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Investment and Business Opportunities in China

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					Investment Climate and Business
    Opportunities in Jordan


                Maen Nsour
           Chief Executive Officer
          Jordan Investment Board

                 July, 2007
    What Does Jordan Offer for Investors?
• Political stability and security.
• Competitive investment laws.
• Macroeconomic stability.
• Superb Infrastructure.
• Outstanding workforce with adequate cost.
• The stability of laws and systems.
• Size and potential for expansion of the market.
• Ease of Government procedures.
• Freedom to exchange of invested money and the
  interest.
• Wide range of rewarding investment opportunities.
 Investment Volume of Projects that
 Benefited from the Investment Law
                                       Million USD
3000
                                        2.590
2500

2000

1500
                               1.058
1000
                        590
        424     370
500

  0
       2002   2003    2004    2005     2006
Investment Volume (Million US$) of Projects that
      Benefited from the Investment Law
      January - June 2004, 2005, 2006, 2007

3000

2500                                2568

2000

1500

1000
        243      307   538
500

  0
       2004     2005         2006          2007
   FDI Performance Indicators (UNCTAD)
               Under Performers           Below Potential       Above Potential       Front Runners
                                                                                      Oman Bahrain
                   Jordan                 Saudi Arabia,
                                                                     Syria              Ireland
               Morocco, Sudan,          UAE, Kuwait, Libya,
1988-1990                                                           Tunisia            Singapore
            Lebanon, Yemen, India,            Japan
                   Turkey                                            Egypt           USA, China, UK,
                                           Italy, Israel
                                                                                        Canada
                                             Jordan
                                                                   Morocco               Bahrain
                                       Saudi Arabia, Oman,
            Syria, Lebanon, Algeria,                                Tunisia          Qatar Singapore
1993-1995                              UAE, Kuwait, Libya
             Sudan, Turkey, India                                Egypt, Yemen,           Ireland
                                              Japan
                                                                    Canada             China, UK
                                           Italy, USA
                                          Oman, Lebanon                                  Jordan
                                            Japan ,Italy            Morocco            Singapore
            Syria, Algeria, Turkey,
2000-2002                               Saudi Arabia, Qatar      Tunisia, Sudan,        Ireland
                     India
                                            UAE ,Egypt              Canada          China, UK, France
                                           Bahrain, USA


                                                                                      Jordan, Bahrain,
                                       Oman, Algeria, Libya,                            Qatar, UAE,
                                       Kuwait, Tunisia, Saudi                       Lebanon, Singapore
2002-2004    Egypt, Syria, Yemen,       Arabia, Turkey, UK,     Morocco, Sudan,
            India, Indonesia, South      Japan ,Italy, USA,     Romania, Nigeria,         Ireland
                     Africa                   Canada                Angola             China, Spain,
                                                                                         Malaysia,
 Top 20 rankings by Inward FDI Performance Index,
1995, 2004 and 2005 “World Investment Report, 2006.”
     Macroeconomic Stability
GDP
                                   7.5%   7.5%
8%

7%
                                                  6.1%
6%
                     4.9%
5%    4.1%   4.2%

4%                          3.5%


3%

2%

1%

0%
     2000    2001   2002    2003   2004   2005   2006
              Positive results
Dynamic Growth…

• … resulting in higher real GDP per
  capita…                     $2,542

             $1,734
                         Average
                      Annual Growth
                        Rate: 7%




              1999
             1999                     2006
              Macroeconomic Stability
Jordan’s GDP originates primarily from the services sector (67.6% of the total GDP), while the second most important
sector, manufacturing, contributes 19.2% to GDP.




                                   Origin of GDP 2005 (% total)                             Remaining industries after
                                                                                            services and manufacturing
                                                                Manufacturing,              account for approximately
                                                                                            13.2% of GDP
                                                                   19.2%

                                                                      Construction,
                                                                         4.5%
                                                                       Mining, 3.3%
                                                                      Agriculture, 2.8%
                          Services, 67.6%
                                                                     Electricity, gas
                                                                     and water, 2.6%


    Services     Manufacturing       Construction      Mining     Agriculture    Electricity, gas and water
          Macroeconomic Stability
                                                    Million USD
                                                     4180
4500
              Exports                        3608
4000                                  3300
                               3000
3500

3000
                       2195
2500           1907

2000   1524

1500

1000

 500
   0
       2000   2001    2002    2003    2004   2005   2006
                                     Macroeconomic Stability
                                            (Exports)
Exports have grown annually since 2002 and with continuing investment and investor interest in the QIZs and
other export-directed promotions, this trend is likely to continue.

                                                                                  Exports in Detail 2002-2006


                                                         Other Goods Not
   Exports of goods FOB (USD m)                        Classified Elsewhere


7000.0
6000.0                                                       Capital Goods

5000.0
4000.0
                                                        Crude Materials and
3000.0                                                  Intermediate Goods

2000.0
1000.0
                                                          Consumer Goods
   0.0
        02

                03

                        04

                                05

                                         06


                                          e

                                                   e
                                        07

                                                 08
     20

             20

                     20

                             20

                                      20

                                     20

                                              20




                                                       Domestic Exports



                                                                              0   500     1,000     1,500       2,000   2,500   3,000    3,500
                                                                                                                                  Thousands

                                                                                   2006   2005    2004   2003    2002
       Macroeconomic Stability

       189%
200%
180%
                     External Debt as a % Percentage of GDP
160%
140%
               105%
120%
                         84%    77%
100%
                                       67%
                                             58.6%
80%
                                                     51.90%
60%
40%
20%
 0%
       1990   1995      2000   2003   2004   2005    2006
                          The Way Forward
      Macroeconomic Targets of the National Agenda (November 2005)

                                           Creating 600,000 new job
                                               opportunities
      Target      2000-                                                        Target
                                                                                             2003
       2017       2005                                                      2017     2021
       %7.2       5.9%                                                      %6.8 %9.3       %12.3
                               Real GDP
                                                        Unemployment
                                Growth
     2004
Deficit Debt
11.8%
        91% of
  of
         GDP
GDP
                 Public Debt           Macroeconomic                                        2003
  Target 2017                             Targets
                                                                                             -2.4
Surplus Debt
 1.8%                                                                                       billion
       36% of
  of                                                                    Balance of
        GDP
GDP
                                                                          Trade
                                                                                            Target
                                Capital                                                      2017
      Target
                  2004         Formation
       2017                                                                                  -0.9
      24% of     21% of                                                                     billion
       GDP        GDP            To increase GDP per capita from $2,130 in 2004 to
                                                $4,260 in 2017
    People are our greatest asset
• Well educated population.
• Over 91% literacy rate.
• 192,000 students currently enrolled in universities.
• 17% of the population receives higher education.
• 24 universities (14 private, 10 public).
• 60 community colleges.
• 35 vocational training centers training over 10,000
  people each year.
• Competitive wage structure.
          International Gateway

• Member of WTO.
• Jordan-US Free Trade Agreement (FTA).
• Qualifying Industrial Zone (QIZ) Agreement.
• Greater Arab Free Trade Agreement.
• Euro-Jordanian Association Agreement.
• Aghadir Agreement.
• Jordan-EFTA FTA.
• Jordan-Singapore FTA.
Access to more than one Billion Consumers…
Custom Free and Quota Free
        Enabling Platforms
• Aqaba Special Economic Zone
• King Hussein bin Talal Economic Zone
• Irbid Economic Development Zone
  Aqaba Special Economic Zone
• The Aqaba Special                       Light         Heavy
                                        Industry       Industry
  Economic Zone is a                       7%            13%
  world class Red Sea        Services
  business hub and leisure    30%
  destination enhancing
  the quality of life and
  prosperity of the
  community through                                Tourism
  sustainable development                           50%
  and a driving force for
  the economic growth.
     AQABA Special Economic Zone
• Strategic location, crossing point of 4 countries and 3
  continents.
• Favorable tax regime and an attractive package of
  incentives:
    0% customs duties.
    5 % income tax rate.
    0% tax on most products and services.
    7 % sales tax rate.
    0% building and land tax.
    0% social services tax.
AQABA Special Economic Zone
The Achievements Exceeded The Master Plan Target By 133%

                        $8 Billion
     8                                              $6 Billion
     7
     6
     5
     4
     3
     2
     1
     0
     2001        2005        2010       2015        2020
KING HUSSEIN BIN TALAL ECONOMIC ZONE (Mafraq)

 “Core market” of 330 million inhabitants
                                                           1
                 Turkey
                  73M

                      Syria
                      19M
                              Iraq
                              29M                  Iran
                                                   70M
                 Jordan
                  5.7M                 Kuwait 3M
         Egypt
          74M                 Saudi Arabia    Qatar 0.8M
                                 25M
                                                   U.A.E
                                                    4M




                                      Yemen
                                       21M
                 Industry Tragets
            - Target Industries with high development potential -
1


                              Food Processing

2


                        Textiles, Apparel, Furniture
                       4,380

3

    1,251
                              Light Chemicals

                        680
4

    2005               2025
                         Engineering & Electrical
Irbid Economic Development Zone
       Healthcare, IT, Education and Research clusters
   Enabling Platforms - Privatization
• To date, 66 transactions have been completed including
  the government’s shares in 55 companies under the
  Jordan Investment Corporation Portfolio.


• Privatization proceeds amounted to over $1.3 billion in
  investments particularly in the telecom, water, transport,
  and other privatized sectors.
             Completed Transactions
•   Jordan Cement Factories………………………………..France
•   Public Transport Corporation
•   Jordan Telecommunications Company (JTC)………..France
•   Water Authority of Jordan (WAJ)
•   Airports Duty-Free Shops……………………………….Spain
•   Aircraft Catering Center
•   Royal Jordanian Air Academy
•   Assamra Water Treatment Plant/ BOT
•   Arab Potash Company/APC………………………..…. CANADA
•   Container Terminal - CT
•   Jordan National Shipping Company
•   Jordan Express Tourism Transport / JETT
•   Jordan Aircraft Maintenance Company/JORAMCo
•   Jordan Company for Wood Processing and Production
•   Jordan Investment Corporation / JIC Portfolio
•   Agricultural Marketing and Processing Company (AMPCO)
•   Jordan Phosphate Mines Co. (JPMC)…………………………..Brunei
               Ongoing Transactions
• Alia/Royal Jordanian Airlines Company:                   The Jordanian
  government decided to proceed with the second phase of privatization of Royal
  Jordanian Airlines. Currently 74% of total shares are slated for privatization.
  The transaction is expected to be finalized in 2007.

• Aqaba Railway Project:          Transport phosphate and other goods from
  Jordan Phosphate Mines Company (JPMC) to Aqaba port for export. Phase 1
  focusing on restructuring Aqaba Railway Corporation (ARC) and phase 2 shall
  focus on the bidding process for total or partial sale to private investors or other
  designated parties.
• Electricity Distribution Companies:
    Electricity Distribution Company/EDCO: Total Sale.
    Irbid District Electricity Company /IDECO: Sale of Government’s
     ownership amounting to 55.4% total shares.
Canadian Investments that benefited from the Jordan
Investment Laws since 1996 (USD 33 million)



                             Entertainment
           Hospitals               3%
             25%




                                             Industry
                                               72%
      Canadian Investments in Jordan
• Investments in non-benefiting sectors (services,
  real estate and commercial) USD 31 million.
• Amman Financial Market USD 61 million.
• PCS’ investment in the Potash Company USD
  31 million.

• TOTAL CANDIAN INVESTMENTS IN
  JORDAN: USD 156 million.
  Agreement for the Promotion and Protection of
    Investments between Canada and Jordan

• Desiring to expand and deepen economic and
  industrial cooperation between Canada and
  Jordan, and in particular, to create favorable
  conditions for mutual investments and
  recognizing the need to protect investments by
  citizens from both countries and to stimulate the
  flow of investments and individuals, Jordan
  entered into negotiations on a bilateral
  agreement for the promotion and protection of
  investments with Canada.
              Key Sectors …. Energy
• Jordan’s energy sector will go under major modernization in
  the coming years. Jordan’s Energy Master Plan anticipates the
  injection of about $3 billion of public and private sector capital
  into the sector.
• One important resource that Jordan has is the oil shale; Jordan
  has 40,000 million tons of oil shale, which makes it the third
  largest reserves in the world.
• The Gas Pipeline and Gas Distribution Networks are major
  ongoing energy projects.
• A comprehensive plan for renewable energy is prepared.
  Currently three sources are being used, Wind, Solar and
  Biogas energies.
• Jordan intends to build its first nuclear power plant by 2015
  and the Jordanian universities would begin teaching this field
  to prepare the country to operate nuclear facilities. (Jordan is a
  signatory of the nuclear non-proliferation treaty)
            Key Sector …… Water
• The Jordan Government has adopted a comprehensive
  water strategy supplemented with a set of policies and
  measures to help mitigate the water situation.
• The Disi conveyor system (US$500-600 million) is
  considered to be one of the answers to the vexing
  question of water supply in Jordan. As it is
  envisioned, the project will supply about 100 MCM
  per year to Amman.
• Red – Dead Canal, designed to transfer water from the
  Red Sea to the Dead Sea, produce fresh water (850
  mcm/yr) and Hydropower and excess electricity
  distribution.
   Key Sector ………. Transport
• The government of Jordan is currently strengthening
  its transport sector by improving networks and
  facilities of all transport modes.


• The planned relocation and development of Aqaba
  Port ($830 million), vital to Jordan’s export-led
  development strategy, includes the construction of
  new jetties for passengers, industrial usage and
  special cargo handing.
  Key Sectors …. Pharmaceuticals
• Jordanian pharmaceutical companies have joint
  ventures and subsidiaries companies in more than 15
  countries. Largest Arab exporter. 75% of the
  production is exported to over 65 countries. 2010
  target $1 billion.
• 6 Jordanian Companies accredited by different
  European regulatory bodies are willing to produce
  originator products under their own brands.
• 10 companies are capable of providing Common
  Technical Document (CTD) files to European
  Markets. EU accredited companies accredited are
  willing to sign supply agreements through contract
  manufacturing.
              Key Sectors….. ICT
• Fastest growing sector in Jordan's economy (50% growth rate). A
  contribution of 10% to GDP (6%telecom, 4%IT).


• Jordan's experience in outsourcing, ICT competencies, lower costs
  and skilled workforce offers a unique investment opportunity.
  Especially in the areas of Information Technology Outsourcing
  (ITO); Business Process Outsourcing (BPO); Arabization; banking
  and financial solutions; system integration; healthcare and
  insurance solutions and localization services.
• The liberalization of the telecom market (mobile and fixed line)
  makes Jordan a unique environment for telecom investment and has
  already attracted substantial foreign investment.
 Key Sectors….. Banking and Finance
• Well developed banking system.
• Comprehensive Legal Infrastructure (Central Bank of
  Jordan Law, Banking Law and Anti-Money
  Laundering and Combating Financing of Terrorism
  Law).
• Compliance with international standards (Basel Core
  Principles for Effective Banking Supervision).
• Modern well established stock market infrastructure
  (no taxes on capital gains, no taxes on cash dividends,
  free repatriation of investment and income, no ceiling
  on foreign equity ownership and privatization).
• Shares owned by non-Jordanians represented 46.4% of
  ASE capitalization, 35.4% of which are owned by Arab
  investors and 11.0% by non-Arabs.

				
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