Jordan Times
Sunday, April 17, 2005
Study estimates money
flow from Iraqis at $2b
By Mahmoud Al Abed
AMMAN — Political conditions and an
investment-friendly environment are the two key factors likely to affect the
future of the growing Iraqi investments in Jordan.
In a study by researcher Abdul Salam Nueimat, the Iraqi businesses include both
private investments and joint government ventures.
The future of joint projects depends on the nature of political ties between the
two sides,” Nueimat indicated, stressing that investments should be neutral and
free from any political influence.
Four papers, sponsored by the German Friedrich Ebert Stiftung, were presented at
a workshop held at the Royal Scientific Society where scholars sought to measure
the impact of the Iraq developments on Jordan's economy.
Jordan and Iraq have cooperated for decades in joint projects at the state
level. Examples of official investments include the $50 million Iraqi Jordanian
Land Transport Company, whose business has been faltering due to the
deteriorating security situation in Iraq and the Arab Centre for Pharmaceutical
Industries, which has been working since 1983.
Another project, in which Egypt is also a partner, is the Arab Bridge Company
(ABC), a $12 million maritime transport company that monopolises the
Aqaba-Nuweibeh route.
Between 1988 and the end of 2003, ABC carried 15 million passengers and hundreds
of thousands of small vehicles and trucks on its ferries shuttling between
Jordan and Egypt.
Private Iraqi investment, however, is concentrated in the real estate sector.
According to unofficial figures mentioned in the study, Iraqis taking refuge in
Jordan after the collapse of the former regime brought in about $2 billion and
reinvigorated the local economic activity.
This situation was similar to the 1990-1991 period when, due to the Gulf War,
thousands of returnees brought back home millions of their savings and caused a
surge in real estate prices.
The study calculated the Iraqi share of real estate deals by non-Jordanians last
year at 56.6 per cent or JD33.5 million, higher than the 39 per cent share in
2003.
Figures show that Iraqis were not interested in investing their money in the
Amman Stock Exchange.
But Iraqi investments were impressive in private businesses as the amount of
funds invested in this category during the first three months of the current
year amounted JD10.55 million, double the amount invested throughout 2000.
Last year, Iraqis pumped about JD23.9 million in Jordanian businesses rather
than public shareholding companies.
The challenge, says the researcher, is to keep these investments in Jordan and
try to attract more even if the dust settles in the eastern neighbour.