King: Jordan attaches
great importance to private sector investment
His Majesty King Abdullah II discussed with a
delegation representing the Citibank Group and the US Overseas Private
Investment Corporation their contributions to back major development
projects to be carried out in Jordan in the coming few years. The King
said Jordan attaches great importance to private sector investment in its
major projects, which he said, gives impetus to the economic development
process. Anthoni Nilsson, City Bank Deputy Board Chairman and head of the
delegation, pointed out that Jordan can benefit from OPIC's long-term
financial guarantees against political or commercial risk, noting that
such guarantees can reach $400 million. OPIC, a US government agency that
sells political risk insurance and loans to help US businesses of all
sizes, invest and compete in more than 150 emerging markets and developing
nations worldwide.
Jordan-Egypt
gas pipeline goes on stream
A strategic pan-Arab gas pipeline
between Jordan and Egypt went on stream, at the end of July, as King
Abdullah II and President Hosni Mubarak officially opened the channel. The
270-kilometre pipeline is the first phase of an inter-regional economic
venture, estimated at more than $1 billion, that will later stretch to
Syria, Lebanon in 2005 and beyond to Cyprus and Turkey by 2006. A
16-kilometre marine link between Taba and Aqaba, completed in just 18
months, marked the first phase of the project through which 1 billion
cubic meters of Egyptian natural gas will be supplied each year.
Minister of Energy and Mineral Resources Mohammad Batayneh said Egypt's
gas supply is expected to save the Kingdom $50 million each year, whilst
also providing a low-cost and less harmful source of energy.
Jordanian
envoys meet at Amman and Petra
Under the patronage of His Majesty King Abdullah II,
the Second Forum of Jordanian Ambassadors took place in Amman and Petra.
Jordanian ambassadors discussed at the forum, entitled “Towards an
excelling diplomatic role”, the role of diplomatic missions abroad
to enhance Jordan's political and, mainly, economic role. During the
forum, The King launched a fund to enhance the Jordanian embassies'
capabilities and support their role in promoting economic reforms. The
King said the fund will support the new inclination to give embassies an
active role in advancing the national economy and promoting economic ties
with other world countries.
The
King called on senior diplomats to focus on boosting the Kingdom's
economic ties with other countries and foreign private sector companies.
Many representatives of the private sector attended the three-day forum
and held discussions with the Jordanian envoys to enhance means of
cooperation. Foreign Minister Dr. Marwan Muasher said the main idea behind
the forum is to emphasize that the embassies' economic work is as
important as their political activities. He urged diplomatic missions to
invest in Jordan's strong political ties with many of the world's
countries in a manner that would help boost the national economy.
Jordanian and Iraqi businessmen to set up $70.4m investment
firm
Jordanian and Iraqi businessmen have agreed to set up a joint investment
firm to assist in the reconstruction of war-ravaged Iraq, according to
Khaldoun Abu Hassan, one of the company's founding members. Abu Hassan
said the Jordanian-Iraqi Development and Investment Co., with a capital of
US$70.4 million will be based in Amman, and offices will soon be opened in
Iraq. Abu Hassan said the investment firm, the first of its kind since the
end of the war, is a shareholding company. About 30 Iraqi businessmen and
40 Jordanian business executives and bankers laid the foundation for
establishing the firm.
Industry and Trade Minister Mohammad Abu Hammour, who
attended the company's launching ceremony, stressed the government's
readiness to provide all facilities and to streamline procedures to make
the company's work a success. Federation of the Jordanian Chambers of
Commerce President Haidar Murad said the company will participate along
with other private sector institutions in projects to rebuild Iraq.
Preparations
under way for first IP conference
Jordan is gearing up for the region's first
Intellectual Property (IP) conference to be held here during the second
week of August amidst high expectations for spreading awareness on IP
protection mechanisms and highlighting its impact on social and economic
development. Several key organisations known for their role in developing
IP worldwide are expected to attend the Intellectual Property Week, slated
for Aug. 11-14, including the US Patent and Trademark Office, the World
Intellectual Property Organisation (WIPO), the United States Agency for
International Development (USAID) and a number of local and Arab public
and private organisations.
According to the Jordanian Intellectual Property
Association (JIPA), the event organisers, the country's regulatory
environment meets the highest international standards and thus is a model
for the region. The country has taken long strides in upholding IP
protection laws upon its ascension to the World Trade Organisation in 2000
and after signing the free-trade agreement with the US in 1999.
EC
Delegation regards Jordan as best performer of Euro-Med partners
The European Commission (EC) Delegation in Amman
published its annual report for 2002, highlighting that Jordan was by far
the best performer amongst the 12 Mediterranean countries in the Euro-Med
partnership. The Kingdom made use of over 67% of the committed grants,
well above the average disbursement rate of 39% for all countries adhering
to the MEDA programme - the financial instrument of the Euro-Med
partnership. The report recognised that Jordan had managed to push
economic growth to 4.9% year, despite external shocks and increasing
tension and uncertainty in the region. It also praised the economic reform
programme, hinging on modernisation, investment promotion and the
development of a competitive private sector equipped to capitalise on the
free trade agreement with the US, the association agreement with the
European Union (EU) and a comprehensive drive towards free trade and
liberalisation.
IMF
Completes 1st Review of Jordan's Stand-By Arrangement, Approves
US$30 Million Disbursement
The Executive Board of the International Monetary
Fund (IMF) completed the first review of Jordan's performance under a
two-year $119 million stand-by arrangement, approved on July 3, 2002. This
decision entitles Jordan to the release of about US$30 million, which
brings the total amount available under the program to US$45 million.
According to an IMF press release, the government does not intend to draw
on the financing made available given the strength of the Kingdom's
external position. In approving the disbursement, the IMF 's executive
board also granted a waiver of the country's nonobservance of the
structural performance criterion regarding the pension reform strategy and
disability pensions.
Anne Krueger, first deputy managing director and
acting chair, said "the Jordanian economy performed strongly
through 2002, despite the difficult regional environment, and the
authorities should be commended for their commitment to sound
macroeconomic policies and far-reaching structural reforms. The external
sector has shown noteworthy strength, reflecting the authorities'
steadfast approach to structural reforms, including trade liberalization.
Going forward, continued export-led growth will be key to help raise
living standards and employment, and alleviate poverty."
Investments
rise 56% in 7 months
The volume of licensed investment projects in Jordan increased by 56% in
the first seven months of 2003 to reach JD160 million (€192
million) compared to JD91 million (€ 110 million)
in the same period of 2002. Despite the increase, the 2003 projects were
below those of the previous years of 2000 when the volume reached JD793
million (€955 million) and 2001 when it logged JD881 million (€1.061 billion), according to
official statistics. The decrease was due to regional instability
resulting from the Intifada and the war on Iraq which scared away
investors.
As the political situation improves, investment
activities are gradually recovering, according to an informed source who
expressed hope that the volume of investments would reach the JD500
million (€602 million) figure by the end of this year.
The industrial sector topped the list of investment
projects in the first seven months of 2003, registering 89% of the total
investment, followed by the hotels sector at the rate of 7%. The remaining
amount included investments in agriculture, hospitals, railways, tourism
and entertainment businesses.
S&P’s
raises Jordan ratings despite regional tensions
Standard & Poor's Ratings Services has raised its
long-term foreign currency ratings on Jordan to 'BB' from 'BB-', and its
long-term local currency ratings to 'BBB' from 'BBB-'. At the same time,
Standard & Poor's affirmed its 'B' foreign currency and 'A-3' local
currency short-term ratings on Jordan. The outlook is stable. "The
upgrade reflects the expected gradual decline in the net general
government debt, to 63.5% of Gross Domestic Product (GDP) in 2006 from the
current 84.5%, as a result of favorable debt treatment, debt swap
operations, and moderate fiscal deficits," said Standard &
Poor's credit analyst Serge Ghanem.
Despite the current regional problems, the
authorities' commitment to accelerating the pace of structural reforms in
the context of the Plan for Social and Economic Transformation, aided by
generous external grants and a stable monetary environment, will underpin
economic growth prospects of 5.5 –6% from 2004.
IFC
and Citigroup establish $70m trade facility in Jordan & invest $15m in
Jordan's pharmaceutical sector
The International Finance Corporation (IFC), the
private sector arm of the World Bank Group, and Citigroup signed a $70
million trade enhancement facility designed to provide financing for
private sector importers of capital goods and raw materials in Jordan and
Lebanon. The facility includes four banks: Cairo Amman Bank and Export and
Finance Bank in Jordan and another two banks in Lebanon. Citibank, N.A.'s
branches in Jordan and Lebanon also benefit from the facility. IFC is
guaranteeing 50% of each transaction in all cases.
Karl Voltaire, IFC's director for global financial
markets, said: This facility enhances the availability “of trade
finance to importers in the Middle East region by helping supplement
country limits currently available to commercial banks operating in Jordan
and Lebanon. It will help maintain the level of trade finance flows to the
private sector in Jordan and Lebanon at a time when such finance is
needed.”
The IFC has also signed an agreement to provide a $15 million corporate
loan to support the expansion of the Hikma Group, a Jordanian
headquartered multinational pharmaceutical company. The transaction will
help finance a number of Hikma's on-going projects, including enhancing
production and R&D facilities in Jordan, establishing a new facility
in Algeria, and expanding its production facility in Portugal. The project
will have a strong developmental impact by increasing the competitiveness
of one of the few emerging Jordanian global players and contributing to
the growth of the Jordanian pharmaceutical sector, a major contributor to
the country's exports.
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