AMMAN — Jordan
is losing its battle to attract foreign and local investment due to a decline
in its ranking in the 2022 Global Competitiveness Index, where it fell seven
places to 56 globally, down from 49 in 2021.
اضافة اعلان
The report,
issued by the Swiss-based International Institute for Management Development,
showed that Jordan ranked fifth in the Arab world after the UAE, Qatar, Saudi
Arabia, and Bahrain this year.
The Kingdom
advanced one step on the economic performance axis to rank 62nd globally. But
it slipped on two main axes, as it fell nine places in government efficiency and
12 in business efficiency.
The report
revealed Jordan’s main economic challenges in 2021. They include the “high
unemployment rates and energy costs,” in addition to “regional instability and
hosting a large number of refugees, which pose challenges to the stability of
economic growth.” It also pointed to finance issues, considering the high
levels of public debt.
Among the
indicators that showed improvement in the competitiveness report is access to
finance (68.9 percent), policy stability and predictability (58.3 percent), a
skilled workforce (55.3 percent), and an effective legal environment (43.7
percent).
Others included
a high level of education (41.7 percent), a business-friendly environment (39.8
percent), reliable infrastructure (34 percent), effective labor relations (30.1
percent), and cost competitiveness (25.2 percent).
Economic analyst
Mazen Irsheid told
Jordan News that the result of the 2022 Global
Competitiveness Index report was excepted since Jordan is recovering from the
repercussions of the COVID-19 pandemic.
But he explained
that the report “is essential to every country because it is one of the main
factors that would attract foreign investments”.
“The high energy
costs would always lead to increased investment and production costs, so in the
case of Jordan, profits would be higher in other countries in the region that
ranked higher,” he added.
Irsheid agreed with the report that there are areas
of improvement, like in the renewable energy sector and. He noted that the
improvement is prolonged, compared to other countries like Morocco, adding that
Jordan still imports 90 percent of its energy needs.
As for the GPD,
Irsheid said there is a slight improvement in exports, where they are
increasing, but the tourism sector is still not recovering and is still under
the rates that it was before the pandemic.
“We hope the
tourism sector will improve in the second half of the year,” he said. “Soon, we
will see the results of the Jordanian-Iraqi free economic zone and the opening
back to the Syrian market ... where the commerce exchange will improve, but
this will take some time,” he added.
Irsheid said
that Jordan’s ranking in the index could only be improved if the unemployment
rate decreased, foreign investments increased, and the economy grew.
“But this will
not be achieved by the end of this year since inflation is rising,” he
predicted.
Economist Wajdi
Al-Makhamreh told
Jordan News that the report showed that Jordan is not
an attractive country for investors and business people in view of its
declining competitiveness.
Makhamreh
attributed the receded ranking to “the bureaucracy infesting the Kingdom, in
addition to the weak investment system, transportation sector, and the lack of
accountability”.
“This doesn’t
encourage any foreign or local investors to do business in Jordan, but they
will be looking towards other countries with higher competitive markets,” he
said.
“This is a bad
indicator, and the government should follow through,” he added.
Makhamreh
commented on the government’s efficiency indicator in the index, saying that
despite its effort to reform the public sector and solve its issues, it scored
low on government efficiency.
But he noted
that some good indicators in the index, like access to finance, where many
people can find funding for their projects, political stability, skilled force,
and good education.
“The decline in
the index points to the need of a lot of work so we can become a competitive
market,” he said. “Now, we have the economic modernization vision, whose main
purpose is to attract investment;”
He said if the
report’s “indicators did not improve, there will be massive challenges in the
path of the economic vision in the next 10 years,” Makhamreh added.
Economist Yousef
Al-Damra agreed with Makhamreh and Irsheid on the importance of the report in
attracting new investors, saying it allows the government to review its
performance.
Damra is
optimistic about next year’s ranking, and he expects that if the government
implements the economic modernization vision, Jordan will be able to seize a
higher rank and attract investments.
He said that
according to the government efficiency indicator, Jordan is going backward,
instead of moving forward as a result of bureaucracy.
Darma maintained
that the index did not take new challenges into consideration, such as the
impact of the Russian-Ukrainian conflict on Jordan and the region.
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