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To help Jordan’s textile and apparel industry expand

Hamzeh
Hamzeh S. Al-Alayani is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters. (File photo: Jordan News)
Textiles play a big part in the Jordanian culture. Throughout history, Jordanians have used textiles in architecture, as we see in bedouin tents, in furniture, products, and clothing. Textiles are an essential part of the culture and identity of a place, reflecting its history, lifestyle, economy, and values. اضافة اعلان

The garment sector in Jordan began to take off in 1996 with the signing of the qualifying industrial zones  agreement with the US. Under it, Jordanian manufacturers were given tariff- and quota-free access to the US market.

Jordan’s textile and apparel industry is relatively small compared with that of significant exporters. Still, it is a vital engine for the national economy, contributing about 27.5 percent of the total exports in 2019 and 8.1 percent of GDP, according to the Ministry of Industry Trade, and Supply.

World Bank textiles trade statistics indicate that China and Germany have the maximum market share, with $264 billion worth of exports, representing 33.69 percent each. Italy has a $37 billion export share of 4.69 percent, India has a $36.5 billion export market percentage of 4.67 percent, and Vietnam has a $32 billion export sector contribution of 4.06 percent. In comparison, Jordan textile exports are worth $1.66 billion from 176 factories and satellite units operated by 76,000 workers, of whom almost 30 percent are Jordanians (according to Jordan Garments, Accessories and Textiles Exporter’s Association.

Jordan has achieved a certain level of growth and momentum already, and it is now time to leapfrog to the next level of development. Jordan’s Economic Modernization Vision said that by 2033, Jordan will be able to increase its share to 3–4 times the current export, which will give the much-needed momentum to touch the $5.2 billion mark by 2033, which will create 150,000 more jobs.

The Jordanian apparel industry must focus on vertical integration to increase its scale and size, and benefit from the production linked incentive scheme. The apparel and garment industry is not very investment centric, but it is crucial from an employment point of view. The demand for textiles continues to be robust, and the sustainability of this industry is a function of local needs, resource availability, and external markets.
… Jordan textile exports are worth $1.66 billion from 176 factories and satellite units operated by 76,000 workers, of whom almost 30 percent are Jordanians…
Jordan needs to support domestic designer brands and become a place for international brands to produce in. A booming local fashion designer scene is emerging already. The domestic high-end fashion industry may be in its infancy compared to established markets. Still, branded products represent the most value-added line of the industry and are an area that manufacturers could more aggressively pursue.

Jordan has achieved great success in mitigating the critical lack of skilled workforce in the industry by implementing the integrated skill development scheme. This should be expanded to create robust human resources for the country’s textile sector through a multi-pronged approach involving attracting workforce through various channels, including incentivizing them sufficiently and providing financial assistance to individual factories engaged in worker training. Even workers and mid-level management already employed in the sector will need to get reskilled and upskilled as part of the growth strategy.

Environmental, social, and governance (ESG) commitments are a top priority for Jordan. The kingdom has taken the lead in focusing on reducing or balancing its carbon footprint. A critical part of the ESG initiatives is responsible sourcing and farming, which spans regenerative organic agriculture and eco-friendly textiles creation and packaging. Therefore, there are great opportunities to transit the entire textile and garment industry’s operations to net zero carbon footprint.

The Apparel Impact Institute announced a $250 million Fashion Climate Fund to tackle fashion’s carbon emissions by identifying, funding, scaling, and measuring verified impact solutions in fashion industry supply chains.

For brands, ambitious climate targets are pipe dreams without impact reduction in their supply chains. Simultaneously, impact fund investors are seeking opportunities to invest in the growth of the green energy sector.

From a shareholder perspective, supply chain resilience and climate risk mitigation must now be quantified alongside all other fiduciary risks–expanding brands’ ESG data collection and analysis to stave off supply chain disasters.

Countries, including Jordan, have witnessed significant expansion in their textile markets in recent years. As China transitions to a service-based economy and labor costs rise, it is reasonable to predict that many garment manufacturers will relocate to underdeveloped countries where production cost is cheap and plentiful.


The writer is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters.


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