Jordan has no proper mechanism for measuring total foreign direct investment (FDI), alleged critics at the Jordan Vision 2020 conference, on Tuesday, February 7. While organizers promote FDI as “key to economic growth,” according to conference documentation, well-placed sources from within financial and investment circles blame bureaucratic backlog and a decentralized system for channelling investment through different avenues and not revealing the full picture.
His Majesty King Abdullah is extensively quoted by organizers on the importance of FDI: “We are going to do the best we can to create a healthy investment atmosphere in Jordan,” reads an excerpt from a speech at the US Centre for Strategic and International Studies, from May, 1999. Measuring foreign investment is the hinge upon which the Vision 2020 depends and is the barometer of success or failure, however it is not an easy figure to calculate.
While requesting anonymity, sources allege FDI accounting mechanisms are not in place to properly measure this crucial indicator of economic health. “The Jordan Investment Board (JIB) doesn't have the manpower or resources to do such a job,” explained the source adding, “not all investment goes through the JIB and as a result, FDI figures are underrepresented in JIB quotes. Foreign investment deals often pass through other avenues, leaving the JIB out of the equation.
Speaking at the 2020 Vision conference, Reem Badran, JIB director, announced that according to her figures, JD793 million was invested in Jordan last year. “It is most important to identify foreign investors,” said Badran stressing it as a “key objective.” But another critic from the investment community commented, “good things are being accomplished, but there is a lack of cohesion, “there are unclear criteria to measure FDI.” Badran, in an interview with the Jordan Times, agreed with the statement.
“FDI is a problem in many countries because there is no good base to calculate the figure,” she said adding, “organizations use general estimates.” “This is an issue we need to address in Jordan as part of a national effort to arrive at FDI,” she said. “We need a solid number so we know all the details behind it and can defend our findings.” Currently, there are international standards based on organizations like the International Monetary Fund (IMF), says Badran.
She also admits that the JIB initially thought it could calculate this on its own but explains it is an exercise which must involve the Department of Statistics, Central Bank, Royal Information Centre, Ministry of Trade and Industry as well as the Ministry of Planning. Added to the task is the fact that the Qualified Industrial Zones (QIZ) and the Aqaba Special Economic Zone (SEZ) compile their own accountings of FDI. “JIB does have a project in the pipeline to arrive at FDI ... it will be difficult, but once we have the criteria and training we will be able to calculate the figure,” said Badran. Sources reveal that currently published figures on FDI are “outdated by three years, while spreadsheets are two years old.”
The problem it seems, comes from processing the backlog of handwritten surveys. “Really, the proper way is the scientific way, with agreed upon standards where we can compare apples to apples,” she concluded. Critics agree pointing out, “it's important to track FDI, is it paying off, is it being applied in the right places? It's a marketing tool and the JIB needs it to promote their efforts in government. It is also needed for IMF and World Bank statistics to justify their money.” JIB is currently involved in an image make-over launching a new logo, an advertising campaign, magazines, a website (jordaninvestment.com) as they continue their aim to “enhance the investment environment in Jordan,” said Badran. — ( Jordan Times )
By Owen Clegg
© 2001 Mena Report (www.menareport.com)
