USAID/Jordan’s economic opportunity projects are undertaken in partnership with the Government of Jordan (GOJ), as well as the private sector and NGO community. Through this partnership, USAID/Jordan aims to increase the efficiency and competitiveness of Jordanian private sector, attract more manufacturers through investment, and ultimately create more jobs and higher incomes. The USAID Mission and the Government of Jordan are sensitive to the dangers of creating lopsided economic growth that would benefit only a limited sector of the population. Therefore, efforts in this area include interventions to reach small businesses, as well as improve the social safety net for those Jordanians who due to various limitations are unable to generate a minimum decent standard of living solely through their own efforts.

Challenges

The past few years have seen a dramatic increase in the capacity and desire of private Jordanian businesses to support the government’s efforts to achieve sectoral reforms that balance decreasing government involvement in the market with a more independent and growing private sector. However, there remains much work to do to increase sustainable economic opportunities and facilitate fairer distribution of gains to all Jordanians. Fortunately for Jordan’s prospects for economic growth, there is significant public and private enthusiasm for maintaining the current momentum of reforms, including furthering financial and capital markets reform, commercial law development, support for micro, small, and medium-sized enterprises, public sector restructuring, and information management improvements. In this effort, the private sector must continue to grow as a leading player in transforming local and international investments into productive services and industries. Furthermore, initial reforms in the public sector, particularly those relating to the capital market formation, trade and investment, and institutional restructuring must progress to the next level.

Response

For Jordan, growth and globalization are inextricably linked to its future. Emerging as a competitive player in the global market place is a centerpiece for Jordan’s economic growth. To that end, USAID/Jordan in partnership with the government and private sector will focus considerable efforts on trade capacity building activities in three broad conceptual areas. First is support to trade and investment opportunities. USAID/Jordan has been a strong and consistent supporter of Jordan’s participation in trade negotiations, including WTO accession and U.S.-FTA agreements. This support will continue and will include regional and other international trade market development. Implementing these trade agreements is a second area of assistance that USAID has and will continue to support. WTO and U.S.-FTA standards in such areas as intellectual property require sophisticated technical assistance. Further, Jordan’s ability to capture investment opportunities related to global economic integration is of paramount importance to expanding opportunities for the Kingdom’s citizens. Additionally, USAID will focus on institutional capacity building for the agencies regulating and facilitating trade. Third, USAID/Jordan will ensure that Jordan’s public and private sectors have the ability to respond quickly to trade and investment opportunities. This involves a broad range of support in such areas as legal and regulatory reform, a more efficient financial sector, and a vibrant and competitive private sector. USAID/Jordan will also utilize information and communication technologies (ICT) as cross-cutting tools supporting the Government of Jordan’s economic reform effort.

Strategically, it is also very important to the United States that Jordan prosper and remain a stable partner in the Middle East. To that end, the United States will continue to assist Jordan in tackling three fundamental and mutually reinforcing conditions required to drive economic growth through international trade and foreign and domestic investment. Specifically, USAID’s partnership with the Jordanian government will revolve around continued policy and institutional reform, support for the Government of Jordan’s economic reform agenda, and facilitation of private sector leadership in the economy.

USAID continues to support the development of the Aqaba Special Economic Zone (ASEZ), which is emerging as a model for numerous economic development reforms for the rest of Jordan. This multi-component program includes: institutional development and training of the ASEZ Authority; development of regulatory, customs and revenue systems; planning, infrastructure and private provision of services; investment promotion and facilitation; and business and economic studies and support. This approach is producing important results within the proposed focus areas of this objective, and can serve as a model of good governance and economic reform throughout Jordan.

Highlights

Recent economic performance of GDP growth, 5.0 percent in 2001 and 2002 and 6.9% annualized growth during the first quarter of 2004, was a culmination of many factors, including USAID-assisted efforts by the GOJ to achieve broad-based economic and social sector reforms. Among specific recent efforts, the governments of Jordan and the United States are working to initiate new trade liberalization measures to complement recent trade agreements with the United States and the European Union. They have also worked together to modify Jordan’s taxation structure and initiate pilot projects for customs and tariff changes, privatize several large and politically sensitive state-owned enterprises, adopt new investment and securities laws and amendments to the companies law, be more responsive to citizens through restructuring, rationalization, and information technology modernization, and rein the fiscal and monetary practices.