Authorities tailor plan to enhance investment

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Jordan Investment Board (JIB) CEO Maen Nsour said the recently released report ranked the Kingdom 101st among 181 countries, down from 94 in the 2008 report.

Emphasising the need to take the report seriously "due to its importance", Nsour said there should be a comprehensive approach to tackle factors affecting the country's performance in the report.

The 2009 report, prepared by the International Finance Corporation affiliated to the World Bank Group, measures 10 performances in the 181 polled countries including starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Jordan's performance dropped in nine factors, except for starting up a business as the Kingdom improved by six positions in this indicator in the 2009 report compared to last year's. In addition, three new countries were in the 2009 report, which covered the period April 2007 to June 2008.

Nsour said the drop in several indicators prompted the concerned authorities to draw up a plan to improve Jordan's performance.

On the short term, the suggested reform detailed by the plan includes measures to address the drop in trading across borders through reducing documents and time to import and export. This can be done by cutting the number of documents and allowing for pre-arrival customs clearance, according to the plan, which in the long run seeks to reduce time to import and export by introducing a single window for lodgement of customs-related documents and reducing inspection time.

With regard to getting credit, the plan aims in the long term to increase the scope and breadth of credit information by considering the creation of a private bureau, ensuring that full historical data of two years or more is distributed and guaranteeing borrowers' right by law to verify their own data, Nsour said.

"The success of the plan depends on the commitment of these institutions and the empowerment of the one-stop shop at the JIB. The one-stop shop must be fully activated; otherwise, it will not be able to fulfil its mission," said Nsour.

In the interview, Nsour stressed that in addition to the Doing Business Report, investors wishing to start businesses in Jordan also need to look at the findings of the Globalisation Index for the year 2007, which ranked the Kingdom 9th at the global level and 1st among the Arab countries. The index measured economic, personal, technological and political integration in 72 countries.

Jordan's track record also includes the 8th place out of 141 countries in inward investment performance in 2006, according to the World Investment Report issued by the United Nations Conference on Trade and Development (UNCTAD), advancing from 19th place in 2005, Nsour noted.

In the inward Foreign Direct Investment (FDI) measured by UNCTAD's report, Jordan ranked among front-running countries between 2000-2006, including countries such as Ireland, China, Malaysia, Spain, Finland, the UK, Belgium, Bahrain, the UAE, Singapore, Hong Kong and Qatar among others.

Although the 2009 Doing Business Report itself indicates that there are shortcomings and limitations in the methodology, it should not be underestimated and must be taken seriously, Nsour said.

The report indicates that there are five limitations in the report's methodology that should be taken into account when interpreting the data, the official explained.

According to the report, the collected data refer to business in the largest city and may not be representative of regulations in other parts of the economy.

In addition, the data often focus on a specific business form - generally a limited liability company or its legal equivalent of a specific size and may not be representative of the regulation on other businesses, said Nsour, citing the report, which listed a number of other limitations.

The plan designed to enhance Jordan's status in the report was the outcome of a joint effort by the JIB, along with ministries of industry and trade, planning and international cooperation, labour, justice, Income and Sales Tax Department and others.

By Mohammad Ghazal

© Jordan Times 2008