AMMAN –– Jordan missed several economic opportunities in 2013 that could have boosted gross domestic product (GDP) growth rate and increased per capita income, economists said recently.
At a seminar held on the last day of 2013 by Al Rai Centre for Studies on Jordan’s economy in terms of current performance and future scenarios, the experts indicated that authorities had failed to promote Jordan as a stable country in a rough neighbourhood to attract foreign and domestic investors.
Economist Jawad Anani said that he expected the economy to expand by at least 4 per cent, describing the 3 per cent GDP growth projected for last year as reasonable due to regional instability.
Anani indicated that per capita income in the Kingdom went down last year as the population of the country increased by nearly 7 per cent, to over half a million people, because of the influx of Syrians.
“The year 2013 could have been a better year for the economy,” he said, adding that the country missed the opportunity to benefit from its stability as the investment environment was not attractive enough.
Several investors left the country while a number of planned projects were delayed, noted Anani, a former Royal Court chief who held several ministerial portfolios. Anani, currently a senator, has also served as the head of the Economic and Social Council (ESC).
He pointed out that officials have also missed the chance to utilise the $5 billion Gulf Cooperation Council (GCC) grant, to be spent for five years, starting 2012, on development projects.
“They spent a long time on identifying the types of projects to be funded by the grant,” he said, adding that the government had failed to best utilise the funds made available by the GCC donors.
“The $5 billion grant should generate another $5 billion in financial returns,” Anani explained.
ESC Chairman Munther Shara agreed with Anani that the investment environment was not attractive over the past year, calling for revisiting investment-related legislation in terms of incentives and entities in charge, with the aim of streamlining the sector.
Blaming slow economic growth on domestic and regional factors, Shara called on the government to direct investments from the Gulf grant to renewable energy projects to bring an end to the Kingdom’s energy crisis.
Studies show that a square metre in the Kingdom’s southern part receives the highest volume of sunshine in the world, he said, stressing the need to implement solar power schemes.
Adli Kandah, a leading banker, said that consecutive governments have failed to identify the sectors that would lead growth in the country.
In the 1960s and 1970s the restaurants sector used to lead growth, over the past two decades the mining, services and hospitality sectors led economic expansion, he explained.
In the coming years, Kandah said renewables and tourism sectors would lead growth in Jordan, “which means that the government should work on securing incentives and financing to these sectors”.
Attending the session was Omar Zu’bi, secretary general of the Finance Ministry, who said that the decline in growth rates from nearly 7 per cent prior to the global financial crisis to an average of 3 per cent over the past four years was not a surprise for policy makers.
“What surprised us is that the slowdown remained for years,” he said, blaming the continuing slowdown on frequent regional crises.
Laith Al Qassem, an analyst and a private sector leader, noted that the large size of the public sector remains a problem hindering economic growth, adding that there is no constant care about the investment environment in the Kingdom.
He stressed the need to invest in the energy field, particularly renewables, as the sector should top the government’s priorities in the medium and long terms.
