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Slide 1 - unido.gr

VIEWS: 25 PAGES: 63

									Investment Climate and Business
    Opportunities in Jordan

              Lina Sawaqed
       Investment Promotion Officer
         Jordan Investment Board

        Information Day on Jordan
             25 January 2008
              Greek - Jordanian Trade Relations


US$ million   2001   2002    2003    2004    2005    2006


Imports 35.9         36.22   10.21   10.00   41.67   14.48

Exports       3.02   1.89    1.30    1.67    1.70    2.93


Balance
         -32.88 -34.33 -8.91         -8.33   -39.97 -11.55
of Trade

                                                             2
               Main Imports from Greece 2006


Paper & Wood       Other
  Products          13%                   Metal Products
     9%                                        31%




Machinery
  10%

        Foods &
                               Chemical
       Beverages
                               Products
          11%
                                 26%



                                                      3
               Main Exports to Greece 2006

                      Paper & Wood
              Plastic   Products Other
 Chemical
             Products      2%
  Products                         4%
                2%
     8%
Vegetable
 Products
    8%




                                         Metal Products
                                              76%




                                                          4
         Greek Investments in Jordan



Volume of Greek investments that benefited
 from the Jordan Investment Law is 1.5
 Million USD

Mining, Information Technology




                                             5
        Agreements between Jordan and
        Greece


The Promotion and Reciprocal Protection of
 Investment Agreement between Jordan and
  Greece was signed on 21 December 2005

Jordan signed an Association Agreement with
          the European Union in 2002



                                              6
                Greek Involvement in Jordan
The Greek Government   gave 1 million USD to finance the feasibility study on the
                       Red-Dead project
The Greek Government   will give 0.5 million USD for the renovation of the
                       Church of Saint George in Madaba
J&P Avax               is part of the international consortium that was awarded
                       the Queen Alia International Airport Project
Christopher D.         are participating in the Jordan Petroleum Refinery
Constantinidis and     upgrading project
ATERMON
Consolidated           is part of a consortium that bought a majority stake in
Contractors Company    Jordan’s Central Electricity Generating Company
(CCC)                  (CEGCO).
Intracom               an IT solutions provider, established a subsidiary in Jordan
                       in 2000

                                                                                 7
The Investment Environment
         in Jordan



                             8
       Rigorous Reform




The reform process has materialized into
            tangible results…




                                           9
            Macroeconomic Stability
                                   7.5%   7.5%
8%

7%    GDP Growth Rate                             6.4%
                                                           5.8%
6%
                     4.9%
5%   4.1%    4.2%

4%                          3.5%

3%

2%

1%

0%
     2000    2001   2002    2003   2004   2005   2006    Jan-Oct
                                                          2007

                                                                  10
          Macroeconomic Stability
 USD
              GDP per Capita
3000
                                                   2546
2500
                                     2125

2000   1679     1703   1744   1760
                                            1647

1500


1000


 500


   0
       2000    2001    2002   2003   2004   2005   2006

                                                          11
              Macroeconomic Stability

       189%
200%                             External Debt
180%                             as a percentage of GDP
160%
140%
                105%
120%
                        84%   77%
100%                                 67%
                                            58.6%
80%
                                                    51.90%   46.30%
60%
40%
20%
 0%
       1990    1995    2000   2003   2004   2005    2006     Jan-Oct
                                                              2007

                                                                      12
             Macroeconomic Stability

30%
      26%

25%
                      Inflation Rate
20%

15%
              8%
10%                                      5.0%   6.1%
                                   3%                  5.4%
                     2%     2%
5%

0%
      1990   1995   2000   2003   2004   2005   2006   Jan-
                                                        Oct
                                                       2007

                                                              13
               Macroeconomic Stability
                                                            Million USD

       Foreign Reserves                                         6904
7000                                                 6103

6000
                                4700   4800   4800

5000
                         3500
4000
        2800     2600
3000

2000

1000

   0
       2000     2001    2002    2003   2004   2005   2006    Jan-Oct
                                                              2007

                                                                          14
              Macroeconomic Stability
                                                        Million USD
                                                     4180
4500
4000
              Exports                         3608
                                       3300
                                3000                          3326
3500
3000
                         2195
2500             1907

2000   1524

1500
1000
 500
   0
       2000     2001    2002    2003   2004   2005   2006   Jan-Oct
                                                             2007

                                                                     15
International Reports



                        16
  Top 20 rankings by Inward FDI Performance Index
  2005 and 2006
  (UNCTAD World Investment Report, 2007)

       Economy       2005       2006
Luxembourg             5          1
Hong Kong, China       4          2
Suriname               3          3
Iceland               12          4
Singapore              6          5
Malta                 10          6
Bulgaria               8          7
Jordan                19          8
Estonia                7          9
Belgium               11         10
Bahrain               23         11
Azerbaijan             1         12
Gambia                14         13
Lebanon                9         14
Georgia               16         15
Tajikistan            33         16
Panama                25         17
Bahamas               21         18
Sudan                 13         19
Guyana                32         20


                                             17
                            FDI Performance Indicators (UNCTAD)

                 Under Performers              Below Potential           Above Potential          Front Runners

                     Jordan                  Saudi Arabia, UAE,                                   Oman, Bahrain,
1988-1990   Morocco, Sudan, Lebanon,        Kuwait, Libya, Japan,      Syria, Tunisia, Egypt   Ireland, USA, China,
             Yemen, India, Turkey           Germany, Italy, Israel                                      UK

                                                   Jordan
                                            Saudi Arabia, Oman,                                   Bahrain, Qatar,
              Syria, Lebanon, Algeria,                                  Morocco, Tunisia,
1993-1995                                    UAE, Kuwait, Libya,                                Singapore, Ireland,
               Sudan, Turkey, India                                      Egypt, Yemen
                                            Germany, Japan, Italy,                                  China, UK
                                                    USA
                                                                                                     Jordan
                                            Oman, Lebanon, Japan,           Morocco
2000-2002   Syria, Algeria, Turkey, India    Italy, Saudi Arabia,                               Singapore, Ireland,
                                             Qatar, UAE, Egypt            Tunisia, Sudan       Germany, China, UK,
                                                                                                     France

                                            Oman, Algeria, Libya,                                     Jordan
2002-2004                                   Kuwait, Tunisia, Saudi      Morocco, Sudan,        Bahrain, Qatar, UAE,
            Egypt, Syria, Yemen, India,
                                             Arabia, Turkey, UK,        Romania, Nigeria,       Lebanon, Singapore,
              Indonesia, South Africa
                                            Japan, Germany, Italy,          Angola             Ireland, China, Spain,
                                                     USA                                             Malaysia

                                                                        Egypt, Romania,          Jordan, Belgium,
            Bangladesh, Pakistan, Syria,    Algeria, Brazil, Russia,
2005-2006                                                              Zambia, Colombia,        Malta, China, UAE,
                   Yemen, Peru                 Tunisia, Turkey
                                                                       Morocco, Lebanon          Singapore, China


                                                                                                           18
           The Globalization Index 2007

• Issued by FOREIGN POLICY magazine in
  partnership with A.T. Kearney

• Measures countries on their economic, personal,
  technological, and political integration.

• The 2007 Index draws on data from 2005.

• 72 Countries took part in the Index 2007.

                                                    19
20
       Countries of the Globalization Index,
       ranked by foreign direct investment as a share of GDP
       (sum of FDI inflows and outflows divided by GDP)
Rank           Country                          FDI 2005
1              Hong Kong, China                 38.51%
2              Netherlands                      25.89%
3              Estonia                          25.13%
4              Denmark                          24.08%
5              Singapore                        21.94%
6              Ireland                          17.79%
7              Panama                           14.06%
8              Switzerland                      13.27%
9              Belgium                          12.51%
10             Jordan                           12.05%
11             Colombia                         12.04%
12             United Kingdom                   11.91%
13             Sweden                           10.97%
14             Australia                        10.60%
15             Czech Republic                   9.56%
16             Bulgaria                         9.50%
17             Ukraine                          9.39%
18             France                           8.43%
19             Chile                            7.41%
20             Hungary                          7.21%

                                                               21
       Doing Business 2008
       (World Bank Group)
                       Overall Ranking
 Arab Countries                    Ranking out of 17
    Saudi Arabia                           1
      Kuwait                               2
       Oman                                3
United Arab Emirates                       4
      Jordan                               5
     Lebanon                               6
      Tunisia                              7
      Yemen                                9
     Palestine                            12
      Algeria                             17

                                                       22
           Global Competitiveness Report
           2007-2008 (World Economic Forum)

• Prevention of Organized Crime:
  Jordan ranks (9) out of (131) countries.

• Business costs of crime and violence
  Jordan ranks (13) out of (131) countries.

• Reliability of Police Services:
  Jordan ranks (14) out of (131) countries.
                                              23
          Investment Promotion Law
          incentives
• Income tax exemptions
 • Tax Breaks for 10 years, the percentage of
  which depends on the project’s location.
 • Development areas are exempted for 20
  years.
• Customs and sale tax exemptions on all
fixed assets
 •Capital and production goods are exempted
  from customs duties and sales tax.
                                                24
              Investment Volume of Projects that Benefited
              from the Investment Law 2002 - 2007

                                                     Million USD
3500
                                                   3,080
3000
                                           2,586
2500

2000

1500
                                   1,058
1000                        590
        424         370
500

  0
       2002       2003    2004    2005     2006    2007


                                                           25
             Human Resources
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.
                                                         26
             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 One Billion Consumers…
    Customs Free and Quota Free
                                                  27
            Enabling Platforms


• Aqaba Special Economic Zone


• Development Zones
  • King Hussein bin Talal Economic Zone
  • Irbid Economic Development Zone
  • Ma’an Economic Development Zone




                                           28
AQABA Special Economic Zone

                         Light         Heavy
                       Industry       Industry
                          7%            13%
            Services
             30%




                                  Tourism
                                   50%




                                      29
           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.


                                                            30
            AQABA Special Economic Zone

The Achievements Exceeded The Master Plan Target By 133%


                                                       $6 Billion
    8                   $8 Billion
    7
    6
    5
    4
    3
    2
    1
    0
    2001       2005       2010       2015       2020

                                                           31
King Hussein Bin Talal
Economic Zone (Mafraq)




                         32
           King Hussein Bin Talal
           Economic Zone (Mafraq)
            Industrial and Logistics Opportunity
  1   Proximity to Untapped Markets                          2   Competitive Land and Labor Costs

                                3      Strategic Location
                   Turkey
                    73M                                                   Average Annual Wage
                                                                      of Low Skilled Worker 2005(*)
                       Syria
                       19M
                                Iraq                                    Israel                      $12,165
                                29M                 Iran
                                                    70M
                   Jordan
                    5.7M                                               Turkey              $5,837
                                        Kuwait 3M
          Egypt
           74M                 Saudi Arabia     Qatar 0.8M             Jordan      $2,961
                                  25M
                                                    U.A.E
                                                     4M                Egypt      $2,759
“Core market” of
  330 million
                                                                        Syria     $2,315
  inhabitants
                                        Yemen
                                         21M




                                                                                                    33
               King Hussein Bin Talal
               Economic Zone (Mafraq)
    Target Industries
                                                            Jordan Projected Exports
1                                                                  (2005 – 2025)
         Food Processing             15,000 new                  (In US$ Million)
                                   jobs created in
                                      10 years!

                                                                          5,060
2
    Textiles, Apparel, Furniture


                                                        CAGR: 7%
                                                                          4,380
3
         Light Chemicals
                                                     1,251


4                                                                          680
     Engineering & Electrical
                                                     2005                 2025


                                                                                       34
Irbid Development Area




                         35
Irbid Economic Development Zone

Healthcare, IT, Education and Research clusters




                                                  36
Ma’an Economic Development Zone




                              37
         Ma’an Economic Development Zone

• Was launched in September 2007 by HM
  King Abdullah II.

• 280 million USD is expected to be spent on
  infrastructure.

• Qatar-based Al Rimal Glass Company will
  establish a glass factory in Ma’an over
  300,000 square meters with a total daily
  capacity of 700 tons.
                                               38
               Exemptions offered in Development
               Zones
• Income tax:
       • Flat rate of 5% income tax on all economic activities.
       • No income tax on profits from exports
• Sales tax:
       • No sales tax on procurement for projects.
       • 7% tax rate on sales of services to the local market.
       • 16% tax rate on sale of goods to the local market.
• Customs:
       • No Customs duties on production inputs.
       • Customs duties are due on sale to local market.
  It is possible to establish Free Zones within the
  Development Zones.
                                                                  39
Major Development Projects




                             40
Red Sea – Dead Sea Canal




                           41
42
                      Red Sea – Dead Sea
                      Water Transfer - Phases
• Phase 1: Water transfer from Red Sea to
  Dead Sea
     • At a cost of US$1 billion.                       • The World Bank has
     • Distance : 180 km.                                 been commissioned to
     • Annual water transfer: 1,900 mcm/yr.               prepare principles for
                                                          the Terms of
                                                          Reference (TOR) for
• Phase 2: Hydropower and freshwater                      the project Feasibility
  production                                              Study.
     •   At a cost of US$1-1.5 billion.
     •   Hydroelectric generation capacity.             • The feasibility study
     •   Reverse osmosis desalination facility.           and the environmental
     •   Freshwater production capacity – 850 mcm/yr.     impact study will start
                                                          in March 2008 and
                                                          will be completed in
• Phase 3: Freshwater and excess electricity              March 2010.
  distribution
     • Cost to be determined.                           • Implementation is due
     • Freshwater distribution system to demand           to start in 2011.
       centers.
     • Transmission system for sale of energy.

                                                                           43
                 Aqaba Port Relocation & Development

• Estimated Cost: $3 billion.
• Objective: Provide an effective and efficient port services.
• Description:
   • Relocation of the main port area, including the phosphate
      terminal to the southern industrial zone of Aqaba.
   • Development of the cleared-up main port area for
      commercial use.
   • Construction of a multi-purpose general cargo terminal in
      the southern industrial zone.
• Aqaba Development Corporation (ADC) is currently in the
  process of selecting one of the five companies that are running
  for the project.
• Expected completion by 2022.
                                                                    44
             Upgrading & Expansion of Jordan
             Petroleum Refinery
• Estimated Cost: $700 million.
• Objective: Expand the existing refinery to meet the
  projected demand for light and intermediate cleaner
  oil products. Long-term concession ends February
  2008.
• Description:
       • Increasing crude distillation capacity to increase
         production.
       • New reformer and Isomerization units for
         production of unleaded gasoline.
       • Increasing storage capacity.
       • Adding a sulphur plant, a hydrogen plant and
         solvent deasphalter units.
• Timeframe: 2006-2008.

                                                              45
             Four New Electricity Plants

• To generate 1500MW to meet the growing local
  and regional demand.
• Average annual local demand growth on
  electricity is 4.6% annually.
• All the technical and financial studies related to
  this project are ready.
• Citigroup has been hired as a financial advisor
  to help the refinery in selecting the strategic
  investor.
• The project will be awarded as BOO, with a
  total cost of US$ 1.1 billion.


                                                       46
              Aqaba Railway Project

• Description: Aqaba Railway Corporation (ARC), a public
  corporation presently operates railway services for the
  transport of phosphate rock from the various mines to Aqaba
  port for export purposes.
• Objective: transport phosphate and other goods from Jordan
  Phosphate Mines Company (JPMC) to Aqaba port for export.
• Privatization Steps:
   • Preparing a new law for the abolition of ARC.
   • Evaluating all ARC assets and liabilities.
   • Preparing a Draft transport agreement between JPMC and the new
     company.
   • Finalizing necessary documentation required for the establishment and
     registration of the new company.

                                                                      47
              Expansion of Queen Alia Airport

• Estimated Cost: $450 million.
• Objective: Expand and rehabilitate the existing
  terminals (currently 60,000 sq. meters).
• Description: Improve airport operation, service
  quality and reliability, expand capacity and
  upgrade infrastructure to meet best international
  practices. (Additional 90,000 sq. meters to cater
  for 6 million passengers).
• Project awarded to Aéroports de Paris
  Consortium in April 2007.
• Estimated time of completion: by 2010.

                                                      48
                Light Railway from Zarqa to Amman

• Estimated Cost: $180 million.
• Objective: Establish an effective passenger transport between
  Amman and Zarqa (daily commuters 90,000 passengers) with
  promptness, frequency of trips, reliability and safety.
• Description:
   • (i) Electrically operated 1435 mm wide rail
     in two directions, total distance 29 km.
   • (ii) BOT scheme for a 30 years period,
     1st stage to include 36 carriages.
   • (iii) Speed 90 km/hour.
• Project awarded to a Pakistani-Chinese Consortium in May 2007.
• Estimated time of completion: by 2009.
                                                             49
             Disi Water Conveyance Project

• Estimated Cost: US$900
  million.
• Objective: provide
  additional water supply
  from Disi aquifer to
  greater Amman area.
• Project awarded to an
  international coalition, led
  by GAMA of Turkey.
• Estimated time of
  completion: by 2012.


                                             50
Engines of Growth & Cooperation




                                  51
            Electronics and Household Appliances

• Exports grew by more than 200% between 1998 and 2005,
  reaching $600 million in 2005, with Iraq and Syria being
  the largest markets.

• Home appliances, insulated wire and general purpose
  machinery are the main products.

• Jordan adopted the International Electro- technical
  Commission (IEC) standards in August 2005.




                                                         52
             Automotive Industry

• 2 operating companies engaged in the assembly of transport
  vehicles and four-wheel drive cars (mainly for military use).

• 8 companies operate in the production of automotive parts,
  radiators, batteries, glass and filters.

• 75% of the production is exported.




                                                             53
            Garments & Textiles

• Employs over 50,000 people and generates about $1.3 billion
  worth of exports.
• Achieved a net growth of over 200% in export levels, and
  over 20 % in employment levels in the past several years.
• Major international buyers sourcing from Jordan include: JC
  Penney, Levi’s, Liz Claiborne, Gap, Gloria Vanderbilt,
  Victoria’s Secret, Jones Apparel, Perry Ellis, PVH, Sara Lee,
  Banana Republic, Wal-Mart, Target.
• Products have duty-free access to major markets.




                                                              54
             Pharmaceuticals
• Investment volume of $700 million.
• Exports in 2006 $300 million, 2010 target $1 billion.
• Largest Arab exporter.
• 17 major investments employing 8,000 high caliber
  employees.
• Compliant with intellectual property rights protection.
• Available supporting infrastructure: 8 pharmaceutical
  colleges, 4 clinical research organizations, and 97
  hospitals.
• Increased investment in R&D (Clinical Trial Law).



                                                            55
            Tourism

• In 2006:
   • Over 3.0 million overnight tourists.
   • $ 1.5 billion revenues.
• A rich mix of history, archaeology, nature,
  religious and adventure and health tourism.
• 27,000 historical sites, of which 4 are globally
  renowned: Wadi Rum, Dead Sea, Petra,
  Baptism Site.
• Potential for expansion in health and
  conference tourism.



                                                     56
           Biblical Sites

• Bethany Beyond the Jordan: where Jesus Christ
  was baptized
• Mount Nebo: where Moses viewed the Holy
  Land without entering it
• Umm Qais (Gadara): where Jesus performed the
  miracle of the Gadarene Swine
• Mukawer: where John the Baptist was
  decapitated
• Madaba: Byzantine mosaics, including the 6th
  century AD mosaic map of Jerusalem and the
  Holy Land in the Orthodox Church of Saint
  George

                                                  57
            Health Care

• According to the Arab World Competitiveness Report
  2005, Jordan is the top ranking Arab country in terms of
  health care.
• 97 hospitals and 22.4 physicians per 1000 population.
• More than 100,000 medical tourists annually.
• Annual revenues of $860 million.
• Medical Tourism Center for the region.
• Unique spas and health resorts: Dead Sea and natural hot
  springs in Ma’in, Himme and Zara.



                                                             58
             Information and Communication
             Technology
• 220 private companies employing 16,000 high caliber
  employees.
• Rapidly growing sector in FDI, more than $1.5 billion since
  2000.
• Exports of IT Products exceeded $100 million in 2005.
• In the 2003-2004 Global Competitiveness Report, Jordan
  ranked 11th out of 102 countries in terms of government
  commitment to ICT.
• Huge potential for investment in:
   • Call Centres.
   • Education platforms/E-Learning.
   • Arabization/Arabic language content.
   • Animation.



                                                                59
        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.
                                                           60
           Minerals

• The mineral industries contribute about 3% of Jordan’s GDP.
• The main mineral production industries in Jordan are
  phosphates, potash, fertilizers, cement, and petroleum
  products.
• Jordan is the world's sixth largest potash producer, with 96%
  of sales being for export markets.
• Jordan phosphate reserves, estimated at 4% of total world
  reserves, are predicted to last about 300 years at current
  extraction levels.
• Only about a fifth of cement production in Jordan is exported,
  in large part due to the booming construction market in
  Jordan.
                                                               61
            What Does Jordan offer investors?

•   Political stability and security.
•   Appropriateness of investment law.
•   Fiscal policy and economic stability.
•   Freedom to repatriate invested money, salaries and
    profits.
•   Infrastructure.
•   The availability and costs of an adequate workforce.
•   The stability of laws and systems.
•   Size and potential for expansion of the market.
•   Ease of Government procedures.
                                                           62
                          ευχαριστώ
       Thank you for taking the time to view the presentation.
Please do not hesitate to contact us for any further information or any
                              clarification.




                 Jordan Investment Board
                        P.O.Box:893
                    Amman-11821-Jordan
                     Tel: 962 6 5608400
                     Fax: 962 6 5608427
                  www.jordaninvestment.com


                                                                   63

								
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