AMMAN — Prime Minister
Bisher Al-Khasawneh presided over the first meeting for the Steering Committee for the Development of the Legislative Environment on Sunday, which extensively discussed a new law that aims to modernize Jordan’s investment environment to make it more conducive for foreign investors.
اضافة اعلان
Key figures who attended the meeting included the
Minister of Planning Nasser Shraideh,
Minister of Justice Ahmad Zyadat,
Minister of Finance Mohamad Al-Ississ,
Minister of Interior Mazen Faraia,
Minister of Investment Khairy Amr,
Minister of Labor Nayef Steitieh, and Head
of the
Lower House Economy and Investment Committee Khair Abu Salik.
The new law, which is yet to be drafted, will focus
on strengthening pre-existing investments in Jordan, slashing some bureaucratic
procedures in the investment sector which may hinder future progress, as well
as working towards creating a more attractive investment climate for investors
from the Gulf region, and other parts of the world.
Today, there are 44 laws and over 1,800 regulations
that govern the Jordanian investment sector, and one of the main aspects of the
new law, according to Khasawneh, is attempting to consolidate all these
regulations under one common umbrella.
Improving the climate for investors wishing to enter
the Jordanian market can be done in three essential ways, according to the
prime minister. The first method is to establish a single window specifically
meant for licensing and registering businesses and their economic activities;
allowing companies to secure a license within 24 hours.
Second, the law intends to lower production costs
throughout the Kingdom. “This is what the government has worked on through the
new electricity tariff, which will reduce production costs on a number of vital
economic sectors including health, tourism, commercial, agricultural, and
industrial sectors to raise their competitiveness, motivate economic growth,
and create more jobs,” Khasawneh said.
As for the third approach, it basically relates to
eliminating obstacles that are discouraging investment into Jordan, through
legislation.
Jordanian economist Yousef Damra told
Jordan News that “when it comes to bureaucratic challenges in the field of investment, this
might refer to the fact that there are at least 16 regulatory obstacles facing
investors in Jordan, and most of them involve getting numerous approvals from a
range of ministries, like the Ministry of Interior, the Ministry of
Environment, the Ministry of Tourism, the Ministry of Health, as well as having
to go through the Jordan Food and Drug Administration.”
According to Damra, for an attractive investment
climate to exist in Jordan, then investors would not really feel deterred by
Jordanian income tax rates, especially if these stakeholders are benefitting
from high-income margins in Jordan. He added, “an increase in investments can
ameliorate the country’s unemployment troubles since a surge in investments
will inevitably create jobs.”
Economic expert Mohammad Basheer told
Jordan News,
that the main reason behind the reluctance of foreign investors to break into
the Jordanian market over the past few years “is partly a result of the high
costs to enter the Jordanian economy. This refers to both the cost of products
and services in Jordan. One of the main factors behind these high costs is the
effect of the sales tax, which is often imposed on agricultural and industrial
inputs of production.”
Another key
element behind Jordan’s struggle with investments in the recent past, in
Basheer’s view, “is the fact that the interest rates of debts in Jordan are
relatively high, and this applies to the individual level, and the corporate
level, encompassing the main sectors of agriculture, manufacturing, and
services.”
Bahseer said “the combined debts of Jordanian
citizens and businesses is in the ballpark of JD30 billion, and this amount has
an average interest rate ranging between 9 to 10 percent.
Ultimately, this ends up reflecting negatively on local
economic costs.” Any attempt to enhance investment levels into Jordan, will
need to diligently address these factors, he noted.
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