For investment

The main issue facing investment in Jordan is not the red tape, the licensing procedures, the 39 post-licensing steps or the discomforting new investment law. The issue is basically socio-political.

Most government employers grew up with anti-private sector attitudes. They look at this sector as greedy, not paying taxes and belonging to citizens that often fail to abide by the law.

In addition, these employees view the economic relations between the public sector and the private sector as a zero-sum game. Whatever gains the private sector enjoys are looked upon as losses to the public sector.

Now, His Majesty King Abdullah is pushing Prime Minister Abdullah Ensour’s government to show more compassion and sensitivity to the private sector grievances.

Such grievances include change of heart after approvals, reinterpretation of the contractual agreements, adding financial burdens and creating unforeseen hurdles.

These grievances are particularly true when the government offers tax relief, cheap land, concessions and waivers on goods used in the construction of the investment.

What fuels such actions by the government is the instigation of other businessmen who see the new investment as a challenge or an opportunity that was not theirs.

Such cutthroat rivalry reaches injurious levels when the promise of large profits is there, as is the case in the energy sector, or when there is a juicy big project contract.

Private sector organisations lack disciplinary action. In the old bazaars, there was a chief merchant who ensured that the reputation of the merchants and tradesmen was protected by penalising any member who threatened that.

Now, disciplining is confined to laws and government inspectors.

What His Majesty is calling for is to cater to the private sector’s needs. This is an opportunity, but it is more of a challenge.

In periods of recession, Keynesian economics calls for bigger government spending and more private investments.

Keynes coined the term “double bluff”, whereby business is encouraged to invest in return for hefty returns until they are taxed and cannot go back on their investments.

This theory, which was referred to in many of his books, angered the working class. In a way Turgut Ozal applied the same in Turkey in the 1980s. It worked.

In return, the private sector should show its real mettle. It needs to go full throttle to start and invite investments into Jordan.

It also needs to exercise self-discipline and observe the countries’ priorities of creating gainful employment for Jordanians and combating poverty.

If it does not, the grievances of many Jordanians, especially those working in government institutions, their suspicion of the private sector will be justified.

Potential investors must also understand that they cannot have the cake and eat it alone.

If businesspeople show talent in coming up with new investments that help Jordan’s export of goods and services, they will be worthy of our respect.

The writer, a former Royal Court chief and deputy prime minister, is a member of the Senate. He contributed this article to The Jordan Times.