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Re-understanding the real drivers of economy

Mar 23,2024 - Last updated at Mar 23,2024

 

Emerging into the future that we want economically requires unleashing the business sector and not restricting it, trying to direct it, setting ready-made templates for it, or thinking or planning on its behalf, as it is more agile, creative, innovative, efficient and effective than the mentality with which the public sector is managed.

It represents the primary success factor in providing a suitable enabling environment for the business sector so that it can operate with the highest levels of efficiency, effectiveness and productivity, which enhances its competitive advantages and achieves leading positions and large and qualitative market shares.

Transportation is the basis of development, so it is important to connect the Kingdom with a railway from north to south, a “high-speed train” with specific stations from north of Irbid to the University of Science and Technology to Mafraq to Al al-Bayt University to the Hashemite University to east of Zarqa to east of Amman to its south to the airport and from there in the future to the entrance to Karak, to the entrance to Tafila, to the entrance to Ma’an, to Aqaba, and from there in the future to Wadi Araba, to the southern Jordan Valley, then the middle, then the northern. 

There is nothing wrong with this being through foreign investment for several years that ultimately belongs to the state.

This is what automatically transfers urbanisation to those areas and makes development actually extend to them in a sustainable manner that is enhanced over time, thus including various parts of the Kingdom in comprehensive development efforts.

This requires linking train stations to an integrated and effective internal transportation network.

I see a focus on priorities with a competitive advantage and relatively high added value, most notably tourism, medical tourism, education, food security, technology, logistics and supply chains.

It is necessary to follow up and ensure the achievement of sustainable development goals and monitor and improve Jordan’s score and ranking in international indicators.

Issuing an annual report on Jordan’s score and ranking in the most prominent international indicators, publishing it and working to constantly improve it.

It is necessary to enhance investor confidence in the investment environment and the relative stability in legislation and policies, and to ensure the relative low cost of products, which increases their competitiveness in various markets and thus increases the volume of activity, job opportunities, and the state’s revenue collection. 

The current investor faces several challenges that make them hesitant to expand their investment, and the potential investor also hesitates in making their decision to invest due to considerations, some of which are impressionistic and some of which are purely objective: 

The first objective considerations that must be addressed without delay are the changing priorities and interests of governments, and this is reflected in various sectors, which raises the level of risk and hesitation among those who intend to invest or expand investment.

The second of these considerations is the fear that a change in officials might lead to a change in incentive policies and procedures, and therefore what guarantee is there for them not to change or retract them? What matters to them is its consistency and stability, even if it is relative and according to agreement.

The third of these considerations is that the actual activation and application of these incentive policies and procedures depends on the ability and strength of those responsible for them, and their change may expose them to ebbs and flows, especially when they are not at the same level in terms of ability and influence.

The fourth of these considerations may be that officials’ interest may be intense in the beginning with the aim of attracting investors, but unfortunately in many cases this interest soon declines once the investment begins to be implemented. In the beginning, officials are the ones who take the initiative and follow up with investors and try to overcome any obstacles, but unfortunately this interest wanes and the investor becomes the one who searches for the responsible person, as if the goal is achieved by simply registering the investment, unaware of the importance of sponsoring long-term investment, which is linked to the annual and continuous revenues that the public treasury earns from fees, taxes, etc., and most importantly, moving the wheel of the economy, operating various sectors, and creating job opportunities.

I suggest setting a ceiling for any taxes or fees on products and services so that they do not, under any circumstances, exceed a certain percentage of the value of these products and services in order to maintain their attractiveness and competitiveness and not kill the economy.

A complete digital transformation of investment and business sector services, especially those that are jointly provided by more than one government entity is also proposed.

It is important for the government to enact the best legislation, adopt the most effective policies, make the soundest decisions, and implement the smoothest procedures, but this alone is not enough to attract Jordanian and foreign investors. 

The question is: What is the real worry and discouragement of the investor’s decision to invest? It is what guarantees the investor that these laws, policies, decisions or procedures will not change after a year or years due to a change in people or by the same people or until the moment he makes his decision to invest. 

As soon as an investor’s project is established, the policies and procedures change, which makes investors ignorant of the future of their investment, making them unsure of the survival and continuation of the policies on which they based their decision to invest, meaning that they will work in an investment environment that is unstable in its dimensions to the point that they expect any decision to be issued at any moment without their knowledge and participation.

These conditions of uncertainty prompt investors not to venture out, refrain from investing in Jordan and search for other investment opportunities.

Therefore, there must be controls and guarantees that prevent the entry into force of any amendments, legislative changes, policies or decisions that affect the existing investment before these amendments or changes are made unless they are in its interest and with the approval of its owners or controls to stabilise the basic factors affecting the investment. 

Otherwise, the current or potential investor remains hesitant, conservative, apprehensive and uncomfortable.

Finally, understanding the missing links in the economy and taking the necessary measures enables the business sector to be more productive, efficient and effective, thus multiplying economic growth that increases the revenues of the state’s public treasury and improves living standards. This is a call for officials to re-understand the real drivers of the economy that ensure improved and sustainable performance.

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