Ammon News - By Yusuf Mansur

Reform efforts seem to be addressing many aspects of the economy and making improvements, albeit at a varying pace, everywhere. However, at least one sector in Jordan has to reach a critical mass in terms of quantity and quality (a cluster of interrelated investments that flourish globally through competing and complementary entities). To do this, a mindset change is warranted.

What did Dubai, Singapore and Ireland have in common? Starting from near nothing, they all managed to a critical mass in one industry or another that led the world in terms of sophistication and spearheaded development throughout the economy.

Dubai did it in services and real estate development because it was and remains in the midst of the GCC, a region where expatriates were not allowed to own their companies or purchase real estate and citizens suffered from red tape and bureaucratic shackles.

Dubai did an impressive job in turning insurmountable challenges into opportunities; the lack of labour meant inviting the best workers of the world to come and build; a small landmass led to reclaiming the sea and marketing some of the most expensive real estate in the world; flat landscapes meant building the world’s tallest towers; hot weather meant building the world’s second longest artificial, snow-covered skiing slope.

So successful was the model that it became the envy of the world. Such has become the significance of this once tagged “small bankrupt sand emirate” that financial tremors swept world markets when Dubai was shown to be heavily in debt a few months ago.

The world financial scare rebounded when Dubai’s Khalifa Tower, the tallest building in the world, opened with a remarkable display of resilience and fanfare, and its troubles took a backseat. Today, and in spite of the recent difficulties, AT Kearny, the consulting firm, ranked Dubai among the best 11 investment friendly countries in the world.

Singapore is another story. Wedged between socialism and capitalism and having a small landmass, it succeeded by leveraging its very location (the challenge became an advantage). It became an international banking and commercial services hub. The small landmass and the regional conflicts did not seem to matter in the end.

Ireland, once the poorest in West Europe and renowned for its hardworking, good-natured workforce which had immigrated in caravans of misery everywhere (at one time Dublin had less Irish than New York City), managed to become a software and financial centre for Europe. Ireland’s citizens became, two years ago, the highest wage earners in the continent.

In all these success stories, the will of a nation was shown to overcome its impoverishment in terms of natural resources. A competitive mindset that was successfully communicated throughout the economy and among all stakeholders turned the challenge of scarcity into opportunities for creativity and excellence.

The three countries had champions who stuck with it, stayed the course for decades, made improvements everywhere but focused on creating a critical mass in one type of production, allowed competition among megaprojects, shied away from giving monopoly licences to investors to quick successes, and adopted best practices faster than their peers.

The lesson to be learned: make improvements everywhere in Jordan; find a champion to protect and encourage a sector to critical mass; and coordinate all policies to help grow competing and supporting entities in the sector.

For example, we should never think that one exhibit centre is enough, we need several; four mobile companies are not enough, we need more to keep the competition vigorous; 25 banks are not enough, we need more to break monopolies and force mergers; 50 or 100 shopping malls are not enough, some will exit and newer ones force greater competition, better prices and/or more sophistication. No number of anything is enough.

The market can always be expanded, whether in quality or quantity, or both. Competition means entry and exit, birth and death, survival of the fittest, lower prices, higher quality, greater pay to workers and higher profits. Competition means a more wealthy economy and nation.

Modernity requires stability and never telling the private sector what to do, but what not to do. And champions, trusting a system that rewards the doers and punishes the ones who do less, should shoot for the stars and beyond, not accept the status quo.

All this should be achieved by a leadership that moves with the people and improves their institutions, not by moving alone.

ymansur@enconsult.com

(Jordan times)