Jordan’s Adhérence to the Declaration on International Investment and

Multinational Entreprises

Dr. Awni Al-RushoudActing CEO

Paris 19 March, 2013

Projects Benefited from IPL -2008-2012 (JIB,2013)

20082009201020112012 -

500

1,000

1,500

2,000

2,500

3,000

االجنبي المحلي اإلستثمار اإلستثمار

يكري

مأرال

ود

نولي

م

1,440

2,339

2,565 2,7252274

) لتمديد ) قابلة المشروع تنفيذ في للبدء سنوات ثالث للمستثمرالتسجيل تاريخ من

3

No. of Job created and Projects registered 2008-2012 (JIB,2013)

20082009201020112012

الصناعة الفادق الزراعة المستشفيات

النقل المؤتمرات مراكز التسلية مدن أخرى

jobs 22,000projects 354

jobs 19,351projects 286

jobs 16,164projects 348

jobs 25,1863projects 505

jobs 22,360projects 464

4

Investments in the first two months of 2013 (JIB,2013)

شهرين شهرين 2012أول 2013أول0

100

200

300

400

500

600

700

210.3

400.7

210.4

197.7

االجنبي المحلي اإلستثمار اإلستثمار

ييك

رمأرال

ود

نولي

م

599

Growth Rate 42%421

حوالي الصناعية االستثمارات والفنادق % 84 شكلت االستثمارات % 15، حجم منعام من شهرين ألول 2013الكلية

Improving the Investment Climate (JIB , 2013)

Investment Climate/

BEE*

JudiciaryEnhancing

Transparency

Physical endowment**

Level of TechnologyIncreasing the R&D

spending Innovation , Science

Parks , and Incubation

Physical InfrastructurePPP law and

Investment in Mega Project DRSC

Laws, RegulationsThe New

Investment Law (2012) Policy

Refining Investment Policies –ppp Law-Tax LAW-

Other Laws

HR QualityConstant Training

And Building Capacity-KOICA-

JICA-USAID

Other

* : Business Enabling Environment ; **: Weather, Natural resources, etc.

Longer te

rm Shorter term

2.Investment Attraction

The Point of Access to the MENA Region

350.3 million is the 2011 estimate of the population of Arab countries*

$2,761 billion is the total MENA GDP in 2011**

2.3% is MENA’s population growth rate vs.. 1.2% the growth of the world population in the same period***

15.6% is MENA’s GDP growth for the period 2005–2011 compared to world average of 8%***

* Arab Monitory Fund Report** IMF World Economic Outlook Database*** IMF & UN World Population Perspectives Database

Beyond MENA

Jordan’s virtual hub allows free market access to over one billion consumers through its trade and investment

agreements

• Turkey FTA

• Singapore FTA

• Canada FTA

• Aghadir Agreement

• Greater Arab Free Trade Agreement (GAFTA)

• US FTA

• EU Association Agreement

• Qualified Industrial Zones Agreement (QIZ)

• Jordan-EFTA

Economic Freedom (2012) - Index of Economic Freedom - Heritage Foundation

32 Most Free Economy in the World3rd Most Free Economy in the Region

Scored 70.0 on Investment Freedom World Av. 59.5

Scored 69.9 on Economic Freedom World Av. 59.5

rank country overall score change from previous

1 Bahrain 75.2 -2.5

2 Qatar 71.3 0.8

3 Jordan 69.9 1.0

4 United Arab Emirates

69.3 1.5

5 Oman 67.9 -1.9

6 Israel 67.8 -0.7

7 Kuwait 62.5 -2.4

8 Saudi Arabia 62.5 -3.7

9 Morocco 60.2 0.6

10 Lebanon 60.1 0.0

Regional Ranking

• Growing number of FTAs since 1997

• Member of WTO since 2000

• 117 nationalities in industrial and service sectors own companies in

Jordan

• 51.3% of shares of publicly listed companies on Amman Stock Exchange

are owned by non-Jordanians*

• Equal treatment between Jordanians and non-Jordanians

• 100% Foreign Ownership

• Legal Framework that Encourages Investments

• No restrictions on capital transfers and repatriation of profits

• 55 Bilateral Investment Treaties

• 27 Double Taxation Agreements , and Visa upon entry at the Airport**

Liberal Economy

3. Investment Platforms

Development Zones designed to leverage the unique investment characteristics of every region

Dead Sea Developmen

t Area

Amman Development Area

Irbid Development

Area

5%Income Tax

0%Income Tax on Exports

0%Sales

Tax

0%Import Duties

0%Social

Services Tax

0%Dividends

Tax

Aqaba Special Economic

ZoneMa’an

Development Area

Mafraq Development Area

Jabil AjlounDevelopment

Area

4.Priority Sectors

Priority Sectors

Pharmaceutical

Pharmaceutical Sector exports of USD 500 million in 2011 reaching more than 60 countries worldwide

with more than 80 patents registered in Europe, the United States and

Japan.

18 players with international certifications (1 listed on LSE).

30% less cost than Europe and USA in clinical trial

testing.

World class Medical infrastructure: Jordan is the

region’s medical treatment hub (ranked no.1 as medical tourism destination according to World

Bank)

Healthcare

Healthcare costs in Jordan are fraction of the cost of that in Europe

and USA

The revenue from Medical Tourism reached USD 1 billion in 2010, with

over 220,000 foreign patients.

Jordan has 104 Hospitals, 6 of which are JCI accredited

ICT

Total ICT revenue in 2012 reached USD 2.5 Billion- 400 ACTIVE COMPANIES-

84000 JOBS-Fast Growing Sector-14% contribution to GDP

Jordan total ICT exports in 2011 reached USD 235 million where 85% of these exports targeted Arab countries.

Top export markets are the Saudi Arabia , Iraq, UAE, and USA.

Priority Sectors

EWE & Clean Energy

Located within world solar belt; 300-320 days of full sunshine, with solar irradiation levels of 2600Kwh/m2.

Wind speeds reach an average of 7 meters/sec in several locations.

40 billion tons of oil shale, 14 billion tons of silica, and 2% of the world’s uranium reserves

Committed governance and pro-investment Renewable Energy and Energy Efficiency Law

5.Future Prospect

1. Integrated Policy for Investment Attraction and Promotion

1. Integrated Policy for Investment Attraction and Promotion

• Jordan is establishing a clear-cut lines of authority and responsibility among FDI related governmental entities, especially among the JIB , DZ , FDA , ASEZA , Higher Council, the Ministry of Industry and Trade, and the Jordan Investment Board.

• Jordan is initiating comprehensive national economic and industrial development planning.

• Jordan is making a strong linkages between national industrial development strategy and FDI promotion policy.

• We are empowering JIB to perform the strategic FDI targeting planning at the working level.

• To work in organizational change at the JIB in establishing FDI promotion teams tailored to strategic targeting plans.

2.Knowledge Based Economy

4. Policy Recommendations

Knowledge-Based Economy:Hub of Service Off shoring and Export Platform

in the Middle East

Build Knowledge-Friendly

Environment

Pursue Substantial Trade and Investment

Liberalization

Establish and ImproveMechanism of

Safety Net

- Enhancing Knowledge Diffusion

- Establishing an Innovative R&D System

- Upgrading Human Capital

Future Vision

Strategies

Action Plans

Improve Investment

Climate

- Pursing Comprehensive and High-Quality RTAs

- Improve Utilization of RTAs

- Expanding RTA Networks to Asia

- Establishing Various Types of Economic Zones

- Enhancing Entrepreneurship

- Discovering New Investment Areas

- Refining Mechanism of Trade Remedy Systems

-Actively Participating into the WTO DSM

- Building Trade Adjustment Assistance

3. After-Care Services

Pillars of attracting FDI (After Care)

Experience in JIB Indicated that over 50% of investment can come from expansions or reinvestments that is why our ACU is very active.

CostQuality

Customer Care and After Care

Unit (ACU)

4. Human Capital for New Market Opportunities

Qualified Human Capital to build aKnowledge Based Economy

– Expenditure on education is 9.7% of Government expenditures

– One of the highest country in the world in terms of engineers per capita

– One of the highest countries in the region in terms of doctors and nurses per capita

– Government programs to fill in the gap between market needs and educational output, in addition to programs to subsidize new graduate wages in the ICT sector

– Jordan ranked 1st in the Arab world in terms of education reform

7.Jordan’s Adhere to the Declaration on International

Investment and Multinational Enterprises

Jordan’s adherence to the Declaration

• In August 2006, Jordan requested to adhere to the Declaration on International Investment and Multinational Enterprises and to participate in the work of the Investment Committee.

• In March 2009, the OECD Council agreed to invite Jordan, subject to a full review of its investment policies by the Investment Committee, to adhere to the OECD Declaration and to participate in related work of the Investment Committee and its Working Party.

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• A follow-up has been provided by the Jordan Investment Board (JIB) since early 2009 on this matter. In particular, sort of intensive due diligence process was carrying out to determine the required steps for Jordan to join the Declaration.

• A submittal document framed within the OECD requirements has been prepared by the JIB in 2010.

Jordan’s adherence to the Declaration

• A national committee was formed to follow the next steps in the procedure for Jordan’s adherence to the OECD Declaration, and to gather the information that was needed to complete the background report describing Jordan’s investment policy framework; the Investment Policy Review )IPR(.

• The committee composed of 17 members who represent government and non-government institutions )private sector, civil society and international organizations(.

Jordan’s adherence to the Declaration

1. Investment policy2. Investment promotion and facilitation3. Trade policy4. Anti – Corruption 5. Competition policy6. Infrastructure development 7. Financial sector development

Core Principles: Policy coherence , transparency, accountability, regular evaluation

Characteristics: Non-binding, non-prescriptive, comprehensive , systematic

Jordan Investment Policy Review

7 areas were selected for the Jordan Investment Policy Review

FINAL REMARKS…

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Key Messages

• Jordan has experienced a solid structural transformation based on three pillars: security and political reform, social inclusion and investment confidence policies.

• Jordan public policies are consistent and work towards the fulfillment of the guidelines of the Declaration on International Investment and Multinational Enterprises.

• Jordan is committed to set up a strong and effective NCP at the Jordan Investment Board: promoting the Guidelines, attending properly any dispute related to the implementation of the Guidelines, and interacting with other NCP´s.

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Thank You