Winter in the tech oasis

How the new cybercrime law could cast a chilling effect

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(File photo: Ameer Khalifeh/Jordan News)
Last week I, along with several other people, wrote about the new cybercrime bill currently under review. Defenders of the cybercrime law focused on defamation and hate speech and its critics focused on limiting freedom of speech. One aspect which has not been covered in detail is the economic consequences of the cybercrime law - specifically on the tech environment. Over a decade ago Jordan was identified as an emerging tech hub. Several pieces gave predictions of the future of Jordan’s IT sector and how it will emerge as a regional tech hub. Zooming years later to this summer, we should evaluate what we are risking.اضافة اعلان

Three things you should knowJordan's ICT sector has been growing since a number of government initiatives are supporting its development. The Information and Communications Technology Association of Jordan (int@j) advocates for tech sector policies. Jordan’s Ministry of Digital Economy works on strategies to enhance digital infrastructure and e-government services. The Queen Rania Center for Entrepreneurship (QRCE) supports startups with mentorship and funding opportunities. The Jordan Investment Commission (JIC) attracts foreign investment to the ICT industry. All these efforts, especially those supporting human capital development, position Jordan as a hub for technology and innovation in the region, driving economic growth and digital transformation.

To an extent, the investment has paid off. Out of all tech entrepreneurs in the Middle East 27 percent are Jordanian. Abu Dhabi and the Jordanian Ministry of Digital Economy and Entrepreneurship launched a $100 million tech fund. As of September 2021, Jordan's Information Technology (IT) sector made up around 12 percent of the country's GDP (for comparison, tourism was 14 percent that year). The government's focus on e-government initiatives and increasing internet and mobile penetration rates have further supported the sector's development. Also, the ICT infrastructure of Jordan is one of the most reliable in the region. Jordan has widely available, stable internet connectivity, with a stable and reliable energy sector. This focus of government support, growing human capital, and infrastructure make Jordan an ideal environment as a regional ICT hub.

How the law affects the tech ecosystem
The law's provisions could deter startups and entrepreneurs from pursuing innovative ideas due to the fear of unintentional violations. This could also discourage venture capitalists from investing in early-stage tech companies.
This lack of predictability hinders the growth of a dynamic, competitive private sector.
Additionally, defamation and false news can lead to content censorship, leading to hefty penalties and resulting in an environment of self-censorship heavy-handed content moderation of information and online discussions.

The new cybercrime law can also affect e-commerce and fundraising would add complexity and bureaucratic hurdles for businesses, potentially deterring both local and foreign participation in online trade.

How it will affect Jordan’s investment potential overall
While the updated law is still under review, so far there has not been discussion of balancing cybersecurity objectives with an investor-friendly environment.  Policymakers should consider the law's consequences and create an enabling environment for technology-driven growth in the country.

The new cybercrime law could have significant implications for tech investment in the country. For example, the provisions related to unauthorized access, data manipulation, and content regulation could lead to investor risk aversion, funding constraints for startups, an uncertain legal landscape, and potential impact on venture capital. Of these, the uncertain legal environment is the most harmful. The lack of clear definitions in the law has been brought up by media advocates looking at freedom of speech, but investors are looking for predictability and stability. Vague definitions could scare away cautious investors looking to avoid potential legal liabilities and uncertainties.

Unpredictability in Jordan’s ICT market existed before this law’s update. Consider this OECD report which stated, “This lack of predictability hinders the growth of a dynamic, competitive private sector.” Global examples have shown that countries with stringent cybercrime laws often experience reduced foreign investment and venture capital funding for tech projects. We’ve seen this happen in Russia with the introduction of the "Yarovaya Law" in 2016 and China's Cybersecurity Law which was enacted in 2017.

My take
Despite the action plan outlined in REACH2025, progress has been frustratingly slow since the 2016 MENA ICT forum concluded. One glaring issue stands out: the absence of a well-defined Cyber strategy.  For us to guarantee that more companies want to be in Jordan, we need to have clear policies and clear legal definitions to provide predictability in the market - otherwise we limit our investment (and don’t forget domestic entrepreneurship!).

Ambiguity does not attract investment. Countries with substantial IT markets, comparable to Jordan's aspirations, also have cybercrime laws. But these are meticulously crafted legal frameworks complete with explicit definitions, transparent processes, and well-defined appeal mechanisms. These predictable (the key word) structures instill confidence in investors and provide them with the reassurance they need to participate actively in the digital economy.

What if a private company offers white hat hacking services? What if a security analyst, is unsure if legally they can use a VPN to access certain sites for research? Without clear legal guidelines, professionals are left to speculate, unsure of whether their actions could potentially lead to legal repercussions. Researchers face similar hurdles, as access to essential information becomes restricted due to unclear regulations. So, if this isn’t clear in the law, then we just have to wait until the courts decide on a case-by-case basis what is allowed and not allowed?

The key to attracting more companies to invest in Jordan lies in offering clear and coherent policies and legal definitions that ensure predictability within the market. In their absence, potential investors are understandably apprehensive about placing their resources in a climate of ambiguity. In the digital realm, uncertainty breeds hesitation, and hesitation stifles investment.

In Jordan we have strong infrastructure and a growing pool of skilled human capital. The immense potential has already yielded impressive success stories, demonstrating a real capacity for growth and innovation. Our neighbors (Syria, Lebanon, Iraq, Palestine) do not have our stability and we can attract their talent here. All this presents a golden opportunity for Jordan to position itself as a regional leader in the digital economy, provided it can effectively harness its resources.

These cybercrimes are real and require action from the state. Blackmail, fraud, cyberbullying, online harassment, and child exploitation are on the rise globally, and Jordan is no exception. Addressing these challenges head-on is essential for fostering a safe and secure digital environment. However, we must also be careful not to worsen the situation with overarching and vague concepts that may offer law enforcement and courts excessive discretion but create unpredictability for potential investors.

Big corporations have shown interest in Jordan - such as Amazon, Webhelp, and Microsoft among others. In Aqaba, particularly with the Google subsea cable, we have a chance in putting Jordan’s name in emerging tech hubs in the region. But for us to be able to do that we must create an environment that attracts talent and capital. 

Jordan's journey towards becoming a digital economy powerhouse requires immediate action on clear and comprehensive cyber policies. This law has murky sections which are open to interpretation. ‘Open to interpretation’ also equals risk for investors. It needs clarity and definitions. We are already at risk of losing the edge we have in the tech scene because of other market forces (taxation, regulation, global trends, regional competition). With a transparent legal framework that ensures predictability, Jordan can leverage its resources and establish itself as a leading player, and we can start by taking a step back to revise this current law.

This article was originally published on the SubStack Full Spectrum Jordan.

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