Jordan Times
Tuesday, August 24, 2004
Planning minister wants
private sector to demonstrate creativity, business vigour
By Rami Abdelrahman
AMMAN — The private sector was asked Monday to show creativity by coming up with
initiatives and ideas and to demonstrate its influence by reinvigorating the
role of the chambers of commerce and industry.
At a meeting with members of the Jordan Europe Business Association and
representatives of various economic sectors, Planning and International
Cooperation Minister Bassem Awadallah said the private sector should make better
use of Jordan's free trade agreements to maximise the country's benefits from
the preferential treatments given by partners such as the United States and the
European Union (EU)
Urging the private sector to get over its hesitancy and unpreparedness for
exporting to large markets, the minister stressed that businesses should work
towards enhancing product standards, acquiring necessary certificates and
applying required bases of origin in order to engage in export activities in
line with the Kingdom's agreements with such large markets.
“How can we realise a real public-private partnership when the private sector is
lagging behind?” the minister asked. “The government still has a long way to
complete its reforms and the private sector should work towards the same
direction.”
According to Awadallah, the private sector should work closely with training
centres to harmonise programmes with human resource needs because such a step
“has not taken place yet.”
Citing statistics that 23 per cent of Jordanians are active economically, the
planning chief listed low productivity as a major disadvantage slowing down
foreign investment in the Kingdom.
On the bright side, Awadallah reiterated that the economy is improving in a
sustainable manner despite all regional challenges, as its growth rate reached
6.9 per cent during the first half of fiscal year 2004.
He emphasised that the reform programmes are baring fruits, and that people are
feeling the effect.
“Anyone questioning whether we are on the right track or not should consult the
international community's views on Jordan,” Awadallah argued. “Our donors
account for the money they grant to see results and they confirm the right track
wer'e on.”
The minister announced at the meeting that during 2005 more trade agreements
will be in effect, providing more preferential treatments for Jordanian exports.
Next year will usher changes in global economic realities such as the lifting of
quotas on garment exports to the US.
“The Aghadir Agreement will be in effect in 2005 if our counterparts agreed on
the location of its secretariat,” Awadallah said.
The Aghadir Agreement was signed last February between Jordan, Egypt, Tunis and
Algeria (all sharing Free Trade Agreements with the EU), allowing these
countries to integrate in terms of cumulating bases of origin of products to be
exported to the EU. Awadallah described the accord as a major step towards
establishing an Arab Free Trade Area.
Early next year, the Pan Euro-Mediterranean Rules of Origin system will be put
into effect, allowing Jordanian industries to cumulate bases of origin from 41
countries.
Awadallah indicated that products from the Jordanian Qualifying Industrial Zones
(QIZ) will be allowed into the European market from next year under the same
privileges of the QIZ agreement with the US and Israel,.
QIZ exporters enjoy unrestricted quota and duty-free access to the US market as
long as the product include an eight per cent of Israeli inputs.
During the World Economic Forum in Jordan last year, the government signed a
memorandum of understanding with Israel to facilitate bases of origin for QIZ
exports to the EU.
Awadallah pointed out that Jordan and the EU have set a framework to expand
cooperation in line with the Jordan-US Free Trade Agreement.
According to the minister, the framework will be in effect next year and will
provide the Kingdom with EU grants to support reforms and enhance Jordan's
relations with the EU.
Between 1996 and 2000, the EU's scheduled grants to the Kingdom amounted to 269
million euros. Awadallah expects this sum to reach 310 million euros for the
2001 to 2006 period.
The trade balance between the country and the EU reached a yearly average of
JD1.1 billion. During 2003, Jordan's exports to the EU totalled JD55.3 million,
and amounted to JD27 million during the first half of 2004.
However, Jordan's imports from the EU reached JD1.05 billion and JD600 million
respectively.
European investments in the Kingdom during 2003 reached JD45.5 million, and JD2
million during the first half of 2004, representing respectively 30 per cent and
8.6 per cent of total investments in Jordan.