Kingdom takes central position on business friendliness index

AMMAN — Jordan ranked 67th best economy worldwide in Forbes’ 12th annual survey of the Best Countries for Business, which rates the trade friendliness of a total of 153 economies around the world.

The ranking determines the best countries for business by rating the selected nations on 15 different factors including property rights, innovation, taxes, technology, corruption, personal, trade and monetary freedom, red tape and investor protection.

The ranking modified its methodology in this edition for the first time in a decade after conversations with multiple site-selection experts, according to a press release by Forbes. 

Stock market performance was eliminated from the list of factors to consider, while workforce, infrastructure, market size, quality of life and political risk were added on the list with the aim of “providing a better gauge of how attractive a country is for capital investment”, the press release said. 

The ranking data is based on several reports published by the Freedom House, the Heritage Foundation, the Property Rights Alliance and the United Nations, among others. 

Forbes’ brief on Jordan commended the measures implemented by the country in the first decade of the 2000s, which saw significant economic reforms such as the expansion of foreign trade and the privatisation of state owned companies that attracted foreign investment, resulting in an average economic growth by 8 per cent from 2004 to 2008.

However, the global economic slowdown and regional turmoil have contributed to a slower growth from 2010 to 2016, hurting export-oriented sectors such as construction and tourism, according to the report. 

“Since the onset of the civil war in Syria and the resulting refugee crisis, one of Jordan’s most pressing socioeconomic challenges has been managing the influx of 650,000 UN-registered refugees, more than 80 per cent of whom live in Jordan’s urban areas,” the report said. 

“Insufficient supplies of water, oil, and other natural resources are underlying the government’s heavy reliance on foreign assistance,” the report continued, noting that “other economic challenges for the government include chronic high rates of poverty, unemployment, budget and current account deficits and government debt”.

In addition, the report criticised the Kingdom’s dependence on imported energy, making up for a 25 per cent of Jordan’s imports.

“However, Jordan has secured several contracts for liquefied natural gas and is currently exploring nuclear power generation, exploitation of abundant oil shale reserves and renewable technologies,” the brief said. 

“Jordan’s central position in the global — and even the Arab — rankings reflects the unstable economic capacities and potentials of a sustainable trend, which are expressed by the Jordanian economic indicators,” economist Hosam Ayesh told The Jordan Times in a recent interview. 

Referring to the advance in some of the indicators rated in the ranking, the economist said that “it requires long-term efforts rather than temporary to penetrate the monotony of the Jordanian market, which suffers from a difficult regional situation and the absence of a legislative environment that takes into account the present and future needs”.

For his part, Foodstuff Traders Association President Khalil Haj Tawfiq said that “regardless of the report showing some positive points about Jordan’s business climate, there are a lot of actions that need to be taken by the public sector towards better cooperation with the private sector”.

“We feel that the tax burden is a major problem for businesses in Jordan,” Tawfiq pointed out, adding that “it is extremely difficult to get funding to start new projects, and there is no legislative consistency.”