At the breakfast meeting with Mouvement des Enterprises de France (Medef - Organisation of French Businesses)
16 November 1999
Ladies and Gentlemen,
Thank you very much for your participation and for your interest. I hope that in the next hour we can brief you on some of the developments that have been taking place in Jordan, and perhaps more importantly, on what our future plans are. The Prime Minister, his economic team, the Minister of Foreign Affairs, the Minister of Tourism and the Minister of Water are all here, and I hope that you can make good use of them by asking all the questions that you have on your minds. Also, representative members of the Jordanian private sector are with us today, and I am delighted at the increasing level of co-ordination and trust that is being built between the public and private sectors in Jordan. In order to enhance this improving relationship, I have taken the initiative to bring them together and shall invite all of them later this month to a retreat at the Dead Sea, away from formal deliberations and from the media, where all of us, regardless of titles or ranks, can sit together and discuss as partners in the development of our own country, how we can best achieve sustainable positive economic growth.
I had the privilege of meeting with you last June, when we discussed the necessary measures that needed to be taken in order to encourage investment in Jordan. We discussed then a timetable for privatisation, for amendments to necessary legislation, and for accession to the World Trade Organisation. Almost five months later, I am quite satisfied with what has taken place so far.
Parliament reconvened this summer for an unprecedented second extraordinary session, and enacted legislation designed to ease our impending accession to the World Trade Organisation, including laws for the protection of intellectual property rights. Our WTO negotiating team has been in Geneva for a while, and is currently in the process of finalising all bilateral agreements for accession prior to the Seattle ministerial meeting later this month.
As you well know, accession to the WTO, the coming into force of the Association Agreement with Europe, and the establishment of Qualifying Industrial Zones, are all designed to encourage investments in export oriented manufacturing and services. Parliament ratified in its extraordinary session the Association Agreement with Europe, and we have increased the number of QIZ's to five. We hope that accession to the WTO will pave the ground for additional FTA's to be concluded with other major trade blocs in the world in the not too distant future.
Privatisation was accelerated, and an agreement was reached with a U.S.- led international consortium for the operation of the Aqaba Railway Company. This is estimated at over $100 million in new investments. Forty percent of the Jordan Telecommunications Company is about to be sold to a financial consortium that also includes technical partners. I understand that one of the participants in the bidding process is a French operator, France Telecom. The contract with Suez Lyonnaise des Eaux for the management of the Greater Amman water distribution system has also come into effect. The roadshow for the sale of Royal Jordanian is currently underway, with Paribas acting as the financial advisor, and the bids for the development of Jordan's first 350 megawatt independent power plant are currently being evaluated.
A new sector of our economy has also been identified by a private sector led study as one where an inherent, competitive advantage can turn it into a leading field. The study, known as the REACH Initiative, identifies the number of Jordanian graduates in the information technology field and the competitive labour cost as platforms upon which to build an industry. An enabling legislative environment, attractive government incentives of customs and tax exemptions, and more importantly, a modern telecommunications infrastructure were identified as sufficient conditions for the promotion of Jordan as a destination for IT and software-development multinational companies to come and bring their capital and know-how. We are working on all these requirements and shall host a meeting in January and another one in April of next year for all interested companies.
Additionally, the G-7 Summit held in Cologne last July issued a statement in support of a multilateral action for assisting Jordan in alleviating its debt burden. We are closely working with creditors on a bilateral level in order to agree on mechanisms for debt forgiveness or conversion. We have made considerable progress with France on this issue, and I shall be discussing it with the Prime Minister later on today. I am also visiting Japan early next month and will discuss the alleviation of the burden of the Jordanian debt owed to Japan with officials in Tokyo. Our main purpose is to release funds in the budget allocated for debt servicing to social, educational and health program rather than to investments which are best made by the private sector. On the contrary, we are seeking debt relief in order to make Jordan a more attractive place to invest in. As economists have argued, reducing the debt-to-GDP ratio would necessarily reduce the cost of capital for any investment in Jordan.
What we have done over the past five months is good but it is only a beginning. More work has to be done on promoting the leading sectors in the economy. Recently, we have identified media and broadcasting as possibly another sector for growth and we have to work on that in order for us to be a regional hub. An Aqaba free trade zone is an additional area, which I am convinced, can spur economic growth. Bureaucracy has to be controlled and civil service reform is a must. The privatisation of the electricity company, the deepening of our financial sector, the strengthening of our regulatory frameworks, are all areas that need work in the economic domain. Guaranteeing an independent judiciary is also a main prerequisite for economic stability and investments. We have a long way to go, but we shall do it because we are intent on achieving economic growth that can absorb our growing young labour force and provide all Jordanians with an equal opportunity for prosperity and security.
French companies have been leaders in investing and working in Jordan. In construction, telecommunications, cement, water, tourism, media and other sectors, French companies have been at the forefront. We hope that the new opportunities available in Jordan, the new spirit of optimism related to the peace process, and the excellent and continuously expanding relations between the two governments will help promote further investments in new areas. The Jordan-EU Association Agreement provides an appropriate framework for co-operation through the establishment of a free trade area. We hope that joint ventures between Jordanian and French enterprises can transfer capital, know-how, and management skills to Jordan and promote Jordanian exports to Europe. You can count on my support in all of this, and I am confident that the Prime Minister and his team are eager to help overcome any obstacle that might hinder an investment or block a transaction.
I thank you once again for your attendance from different parts of France. Rania and I are very pleased to have had this occasion to meet and interact with you. We wish you all the best of luck and I hope to see you in Jordan in the not too distant future.