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Government-made challenges facing industry sector

Jul 16,2017 - Last updated at Jul 16,2017

Prime Minister Hani Mulki will very soon, perhaps next week, meet with the leaders of the industrial sector. 

The purpose is to look into the challenges and hurdles that are facing this vital sector and preventing its take-off as a leader of the economy.

This is of course a welcome step. It shows that the cries of the industrialists have finally reached the ears at the highest level of government to press officials to pay attention and discuss the subject in a way to reveal what is each party’s share of responsibility for this alarming situation.

The manufacturing industrial sector contributes around 17 per cent of the gross domestic product. 

It provides jobs for more than 20 per cent of the country’s labour force. It produces the bulk of Jordan’s national exports; accordingly, it deserves full attention and looking at the challenges to industry from a wider view of the national economy.

Industrialists have a lot of issues to raise, but the bulk of the complaining will not be about actions that the government did not take to help the industry. It will be about actions the government took to the detriment of the industry.

What the government has to do, therefore, is not to support or subsidise industry; it is to put an end to policies and actions that have harmed industry and will continue to do so.

What I have in mind is Jordan’s entry into free trade agreements and sweeping exemptions on reciprocal bases with countries and trade blocs that local industry cannot match.

They do not allow fair competition. The end-result was a trade in one direction. 

Suffice it to say that the EU exports to Jordan are currently equal to 35 times its imports from Jordan.

Europe is an agricultural area. They import phosphate and potash, but not from Jordan.

Would you believe that Jordan, with its huge deficit in its budget and dependence on foreign grants and loans, would agree to exempt all imports from Europe from customs duties based on the so-called partnership and reciprocal exemptions?

Such unwise policy has deprived the Treasury of hundreds of millions of dinars every year and has been instrumental in suffocating Jordan’s infant industry, which was born and has lived behind protection walls.

Who would believe that a country with an over 18 per cent unemployment rate would agree to give priory to Syrian labourers, not only by exempting them from all taxes and restrictions applied to all other nationalities, but also by securing a quota of jobs for starting with 15 per cent and rising gradually to 25 per cent of the workforce of Jordanian companies that hope to export to Europe?

Who would accept any formula of trade with countries that subsidise their exports, such as Turkey, or with countries that provide electricity, water, and fuel at nominal prices such as Arab Gulf states, which hardly import anything from Jordan beside vegetables and fruits?

Jordanian officials thought at the time that going too far in an open market policy would attract foreign investors to benefit from Jordan’s right to access the European market.


As a matter of fact, Jordanian industries are met in Europe with restrictions and hard rules of origin that are worse than what such foreign investors would face in Europe if they made it on their own.

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