Stakeholders discuss grim pandemic numbers, economic recovery

1 UNDP (1)N
Representatives and stakeholders discuss the Jordanian economy and the road to recovery at a UNDP event on Wednesday. (Photo: The UNDP’s Facebook page)
AMMAN — Jordan needs JD300 million to support the private sector and combat unemployment, the Minister of Planning and International Cooperation Nasser Sharaideh said on Wednesday.اضافة اعلان

During a UN Talk on “Building Forward Better — Supporting Enterprise Resilience and Economic Recovery,” Sharaideh said that “the tourism industry alone needs another JD150 million to bring it back to where it used to be in 2019.”

The session, cohosted by the UNDP, UN Jordan, and the Jordan Economic Forum (JEF), along with the Ministry of Planning and the World Bank, addressed the UN Socio-Economic Framework in response to COVID-19.

“Our theme ‘building forward better’ is not about getting back to normal or getting back to where we were, but it is building on what we have now learned on the vulnerabilities and lack of resilience and finding a way to do things better tomorrow,” said Anders Pedersen UN resident coordinator and humanitarian coordinator in Jordan.

'Challenges to Jordanian businesses'
“As the secretary-general repeatedly says, the ‘COVID-19 pandemic eradicated more than 30 years of development globally over a period of no more than 15 months,” Pedersen said.

Pedersen pointed out that “in a country with 60 percent of the population under the age of 30, we have an unemployment rate of above 50 percent.”

From a socio-economic side, Pedersen stated that with “only 14 percent of women in the labor force,” they are among the most vulnerable and the most affected by the pandemic.

According to him, “this is not only a question about the right of equality but also about the lost opportunity to engage women who would drive forward and make Jordan the prosperous country we would like to see.”

World Bank resident representative, Holly Benner, seconded UN’s findings saying that the World Bank has also found “a decrease in the share of females among permanent full-time workers.”

For women's inclusiveness, Benner highlighted how “the private and especially the SME (small and medium-sized enterprises) sector may potentially work as an engine of employment for youth and women participation.”

Speaking on unemployment, Mazen Homoud, the deputy chairman of the JEF and former ambassador to the UK, underscored that unemployment rates were consistently increasing even before COVID-19. 

According to statistics, unemployment rates reached 25 percent in the first quarter of 2021, compared to 19 percent in 2019; the additional 6 percent represents some 120,000 jobless due to the pandemic, said Sharaideh.

The UNDP Senior Economic Adviser Michaela Prokop, also shared a report that presented the Impact of COVID-19 on Jordanian Enterprises.

The survey, which was conducted in April 2020 and February/March of 2021 with a focus on micro and smaller enterprises, showed that 90 percent of enterprises have not benefited from the government response and support measures stemming from COVID-19.

Large and medium-sized enterprises received more support, compared to smaller businesses, Prokop said.

According to Prokop, the most severe economic effect on enterprises included reduced sales, liquidity issues, and loss of revenue, with 60 percent of enterprises struggling to meet their rent, wages, and social security payments.
As for the impact on employees, the study showed that “around 50 percent of enterprises in the tourism sector have laid off at least one employee.”

In terms of resilience, the UNDP report estimated that more than half of enterprises have not taken coping measures, and that smaller enterprises have been less able to adapt and introduce such measures.

Surprisingly, the report showed that only 3 percent of enterprises are introducing e-commerce or other platforms or considering new products, which raises concerns over resilience, Prokop said.

The report also illustrated that enterprises are pessimistic about economic recovery, given that only “one in four enterprises trust their economic resilience and feel confident about coming through pandemic as profitable and resilient businesses,” Prokop added. 

‘Endeavors to reform and recover’

In response, Minister Sharaideh said that was not surprised by many of UN report’s findings.

“Although Jordan has adopted strict measures since the onset of the pandemic, which includes complete lockdown for at least 60 days as well as partial lockdown and curfews, the government has started since early July to gradually reopen all sectors, which will be completed by September,” Sharaideh said.

The minister also shed light on how Defense Order No. 6 has contributed to job preservation.

“I am surprised by the findings that say some employees were forcibly laid off. Such enforcement clearly violates the defense order,” Sharaideh said.

He also pointed out the difference between the formal private sector and the informal private sector, which small and micro-sized enterprises tend fall under.

As for protective measures for the formal private sector, Sharaideh said that “through the ‘Estidama’ program, the government preserved around 130,000” vulnerable jobs opportunities and paid wages to workers affected by the lockdowns.

The “Estidama” program, (sustainability in English), was launched December 2020 and is extended until the end of December 2021 in a bid to protect jobs amid the pandemic.

As for those who lost their jobs in the informal private sector, the government issued the “Takaful-3” program, (solidarity in English), to help 160,000 households that were impacted by the crisis, Sharaideh said.

The ministry has also taken steps to support SMEs, Sharaideh said, adding that the Ministry of Planning worked with the Arabic Fund to get around $1 million to small and micro enterprises.

Sharaideh said that although the economy was forecast to contract by about 3 percent in 2020, Jordan saw a 1.6 percent economic recession. 

UNDP Jordan Resident Representative Sara Ferrer Olivella said that figuring out the problems and blind spots is the way to move forward, stressing that micro and SMEs in Jordan need more support.

According to Olivella, the support includes free-of-charge e-commerce and digital platforms, reskilling and up-skilling of existing businesses, recovery-seeking managerial practices, and incentivized inclusiveness in the formal economy. 

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