Business

AMMAN — Finance Minister Omar Malhas held talks with several US officials during the annual meetings of the International Monetary Fund (IMF) and the World Bank. Malhas discussed with US Secretary of State John Kerry the importance of the US initiative that aims at allowing 1.5 billion people around the world to use Internet by 2020 as a basic part of economic development.

Malhas also discussed with other officials the most important challenges facing the Kingdom and the proper means to support national economy. In meetings with US businesspeople and investors, the finance minister highlighted Jordan's safe and stable investment environment. At the end of the meetings, an agreement was reached to have a delegation from the IMF visit Jordan in May to officially discuss the details of the new programme with the fund.

Moreover, Malhas discussed with representatives of the financial affairs department in the IMF technical support that could be offered to the investment governance unit at the Planning and International Cooperation Ministry, in addition to support for reforming sales tax and customs fees. 

AMMAN – Jordan Investment Commission (JIC) President Thabet Al Wir Wednesday met with a delegation from the Swedish company IKEA, and briefed them on investment opportunities in the Kingdom, according to a JIC statement.

Al Wir underlined the importance of JIC achievements in enhancing the Jordanian investment in the international markets. He said JIC seeks to improve investment conditions, which stimulate development and to find solutions to challenges faced by investors.

The meeting included a detailed presentation about investment in Jordan, the targeted sectors and the features that the new investment law provides, in addition to success stories achieved by Jordanian companies' owners in the field of wood and furniture industry.

AMMAN – Minister of Planning and International Cooperation Imad Fakhoury on Tuesday briefed French President Francois Hollande and the accompanying delegation of businesspeople on what Jordan can offer to investors while working to turn challenges caused by the Syrian refugee crisis into economic opportunities. 

At a presentation during the French-Jordanian Economic Forum at the Jordan Chamber of Commerce, Fakhoury said the private sector could play an important role in the response plan to the Syrian refugee crisis by alleviating social problems in the region while creating economic gains for shareholders.

He called for building on what has to offer through its strategic location on world’s main trade route, preferential access to most global markets, productive and qualified labour force, favourable tax conditions, political and macroeconomic stability and long-term planning through the Jordan Vision 2025.

The minister said that Jordan has bilateral trade agreements with 38 countries, whose markets would absorb future goods.  

Pointing out to London conference on the Syrian crisis in February of this year, which acknowledged the importance of including Jordan into the EU value chain, Fakhoury said a 10-year agreement to grant Jordan simplified rules of origin status would support Jordanian products to reach the EU market in the short term and improve Jordan’s supply chain and national competiveness to be one of the EU reliable suppliers. 

Fakhoury said that Jordan can also play a major role in the reconstruction efforts in the region, adding that the Kingdom is home to productive and qualified human resources. 

He said that many multinational companies are already present in the Kingdom. 

He briefed the attendees on tax incentives for businesses, who he said would also enjoy extensive support from government. 

He underlined tax incentives in special economic zones, explaining that companies would enjoy a low income tax rate of only 5 per cent on all taxable incomes, zero sales tax on goods and services acquired by a registered enterprise, import duties of zero rate on all materials, instruments and machines used in establishing, constructing and equipping a registered enterprise and a zero rate on dividends tax on all income accrued within the zone or outside the Kingdom. 

Fakhoury said Jordan offers macroeconomic stability for exporters, and a political environment supportive of economic growth, pointing out to a stable and high economic growth of at least 2.5 per cent consistently over the past 15 years. 

There is a clear commitment to the private enterprise system, he said, noting that Jordan ranked 38th out of 178 countries in the economic freedom index. 

Fakhoury briefed them on Jordan Vision 2025, which is a 10-year economic blueprint that seeks to achieve a more resilient and prosperous Jordan, focusing on inclusive growth and improving economic competitiveness, investment climate, ease of doing business, self-reliance and entrepreneurship and innovation, based on nine economic clusters.

AMMAN — The industrial sector contributes  24 per cent of the gross domestic product ( GDP), provides 200,000 to 250,000 jobs and constitutes some 90 per cent of the Jordanian exports, Industry, Trade and Supply Minister Maha Ali said Tuesday.

Deputising for Prime Minister Abdullah Ensour in inaugurating the 6th Jordan international exhibition for chemical industries, Ali noted that Jordanian chemical industries account for 22 per cent of the Kingdom's total industrial exports.

Jordan has achieved "big accomplishments" in the last 15 years, whereas the GDP grew from $8.5 billion in 2000 to $36.7 billion in 2015, with foreign investments in the Kingdom reaching $1.2 billion in 2015, the minister indicated.

She said the exhibition, being held at the Amman Motor Show, acquired a good reputation as an important economic annual event in Jordan, due to providing an opportunity for the local and international public and private sectors to discuss different economic issues.

Ali expressed the government's keenness to improve policies and laws aimed at enhancing the business and investment environment, and penetrating international markets of more than 1 billion consumers through free trade agreements the Kingdom signed with Arab countries, the US, Canada and the EU.

Khaldoun Nuseir, the chief executive officer of Afaq Group which is organising the three-day fair, said the event provides a good opportunity for participating businesspeople to exchange views and increase the investment and commercial cooperation among them.

A total of 140 companies, 83 of which are Egyptian,  are taking part in this year's exhibition, covering 8,000 square metres. The rest are Jordanian, Algerian, Tunisian, Saudi, Palestinian and Turkish firms.

AMMAN — The Jordan Industrial Estate Company (JIEC) promoted investment opportunities available at its industrial estates to Arab and foreign heads of states and businesspeople during its Participation in Dubai's annual investment forum and exhibition, JIEC said on Tuesday.

During the forum, held last week, JIEC Chief Executive Jalal Al Debei met with several investors and businesspeople and briefed them on the Kingdom's secure investment environment. JIEC received applications to invest in industrial estates, Debei said, noting that the company will study them and contact investors.

JIEC officials held several bilateral meetings with economic delegations taking part in the forum and discussed cooperation opportunities in industrial estates. On the sidelines of the event, Debei met with Chinese businesspeople and reviewed the company's plans and investments available, in addition to discussing investment in the alternative energy sector.

BRUSSELS/BEIJING — China and other major steel-producing countries failed to agree measures to tackle a global steel crisis as the sides argued over the causes of overcapacity, prompting US criticism of Beijing's approach and an angry response from Chinese officials.

A meeting of ministers and trade officials from over 30 countries, hosted by Belgium and the Organisation for Economic Cooperation and development (OECD) on Monday, sought to tackle excess capacity, but concluded only that it had to be dealt with in a swift and structural way.

Washington pointed the finger at China over the failure of the talks, saying Beijing needed to act on overcapacity or face possible trade action from other countries.

"Unless China starts to take timely and concrete actions to reduce its excess production and capacity in industries including steel... the fundamental structural problems in the industry will remain and affected governments, including the United States, will have no alternatives other than trade action to avoid harm to their domestic industries and workers," US Secretary of Commerce Penny Pritzker and US Trade Representative Michael Froman said in a statement.

Asked what steps the Chinese government would take following the unsuccessful talks, China commerce ministry spokesman Shen Danyang told reporters on Tuesday: "China has already done more than enough. What more do you want us to do?"

"Steel is the food of industry, the food of economic development. At present, the major problem is that countries that need food have a poor appetite so it looks like there's too much food," he said.

The OECD indicated that global steelmaking capacity was 2.37 billion tonnes in 2015, but declining production meant that only 67.5 per cent of that was being used, down from 70.9 per cent in 2014.

Britain in particular has felt the squeeze as its largest producer Tata Steel has announced plans to pull out of the country, threatening 15,000 jobs. Last week, more than 40,000 German steel workers took to the streets to protest against dumping from China.

China, the world's top steel producer, has been ramping up exports of steel in recent years, as it battles to steer its economy into services-led growth and away from traditional manufacturing, while keeping employment levels high.

China's steel exports jumped 30 per cent from a year ago to 9.98 million tonnes in March despite a slew of anti-dumping measures globally.

But blaming China for woes in the global steel industry is simply a lazy excuse for protectionism, and such finger-pointing will be counter-productive, China's official Xinhua news agency said in a commentary on Monday.

"It's more been their competitive advantage into Asian countries which has really driven that rise in exports," indicated Daniel Hynes, a commodity strategist at ANZ Bank.  "I think that will continue and will keep those export levels relatively high despite the pressures we're seeing now."

Deep divisions

At a news conference following Monday's meeting, deep divisions between China and other producers were clear.

Cecelia Malmstrom, the European Union's (EU) trade commissioner, insisted governments should not grant subsidies that keep unviable plants running and should subject state-controlled firms to the same rules as the private sector.

China's assistant commerce minister, Zhang Ji, indicated that China had cut 90 million tonnes of capacity and had plans to reduce it by a further 100-150 million tonnes.

"That is only 10 million tonnes less than the capacity in Europe," he added, although critics say it would still have a capacity of around 1 billion tonnes, far in excess of its needs.

China's main iron and steel body has previously acknowledged that the flood of Chinese steel product exports is damaging to the country's efforts to gain market economy status from the EU, an important goal for Beijing as the domestic economy slows.

Li Xinchuang, the vice secretary of general of the China Iron and Steel Association, rejected the US criticisms.

"It is a totally pointless complaint from the US and it's biased against China," Li told Reuters by phone. "China's steel industry is market-based and Chinese steel products have good quality, low price and good service. The complaint on government subsidies is also crap."

Tensions have erupted between other producers, with Japan leading criticism of Indian minimum prices for imported steel at a recent World Trade Organisation meeting and Japan and South Korea coming under fire for exporting steel products cheaper than they sell them at home.

In a step by Beijing to reduce trade frictions with Washington, it has agreed to scrap some export subsidies on a range of products including steel, the United States said last week.

But there were signs the spat was spreading. The United Steelworkers (USW) said on Monday it has filed a case with US regulators seeking to stem a "flood" of aluminum imports the trade unions says have damaged US producers and threatened jobs.

The case is the latest move by the US aluminum industry to try and get authorities to investigate the impact of rising imports, particularly from China.

OCCUPIED JERUSALEM — The Palestinian economy is losing hundreds of millions of dollars every year over outdated or insufficiently enforced fiscal agreements with Israel, a World Bank report said on Monday.

The lost revenue of $285 million annually was equivalent to 2.2 per cent of Palestinian gross domestic product (GDP), according to the report prepared ahead of the bi-annual meeting of the Ad Hoc Liaison Committee (AHLC) which coordinates international donor support for the Palestinians.

The Ramallah-based Palestinian Authority (PA) "suffers from substantial revenue losses under the current revenue sharing arrangements outlined by the Paris Protocol", the report said of the 1994 agreement which governs economic ties between Israel and the Palestinian territories.

It added that most of the losses are a result of "tax leakages on bilateral trade with Israel, in addition to undervaluation of Palestinian imports from third countries".

The World Bank also noted the handling fees Israel takes for imports en route to the Palestinians, which at the current rate of three per cent "significantly outstrips costs incurred by [Israel] to handle Palestinian imports", recommending that the rate be reduced to 0.6 per cent.

The World Bank said it could not quantify the losses to the PA because of a lack of access to Israeli data.

The Palestinian Authority has also so far failed to open a "dedicated fund" to receive $669 million in pension payments collected by the Israeli government for Palestinians working in Israel.

The World Bank noted recent meetings between Israeli and Palestinian finance ministers over the issues, and Israel's commitment to transfer $128 million to "offset some of the PA's losses", calling it "highly encouraging as a first step".

"Reviving the Israeli-Palestinian Joint Economic Committee, originally set to monitor implementation of the Paris Protocol and resolve outstanding issues, could significantly enhance economic and fiscal cooperation between the parties," it said in a statement.

Resolving outstanding financial "issues" between Israel and the Palestinians could not only "ease the PA's fiscal stress" and improve its economy but might even "facilitate progress on the political front", the report added.

The Israeli finance ministry said that it ensures that the Paris accords are implemented and has made reductions in its handling fees totalling around $21 million.

"We regret that the World Bank report gave an exaggerated and one-sided analysis of damage to the PA's revenues," it wrote in a response to AFP's query.

"The ministry of finance continues to maintain a positive dialogue with the Palestinian Authority intended for the benefit of both sides," it said.

Earlier this month, Israeli and Palestinian officials agreed to end several days of rolling blackouts in the occupied West Bank over what Israel says is some $450 million in arrears for electricity supplied by Israel.

The World Bank report was set to be presented to the AHLC on Tuesday in Brussels.

Separately, a new report released Monday by the World Bank shows that Qatar, the United Arab Emirates and other Arab donors have delivered only a small fraction of what was promised after Arab countries led the way in pledging reconstruction aid to Gaza, the seaside enclave devastated following Israel's war against militants in 2014.

The World Bank's report sends a stark message that donations are well behind the schedule set when pledges were made at an international conference in October 2014.

"Actual disbursements fall short of planned disbursements by around $1.3 billion, and hence, donors are urged to accelerate the disbursement of funds," the report said. 

If donor funding continues at the current pace, it added, pledges are expected to be complete by mid-2019, some two years behind schedule.

The fighting inflicted heavy damage on Gaza, damaging or destroying some 171,000 homes, according to UN figures. The Palestinians say 75,000 people remain homeless. Israel says Hamas is responsible for the damage, noting the group used residential neighbourhoods for cover as it fired rockets, triggering Israeli retaliation.

At the 2014 conference in Cairo, the international community pledged some $3.51 billion in aid over three years to rebuild Gaza. According to Monday's report, as of the end of March, $1.41 billion has been delivered, compared to $2.71 billion that should have arrived by now.

Qatar led the list of donors in 2014, pledging $1 billion. The energy-rich country's foreign minister at the time, Khalid Bin Mohammed Al Attiyah, denounced the "international silence" that surrounded Gaza's destruction.

"While the Palestinian people need financial support, they need more political support from the international community," he said at the time.

Yet a year and half later, Qatar has delivered only $152 million, or 15 per cent of what was promised, according to the World Bank.

Saudi Arabia, the number 2 donor, has delivered just over 10 per cent of the $500 million it pledged, while the UAE has sent just 15 per cent of the $200 million it promised and Kuwait has delivered none of the $200 million it pledged. 

Turkey, one of Hamas' closest allies, has delivered about one-third of the $200 million it pledged.

In Ankara, a Turkish foreign ministry official said that Turkish aid is expected to reach up to $250 million by the 2017 target date "and therefore to exceed the pledge that was made." The official spoke on condition of anonymity in line with government regulations.

Officials from the Gulf Arab countries were not immediately available for comment.

In contrast, the United States, the number 4 donor, has delivered all of the $277 million it pledged, while the European Union, the number 3 donor, has sent nearly three-quarters of the $348 million it promised, according to the figures. 

Individual European nations, including Norway, Switzerland, Germany and the UK have all sent most or all of the aid they pledged.

The international aid is meant to pass through the internationally recognised PA, bypassing Hamas. 

Last week, Palestinian Prime Minister Rami Hamdallah urged donor countries to "make good on their pledges." 

For years, the Palestinians, who rely heavily on donor aid to prop up their self-rule government, have complained that Arab allies have been slow in delivering promised assistance.

Hamas spokesman Sami Abu Zuhri urged donors to fulfill their pledges, warning that ongoing harsh conditions in Gaza could lead to renewed violence.

"Unfortunately, there are broken promises and betrayal from the donor parties in the reconstruction file," he said. "We call on all parties to honor their pledges because the situation in Gaza is catastrophic."

Donor aid is just one component of rescuing the embattled Palestinian economy, and in its report, the World Bank also took aim at Israel.

It said that an Israeli blockade imposed on Gaza after Hamas seized power in 2007, "continues to weigh on the economy". 

It also said that Egypt's closure of its border crossing with Gaza, the main gateway for people moving in and out of the territory, has "further exacerbated the situation".

AMMAN — Jordan faced large pressures in recent years because of the political and security instability in the region, which led to the influx of a large number of Syrian refugees and border closures with Iraq and Syria, Central Bank of Jordan (CBJ) Governor Ziad Fariz said Monday.

Speaking at the 15th International Conference on Sustainability and Competitiveness in Business held at Al Zaytoonah University, Fariz added that these crises led to a severe pressure on the limited economic resources of the Kingdom and its infrastructure besides a sharp drop in exports to Syria and Iraq. 

During the conference, organised by the university's faculty of economics and administrative sciences, Fariz mentioned that the current conditions also affected the influx of the foreign direct investment and the tourist activity in the Kingdom.

He continued that these difficulties heightened risks and shipments costs for both exports and imports, which affected the competitiveness of Jordanian products, especially in 2015. 

Fariz said the central bank is adopting a serious initiative, to be launched soon, aiming to support scientific research that could accurately diagnose problems facing Jordanian economy and come up with applicable technical recommendations in the field of interest to the national economy and decision makers. 

"Sustainability and Competitiveness in Business" as the headlines for the conference this year is a clear indication of coping with modern approaches in developing the business sector and realising the importance of increasing the level of competiveness and sustaining it to achieve comprehensive development, the CBJ governor said. 

DOHA — Saudi Arabia demanded on Sunday that Iran join a global deal on freezing oil output, jeopardising the chances of an agreement between members of Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers that was supposed to prop up the price of crude.

Some 18 countries, including Russia, had been due to meet on Sunday morning in the Qatari capital of Doha to rubber-stamp a deal, in the making since February, to stabilise output at January levels until October 2016.

But the meeting was postponed after OPEC's de facto leader Saudi Arabia told participants it wanted all OPEC members to take part in the freeze, according to OPEC sources.

Riyadh had earlier insisted on excluding Iran from the talks because Tehran had refused to stabilise production, seeking to regain market share after the lifting of Western sanctions against it in January.

After the deal ran into trouble, oil ministers in Doha met with the Qatari Emir Tamim Bin Hamad Al Thani who was instrumental in promoting output stability in recent months.

Following that meeting, a new draft communique emerged containing none of the binding points of the previous outline, sources said.

The document said producers in and outside OPEC should agree to freeze oil production at "an agreeable level" as long as all OPEC countries and major exporting nations participated.

Ministers started talks after 1230 GMT and were still debating the draft almost five hours later, according to sources.

The Saudi and Russian delegations disagreed on the wording, the sources said, dimming the prospects of what would be the first production deal between OPEC and non-OPEC countries in 15 years.

"I am not sure you can call it a freeze," one OPEC source said.

A senior oil industry source said: "The problem now is to come up with something that excludes Iran, makes the Saudis happy and doesn't upset Russia."

Failure to reach a global deal would signal the resumption of a battle for market share between key producers and likely halt a recent recovery in prices.

"If there is no deal today, it will be more than just Iran that Saudi Arabia will be targeting. If there is no freeze, that would directly affect North American production going forward, perhaps something Saudis might like to see," said Natixis oil analyst Abhishek Deshpande.

Supply glut

Brent oil has risen to nearly $45 a barrel, up 60 per cent from January lows, on optimism that a deal would help ease the supply glut that has seen prices sink from levels as high as $115 hit in mid-2014.

Saudi Arabia has taken a tough stance on Iran, the only major OPEC producer to refuse to participate in the freeze.

Deputy Crown Prince Mohammed Bin Salman told Bloomberg that the kingdom could quickly raise production and would restrain its output only if Iran agreed to a freeze.

Iran's Oil Minister Bijan Zanganeh said on Saturday OPEC and non-OPEC should simply accept the reality of Iran's return to the oil market: "If Iran freezes its oil production... it cannot benefit from the lifting of sanctions."

Although a freeze would be a significant step for oil producers, it would have only a limited impact on global supply and the market is unlikely to rebalance before 2017, the International Energy Agency (IEA) said on Thursday. 

According to the IEA, a global oil glut that has hit energy companies hard but meant cheap prices for consumers is set to ease by year's end as US shale production slides.

However, the agency said any production freeze possibly agreed by leading oil producers would only have a "limited" impact on supplies.

The 29-nation IEA said the oil market, which for months has been depressed by a vast oversupply, was expected to practically balance out in the second half of the year.

Prices shot to 2016 highs this week and are now well over $40 a barrel after plummeting below $30 early in the year. They are nevertheless far below the $100-a-barrel mark of mid-2014.

The IEA said in its monthly oil market report that it still anticipates "steady oil demand growth and falling non-OPEC supply", referring to producers outside OPEC.

"This scenario is now taking shape and the oil market looks set to move close to balance in the second half of this year," it said.

"We cannot know the outcome but if there is to be a production freeze, rather than a cut, the impact on physical oil supplies will be limited," said the IEA, which gives advice to countries on energy policy.

It added: "With Saudi Arabia and Russia already producing at or near record rates and very little upside seen apart from Iran... any deal struck will not materially impact the global supply-demand balance during" the first half of 2016.

US shale slide 'gathers pace' 

Analyst Patrick Dennis, of Oxford Economics, also said he saw a "marginal effect" from the Doha meet.

But he said it "should be seen as a first step towards instilling market discipline, unifying OPEC and eventually bringing Iran back into the fold".

All oil producers, including those in the 13-nation OPEC group but also non-OPEC members like Russia, have suffered from the more than 60 per cent drop in oil prices since mid-2014.

The collapse was due to a global glut caused in large part by US shale oil producers flooding the market.

The IEA said it remained confident that in 2016 global oil demand would grow by 1.2 million barrels per day.

India may overtake China as "the main engine of global demand growth", the agency also noted.

On the supply side, the IEA said it saw signs that an expected slide in US shale production "is gathering pace". 

"By early April, the rig count had fallen nearly 80 per cent from the peak seen in October 2014 and more anecdotal evidence is emerging of financial problems taking their toll on the shale pioneers," the IEA said.

Oil surplus declines  

The agency said the global oil surplus is expected to fall to 200,000 barrels per day in the second half of 2016, from 1.5 million in the first six months.

While its demand and supply figures are "highly provisional", the agency warned, it added that "there is no doubt as to the direction of travel for the supply/demand balance".

Meanwhile, the pace of Iran's return to the market after the lifting of sanctions under its nuclear deal with world powers has been "more measured than some expected", the IEA said.

AMMAN — Euromoney Conferences, leading organiser of conferences for cross-border investment and capital markets, announced Sunday in a press statement  that Ziad Fariz, governor of the Central Bank of Jordan (CBJ) and former deputy prime minister and minister of finance, will deliver a keynote address at the upcoming Euromoney Jordan Conference, speaking on behalf of His Majesty King Abdullah.

Returning to Amman on April 25, 2016, the financial conference will be held under the Patronage of His Majesty King Abdullah and co-hosted by the Ministry of Finance. "Other high-profile keynote speakers include Omar Malhas, minister of finance, Imad Fakhoury, mnister of planning and international cooperation, as well as Nemeh Sabbagh, chief executive officer of Arab Bank," the statement said.

Supported by senior lead sponsor, Arab Bank, and co-sponsors, Jordan Kuwait Bank and Standard Chartered, the Euromoney Jordan Conference will bring together 300 financiers, investors, business leaders, entrepreneurs and government officials to address the development of Jordan’s innovation economy.

Addressing Jordan’s role as a regional hub for entrepreneurship, Fariz will speak about the CBJ’s initiatives to support the development of start-ups and small- and medium-sized enterprises (SMEs),as well as their impact on Jordan’s wider economic development.