Ammon News - AMMONNEWS - A new partnership between Jordan and the international community has been established with the aim of supporting Jordan's economic plans and reform agenda and help it transition to a more competitive and productive economy, according to the final statement of the London Initiative 2019 conference.

The statement emphasized the government's efforts to achieve growth and economic transformation and outlined five basic principles proposed by Jordan to define the framework of its partnership with the international community to achieve economic growth.

The London conference adopted Jordan's five-year track for growth, investment, employment and self-reliance.

Following is the full text of the statement:

On 28 February 2019, the Rt. Honourable Theresa May MP, Prime Minister of the United Kingdom, and His Majesty King Abdullah II of the Hashemite Kingdom of Jordan hosted Jordan Growth and Opportunity: The London Initiative 2019 a new initiative designed to lay the foundations to unlock growth, jobs and investment for Jordan. The Initiative marks the start of a new partnership approach between Jordan and the international community in pursuit of Jordan’s sustainable growth and self-reliance. The conference brought together senior government officials, distinguished members of multilateral development and financial organizations and civil society, and high-level investors and business people from over 60 countries and international organisations to help support Jordan transition to a more productive, competitive and equitable economy for the benefit of all those who live there.

From Resilience to Growth: Towards Economic Transformation

Throughout all the years of conflict in the Middle East, Jordan has played a vital role in promoting regional stability and moderation, as well as supporting the international effort to counter terrorism and extremism. Furthermore, Jordan is contributing a global public good by continuing to host and support significant numbers of refugees. Jordan’s long-term economic sustainability is critically important to the international community.

Prudent policy has kept Jordan’s economy remarkably resilient to significant external shocks. Jordan has been implementing macro-economic and fiscal adjustment equalling around 14% of GDP, in line with Jordan’s Extended Fund Facility arrangement with the IMF. Jordan has also intensive reform efforts, mainly directed to improving the business and investment environment. As his Excellency Prime Minster Razzaz said in his key note speech, historically, Jordan has faced regional shocks one after another, yet Jordan has done and will continue to do everything in its power to develop by doing good for Jordan and others in our region and our partners around the world.

The time is now right for a renewed focus on growth and economic transformation. About 75% of the Arabic content on the internet is generated in Jordan, extraordinary for a country of Jordan’s size. With ongoing economic growth reform, the re-opening of the border with Iraq and an uptick in sectors such as tourism and a promising start-up scene there is a real sense of optimism.

Jordan is in an ideal position to benefit from a future full of emerging opportunities. Jordan is a powerhouse of talented, aspiring young people – 68% of Jordan’s population are below the age of 30 and full of aspirations.

Jordan has set out a credible vision – and detailed agenda – to achieve economic transformation. HM King Abdullah II articulated in his speech an inspiring vision of a self-reliant, prosperous and inclusive country. HM’s vision focuses on economic transformation: moving to private-sector growth powered by Jordan’s highly-educated young population moving into jobs in high-end service exports and entrepreneurialism. This is a shift in focus to future-proofed sectors such as professional and business services, logistics, technology and tourism, along with improving education quality to power the economy of tomorrow. This vision is anchored on three main pillars that define the London Initiative; robust reforms to stimulate inclusive growth and job creation, especially for women; measures to improve macroeconomic and fiscal stability; and an enabling business environment to attract investments.

The London Initiative is a five-year pathway to unlocking growth, investment and jobs for Jordan, designed by Jordan. The focus is squarely on implementation. It includes three areas where Jordan and the international community can partner together in support of lasting change, a set of implementation principles to guide delivery, and a follow-up mechanism to ensure commitments are fulfilled.

Pillar I: Robust and realistic reforms to stimulate growth: The Government of Jordan set out its strategy for the coming five years through launching the Growth and Reform Matrix; which comprises a set of sequenced and prioritized structural reforms over the coming five years.

The implementation of the reforms within the matrix has already started. Over the last twelve months, Jordan has made significant progress in implementing these reforms, including those that will unlock new opportunities for business.

The Government of Jordan committed to continuing the reform process as per the Five-Year Matrix, with a direct focus on improving the business environment, reducing business costs, improving regulatory predictability and promoting investments and exports. Furthermore, the Government of Jordan committed to creating the optimal enabling environment for youth and women to be an essential component of the growth process.

The international community commended Jordan’s recent reforms to eliminating all forms of gender discrimination from the Labour Law; making it mandatory for employers to provide childcare services to mothers and fathers alike; introducing a flexible work (part-time) scheme to allow for greater participation of youth and women; endorsing codes of conducts to ensure the safety of the workplace and public transportation.

The international community recognizes the substantial effort by the Government of Jordan, and agrees that implementation of the Matrix is a priority area of support. Development partners have launched a variety of technical assistance modalities to support Jordan to implement the matrix including a WB/UK Trust Fund and US support to a new instrument which will help implement the Matrix/ list international commitments.

Youth, women and refugees – A delegation of Jordanian youth leaders and young entrepreneurs participated in the conference. They advocated for an economic transformation that creates private sector jobs. Jordan’s youth entrepreneurs demonstrated they are role models for young people themselves generating jobs and growth. The Government of Jordan has set out ambitious commitments for women’s employment. These include goals to increase women’s labour market participation by 5% by 2025, to ensure working women have affordable childcare and more childcare jobs for women, and to reach the very poorest women through social safety nets.

Pillar II: Debt sustainability calls for international support to achieve it. Jordan needs increased financing to assuage medium-term risks to its macroeconomic stability; but also to allow the fiscal space needed to invest in growth. The Government of Jordan presented a comprehensive medium-term financing strategy that moves its debt to a sustainable footing. The international community agreed that external financing must move to more sustainable modalities and clearly linked to implementation of reform.

Pillar III: Attracting private sector investment in key commercial opportunities. The private sector will be the engine of long-term growth for Jordan. Jordan is committed to creating new opportunities for business through ambitious investment climate reform. The Government of Jordan announced the creation of a new Projects Pipeline Development Facility with a pipeline of 120 investment opportunities in strategic growth sectors over the coming 20 years, including 26 for 2019 alone. Substantive focal sessions were held to unlock opportunities in strategic growth sectors in tourism, professional services and technology and entrepreneurism.

A new Partnership between the International Community and Jordan

The international community needs to back this effort to make it a success. The key to unlocking growth in Jordan is successful implementation of the Government’s plans for reform. The challenge is significant, and economic transformation will be disruptive and will take time. For this economic transformation to become a reality, Jordan will need the support of the international and regional stakeholders to better target and coordinate their support for economic reform, to enable Jordan to stable macro-economic environment for those reforms to mature.

Principles for engagement: The initiative is framed by 5 key principles that Jordan proposes to frame its partnership with the international community to deliver economic growth and sustainability:

i. Jordan is committed to achieve economic transformation. The Government of Jordan is fully committed to continuing and reinforcing its macroeconomic and fiscal reform program in partnership with the IMF. It is also committed to implementing the reforms set out in the Five-Year Growth and Reform Matrix, to achieve inclusive and sustainable growth and creating jobs for Jordanians. Furthermore, Jordan is committed to achieve its vision in close partnership with the private sector.
ii. Economic growth is a priority area for support. Growth is the only long-term term way of mitigating economic risks, and supporting the prosperity of all Jordanians and refugees in Jordan. Bilateral, multilateral, NGO and private sector implementing agencies should look to significantly enhance their work on growth, creating stable conditions for reforms to mature and actively crowding in the private sector.
iii. International partners should better align assistance behind Jordan’s priorities. The most effective support from international partners will be to align their economic support behind Jordan’s Five-Year Growth and Reform Matrix and Debt Financing Strategy.

iv. Transition to long-term and sustainable assistance strategies, including actively crowding in the private sector. International partners should look to transition to more long-term and sustainable assistance strategies, including through grants, concessional financing and loan guarantees.

v. Expanding partnerships. Support to Jordan should go beyond financial aid to increased technical assistance through government-to-government and business-to-business technical exchanges, and through more favourable policy (e.g. by extending/expanding trade concessions), and by fostering new partnerships with the private sector, third sector, global financial centres, and sovereign wealth funds.

Clear and Efficient Follow-up Mechanism

The Government of Jordan has created a robust governance structure to implement its reform plan. A Reform Secretariat was established to track progress and report to the Ministerial Economic Team chaired by the Prime Minister.

The Initiative launched a clear follow-up mechanism to ensure that commitments in London are delivered: the Jordan Task Force. This will be a joint effort between UK, Jordan, donors, private sector, civil society and IFIs and be jointly chaired by the Government of Jordan and by the United Kingdom. The committee will convene every six months to review outcomes and provide advice and suggestions as needed (e.g. in areas where activity had stalled or where progress could be expedited) to maximise the impact on Jordan’s growth. As a sub-objective, the group would also act as a regular staging post for communicating progress against reform initiatives, and real-world impact, to the wider international business community and Jordanian population. On the private sector, the UK and Jordan will work closely together to follow-up with the business interest that was raised in London in order to turn this interest into investment in the medium-term.