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The Role of Jordanian Private Sector in the Reconstruction Of Iraq 1 I)
The Jordanian Private Sector
Following
the outbreak of the first Gulf War in 1991, Iraq became Jordan’s main trading
partner where goods were exported to Iraq in return for oil under the UN
food-for-oil program. Due to the
geographic proximity, and the similarity in the culture and mindset of the two
countries, trading activity between Iraq and Jordan began to witness an upsurge
with significant spillover effects onto other auxiliary services that
facilitated this flow of goods including transport and financial services among
many others. The Port of Aqaba also
became the main conduit of transit trade, thereby further boosting the
activities of the maritime and land transport sectors in Jordan.
As exports to the Iraqi market flourished, Iraq became the sole supplier
of Jordan’s oil needs. Oil was received at a very generous discount worth around
US$500-600 million per year, with US$300 million of this discount received in
the form of a fiscal grant. In
2002, total exports to Iraq exceeded in value US$400 million, comprising more
than 20% of the total value of Jordanian exports. The
Jordanian private sector was swift to take advantage of the food-for-oil
program, as many traders and industrialists geared the bulk of their businesses
to cater to the Iraqi market. Subsequently,
the Jordanian private sector developed extensive knowledge and understanding of
the Iraqi market needs, requirements and specifications, in addition to consumer
tastes and preferences. As a
result, Iraqi traders, importers and consumers alike developed a preference to
Jordanian products. The private
sector is well established in Jordan, and plays a significant role in exports
and job creation. It enjoys an
excellent physical and financial infrastructure, and is driven by a highly
educated, well-trained and professional workforce that has been instrumental in
the building of many economies in the Gulf.
This sector has shown a proven record of resilience and flexibility, by
also capitalizing on the trade agreements that Jordan enjoys with the United
States and Europe, thereby penetrating these non-traditional competitive markets
with high value-added products and services. The ability to cater to both regional (mainly Iraq) and
Western markets, qualifies the private sector to stand in a very unique position
to facilitate the revitalization of businesses between Iraq and the United
States. Given the geographic
proximity and the well established transportation routes and channels further
strengthen the private sector’s position to instantly mobilize to conduct
business in Iraq. Specifically, Jordanian
businesses can fulfill a good percentage of products needed in Iraq immediately,
for all of the above reasons as well as the availability of production lines,
raw materials, manpower, spare parts and know-how. II) Leading Economic
Activities
The
following are leading private-sector economic activities that have witnessed
substantive growth potential over the years, and have contributed to economic
growth with their high value-added products and services.
Their capabilities extend well beyond the domestic market, compiling
years of business expertise in many highly complex and competitive regional and
international markets.
II.1
– Construction The
construction sector in Jordan is well poised to take an active role in the
rebuilding of Iraq. The sector is
almost entirely controlled by the private sector, and has substantive and
diverse expertise in construction projects throughout the region.
Domestically, the private construction sector has executed the majority
of public-works contracts ranging from building roads and sophisticated bridges,
to drilling wells and erecting dams. Engineering consultants in Jordan have been
active exporters of engineering services to countries in the region, in addition
to African and CIS states.
High-quality
construction material is also produced locally including cement, rebar steel,
extruded aluminum (windows and doors), ceramics, tiles, paints and furniture
(standard and specialized, kitchen, doors, etc.), thereby allowing the sector to
be vertically integrated. The
sector is also supported by a highly qualified local engineering and technical
workforce with substantive years of large-contract expertise particularly in the
oil-rich Gulf countries. Jordanian
firms are also experienced in working with American contractors and with USAID
procedures and standards. II.2
– Pharmaceuticals The
pharmaceutical sector in Jordan is one of the most thriving and successful
export-driven sectors in the region, with over 75% of its production sold to
over 60 countries, including the world’s most stringent markets such as Europe
and the United States. In
2002, total pharmaceutical exports to Iraq amounted to around US$50 million,
comprising around 10% of total export to Iraq.
Jordanian pharmaceutical products have secured a strong market share of
around 20% in Iraq, and people have built strong confidence in their quality.
Products sold included injectable and oral antibiotics, cardio-vasculars,
antidiabetic products, anaesthetics and energetics. II.3
– Information & Communications Technology
Jordan’s
ICT sector has grown from a US$60-million market in 1999 to over US$200 million
by end 2001. Employment within the
sector has more than tripled and exports have increased by over 350 percent.
While 70 percent of Jordan’s exports are generated within the region,
another 19 percent is materialized from exports to the United States, thus
re-enforcing the country’s strong understanding of the business world in both
regions. Contributing
in the form of sub-contractors, Jordanian firms are well positioned to offer
substantial value in these areas: ·
Software
development/ complete solutions. ·
E-Business &
E-Government. ·
E-Learning. ·
Arabic web
content development. ·
Multi-media &
animation. ·
Outsourcing/
distinct code writing. II.4 – Services
II.4.1
Legal Services
Jordan
has witnessed in recent years an accelerated economic reform process through
dynamic privatization schemes and rapid integration into the global economy.
This was evident by Jordan’s accession to the WTO, the signing of the
Free Trade Area Agreement with the United States, the Partnership Agreement with
the European Union, and the Free Trade Area with Arab countries.
Liberalization and global integration necessitated a new legislative
framework, which encompassed the amendment and redrafting of over 150 laws and
regulations including Labor, Income Tax, Company's, E-Transactions, Financial
Leasing, Securities, Copyright, Patent, Telecommunications, Banking, Media, and
many others. Jordanian
law firms have therefore complied an extensive expertise, which can be tapped
into when Iraq undergoes a similar liberalization and global integration scheme.
II.4.2
Medical Services The quality of Jordan's health care system has improved
dramatically over the last two decades placing it among the top 10 countries in
the world in reducing infant mortality. The standard of health services and
medical facilities in Jordan, particularly in the private sector,
is among the best in the region. Jordan has 19.8 physicians, 5.5 dentists, 7.8
pharmacists and 12.8 staff nurses per 10,000 persons. Medical
services in Jordan are pursued by patients from various countries of the region.
The combination of highly qualified Jordanian medical personnel, up-to-date
facilities and relatively low costs makes Jordan highly competitive in the
provision of health care services. The medical
relationship between Jordan and Iraq was cemented during the last two decades
through (i) referring a large number of patients for advanced and specialized
medical treatment that was lacking in Iraqi hospitals, (ii) providing continuous
training for Iraqi physicians and medical personnel on new medical technologies
and advances, and (iii) providing medical insurance to UN and other
international staff working in Iraq to receive medical treatment in Jordanian
hospitals. In the
short-term, Jordan’s private sector can sustain the provision of the
latter-mentioned services. In the
long-term, this sector can take a pivotal role in the design, construction and
administration of Iraq’s existing and newly constructed medical facilities.
II.4.3
Sea/Land Transport Prior
to the outbreak of war, Iraq was Jordan’s largest trading partner, and
Jordan’s Port of Aqaba was the main conduit of transit trade into Iraq.
Subsequently, the transport sector in Jordan was primarily geared to
cater to, and facilitate this trading activity. Large
investments were made to expand the Port’s facilities and the road network to
serve Iraq during the first Gulf War. The
port has excellent facilities and is capable of handling up to 30 million tons
per year. The road network from
Aqaba to the Iraqi borders is also considered excellent, safe and secure.
Furthermore, there is an adequate number of trucks that are in good
condition, and capable of moving cargo from Aqaba into Iraq. No
country in the region, other than Jordan, is equipped to facilitate the swift
movement of goods into Iraq. Due to
the geographic proximity and the extensive historical trade relations between
the two countries, the Jordanian private sector stands in a unique position to
facilitate the trade of goods into Iraq.
II.7
– Education Sector
Jordan has a well-established National Curriculum, which is
applied both in State-run and private schools. This curriculum can form a
starting point for the development of a National Curriculum for Iraq.
Furthermore, Jordan can offer its experience in preparing primary and
secondary school students for entry to tertiary educational institutions of
world class standard. Jordan has a wealth of human resources with a high standard
of education and a wealth of experience, many of whom would be willing and are
in a special position to assist international advisers new to the Middle East.
Private education has developed and prospered in Jordan
because it was able to deliver the standards required by international schools
systems, thereby enabling students to gain admission to schools and universities
worldwide. Private schools have
developed their own curriculum, catering to a wide spectrum of individual
educational needs, by combining Jordan’s National Curriculum with other
international curricula resulting in a high standard of education.
Some private schools have bilingual professional teams (consisting of
teachers, administrators, trainers and consultants), while others have developed
their own classroom literature both in English and Arabic. Creative Associated in the United States has been contracted
by USAID to reconstruct the Iraqi educational system with an initial US$1
million and then with a further US$62.6 million over the next 12 months. The
Private Education Sector in Jordan is suitably qualified to be a major
sub-contractor for the second phase (the subsequent 12-month period) because it
can provide the following resources:
Contractors Classification Construction Construction Industries Engineering Consulting & Industries Information & Communication Technology Shipping Companies Medical Services & Supplies Plastic & Rubber Industries Paper Industry Supply & Food Stuff Industries Packing & Packaging Furniture Industry Chemicals Services Education Additional Companies
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