and Development, and cited by the Jordan Times, has placed the kingdom in the world's top 20 for foreign direct investment. With the global rate of FDI jumping by 29 per cent in 2005, and Jordan's economy set to grow by six per cent, on the back of a seven per cent lift last year, the JIB could soon be set for even more impressive statistics.