Investment draft is good step forward, but lacking

Lower House  Parliament
The Lower House in session. (Photo: Ameer Khalifeh/Jordan News)
AMMAN — Amendments in a draft bill regulating the investment environment are a good step forward, but insufficient to lure a flow of capital into the Kingdom, pundits contended.اضافة اعلان

They said the amendments still left the door open for bureaucracy, nepotism, and red tape and failed to offer clear incentives for local and foreign investors.

Last Saturday, the Lower House/Economic and Investment Committee, along with the government’s economic team, approved the amendments in the draft regulating the investment environment for the year 2022.

Committee head Khair Abu Sailek said that the committee approved the draft after a meticulous review of all its articles and consultation with various experts in the sector. He lauded the changes, saying additional incentives were offered to businessmen wishing to set up shop outside the industrial free zones across the Kingdom.

Yusuf Mansur, a former minister of economic affairs, said that the amendments fell short of achieving the purpose, specifically to look appealing to investors. He also insisted that the amended draft law is still vague.

Nevertheless, Mansur added that there are some improvements in the draft, such as Article 10, which increased the exemption period for economic activities to five years, instead of three, from the starting date of the operation.

“But, they are still missing the point,” Mansur said, referring to shortcomings in the draft’s incentives.

He said that increasing the exemption period to five years iwill be ineffective in attracting investors to less developed zones in the Kingdom, “simply because they have nothing. They will not find a quality of life there, so investors will gravitate to Amman as usual.”

“It has not worked in the past, so it will not work now,” Mansur added.

Tariq Hijazi, director-general of the Jordanian Businessmen Association, said that his group was grateful for taking part in meetings to amend the draft. He noted that 80 percent of its recommendations were taken into account.

He said that it would be comforting to the investors to increase the exemption to five years, up from three. “Whatever will come in the regulations will be according to the investor’s expectations,” he said.

He cited other incentives offered to investors, such as a 30-percent reduction in income tax offered to business opening in less developed areas across the Kingdom. That, according to Hijazi, is a positive commitment by the government.

He said other welcome developments in the draft include the addition of the minister of entrepreneurship to the investment council, and an increase in the number of women participating in the workforce, calling the changes a significant step forward.

Hijazi said that the amendments are starting to become positive. “I hope they will continue on this path to produce a modern law that will allow us to compete with neighboring countries,” he proclaimed.

But Hijazi noted that the current amendments did not fully reflect His Majesty King Abdullah’s recommendations and aspirations under the Royally-sponsored economic modernization vision.  

Majdi Hashlamoun, president and chairman of the Investors Association, said the draft contains many upgrades that are in the interest of investors.

“We cannot call them strengths or weaknesses,” he told Jordan News, adding that there “is always room for modernization and development.”

Economist Mazen Irsheid said the addition of banning any personal benefits for the members of the incentives committee is a positive step. But the concept of an incentives committee is still negative because the whole point is to decrease the investment process and bureaucracy, which is still not achieved.

He said that the incentives should be clear and included in the law so every investor is aware of what he would be receiving from the start.

Irsheid pointed out a semi-positive change like increasing the exemption period for economic activities to five years, but noted that the incentive in general remains unclear.

 Another positive step, Irsheid added, is the benefits and incentives added to every region in the kingdom, not only in specific development zones, where businesses will include a minimum number of women in the workforce — which never existed previously.

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