Jordan unveils ambitious plan to boost economic growth

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Jordanian authorities on Monday unveiled a plan to improve its economy, but a World Bank official said the kingdom would remain stagnant as long as people preferred public jobs and women were excluded from the labor market.

The economy has been mostly stagnant for the past 12 years, with unemployment officially at an all-time high of around 24% and foreign investment falling sharply from a peak of $3.6 billion in 2006 to $726 million in 2021, according to UN data.

The retreat prompted King Abdullah to convene meetings over the past few months of loyalist scholars, businessmen and civil servants to craft a plan to create more jobs, expand the middle class and raise standard of living.

A 123-page official document with proposed solutions was released Monday at a Dead Sea event the king attended.

The biggest challenge is finding jobs for the one million young people who are expected to look for work over the next decade. Raising average incomes by 3 percent each year and making substantial improvements in living standards are also urgent goals for the government.

Per capita income in the kingdom of 10 million people is $4,300 a year. The government says the economy grew by 2% last year, compared to a contraction of 2% in 2020. The document predicts annual growth of 3% for the next decade.

He said the economy had deteriorated due to rising energy prices, weak demand, falling foreign investment and a “decline in productivity and competitiveness and weak innovation”.

The documents envisage $5 billion in investments per year over the next decade to increase agricultural and mining production, develop pharmaceutical and other industries, improve water, transport and gas infrastructure and introduce a 5G network. , as well as developing national medical insurance.

Prime Minister Bisher Al Khasawneh said solutions require “true partnership with the private sector”.

“This document allows us to be ambitious,” he said. “It’s based on assumptions and numbers.”

Foreign investment fell to $718 million in 2020 from $730 million in 2019, according to World Bank data.

The government has tried to induce private investors to invest in major infrastructure by offering them concessions and tax breaks.

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But only a few significant projects have seen the light of day in this context. One of them was a 25-year concession granted to the French consortium Aeroports de Paris to build and operate the new airport in Amman.

Saroj Kumar Jha, director of the World Bank’s Mashreq department, which covers Lebanon, Iraq, Syria, Jordan and Iran, said that although many Jordanians are talented and work in international companies around the world as a whole, the kingdom must create what it calls a culture of entrepreneurship and allocate funds for research and development.

“If we only value government jobs, we have a problem,” Mr Jha told a session attended by Crown Prince Hussein, the king’s eldest son.

The public sector accounts for at least 40% of jobs in the country, overwhelmingly allocated to members of the country’s tribes, who also support the security forces.

Mr. Jha said Jordan should encourage women to join the labor market.

“We cannot expect this country to have a vision for 2030 with only 20% of women working in the economic space,” he said.

Updated: June 06, 2022, 3:55 p.m.

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