2018: YEAR OF CHANGE

Jordan 2019 | ECONOMY | VIP INTERVIEW

TBY talks to Dr. AbdelMajid A. Al-Rahamneh, Chairman of the Jordan Free and Development Zones Group (JFDZ), on recent successes, the new FTZ at Queen Alia International Airport, and the effects regional events.

What have been the key achievements of JFDZ over the last year?

2018 was the year of a change in enhancing Jordan's free and development zones with a future-oriented outlook. One of our main achievements was the completion of the infrastructure work of the new Airport Free Zone in preparation for its official launch in early 2019. JFDZ won a global bid to host the Middle East Regional Office for World Free Zones Organisation with a view of promoting the pioneering experience and the well-recognized role of the Jordanian free zones in the region promoting world free zones best practices. Looking at development zones, we finalized the necessary infrastructure to launch the Dead Sea Corniche also in early 2019. The Dead Sea Corniche is a dynamic mixed-use neighborhood of hotels, residences, shops, restaurants, and public open spaces at the northern Dead Sea shore. The Ajloun Teleferik bid was launched in 2018 to be implemented in 2019. Both the Dead Sea Corniche and Ajloun Teleferik are expected to enhance the tourism experience, attract local and foreign visitors and investors, as well as provide job opportunities for the local communities. In terms of performance, the occupancy rate of public free zones—Zarqa, Sahab, Mowaqa, Airport, Kerak, and Karamah—registered an average of 84%. In 2017, public free zone imports totaled JOD2.5 billion (USD3.52 billion), while exports registered JOD2.8 billion (USD3.94 billion) for total trade volume of JOD5.3 billion (USD7.47 billion). The total amount of investment in the 37 registered private free zones reached JOD693 million (USD977 million), of which JOD325 million, or nearly 47%, was Jordanian investments, while the total trade of private free zones registered JOD1.3 billion. As for the development zones, JFDZ attracts a wide spectrum of Jordanian, regional, and international investors. The value of investments based on the signed development agreements for developing the Dead Sea Development Zone reached JOD1 billion, providing around 6,000 hotel rooms and no less than 7,500 direct job opportunities in the coming five years.

What is the strategic importance of the new free zone at Queen Alia International Airport for Jordan?

The establishment of the new Airport Free Zone ties into the government's plans to enhance the investment climate in Jordan with the objective of providing a full package of logistics and re-export facilities. The newly established free zone covers 1 million sqm of developed lands, offering world-class infrastructure and a lucrative business environment with administrative and logistics support services. The Airport Free Zone enjoys a vital location, given Jordan's strategic positioning in the heart of the Middle East and the zone's direct access to air cargo services and easy access to major road connections. We are introducing a new model of free zones in Jordan and the Middle East based on competitive advantages and attracting quality investments. The competitive advantage of Queen Alia International Airport Free Zone lies in being a logistics hub for import and re-exports through offering streamlined business operating environment for investors and business owners, as well as providing fiscal and financial incentives, electronic services for transactions, and top-notch free zone facilities and infrastructure networks. Additionally, the zone will provide an unparalleled access to regional and international markets.

What are the targeted investment activities and sectors for the new Airport Free Zone?

The targeted economic activities for the new Airport Free Zone include logistic storage, refrigerated storage, medicines and medical supplies, consumables, precious materials, and heavy goods (timber and spare parts and plastic products) for the commercial sector. As such, the targeted industrial investments will include chemical industries, food, beverage and tobacco, wood industry, machinery and electrical equipment industry, and precious materials industry. In terms of markets, the current investment interests are diversified from the Middle East and GCC countries as well as global investors from the US, Europe, India, and China.

What are JFDZ's investment opportunities at Free and Development Zones?

In order to upgrade Jordan's capabilities as a regional center of re-export, JFDZ is responsible for the development and management of public free zones to develop unique export processing zones and provide more opportunities for both local and foreign investors. The new Airport Free Zone is a great example of our strategy to expand our free zone investment opportunities. This zone represents a new concept of modern free zones providing commercial, industrial and logistic spaces, and introducing smart solutions in a business-friendly environment. JFDZ offers a set of lucrative investment opportunities at the free zones with more diversified investment units at the new Airport Free Zone based on a one stop base services. These investment units include multiple options such as developed investment and commercial units for lease or rent, hangars ready for lease, hangars ready for sale on leased land, and logistic services offices. Additionally, the newly established Airport Free Zone will offer a business park aiming to attract global companies' regional offices, offshore offices, and management offices as well as services for software export, financial consulting, engineering consulting, and training. At the development zones, different and vital investment opportunities are recently launched at the Dead Sea Development Zone ranging from large scale developments to medium and small size tourism projects development. The current prime investment opportunities for the Dead Sea Development Zone are located within the eastern shore and the Corniche. The Dead Sea Development Zone investment opportunities include four- and five-star hotels, resorts, and spas; three-star hotels and boutique hotels; retail and mixed-use developments; and eco-lodges, medical rehabilitation centers, conference centers, and other attractions. Ajloun Development Zone's Sawan site seeks to boost touristic development in Ajloun as the first and largest of its type with much appeal on the local and regional level. The project aims at initiating development with a wide range of activities that include a convention center, hotels, restaurants, cafes, and activities serving the wide range of tourists attracted to the area's natural, cultural, and historical offerings.

What are the main challenges and opportunities for JFDZ?

The major challenge facing Jordan remains to refresh the economy and address the high unemployment rate in the context of a challenging external environment. Regional developments, most especially the Syria and Iraq crises, have resulted in the unprecedented refugee influx, disrupted trade routes, and lower investments and tourism inflows. Continued regional uncertainty and reduced external assistance will continue to put pressure on Jordan. Despite these challenges, Jordan has remained peaceful and maintained continuous security and modernization. Investor confidence in our economy, political stability, excellent international relations, and cost-competitiveness has produced a solid ground for investment. All these efforts have contributed to a momentum of growth and development. The role of JFDZ is to support the government in transforming these challenges into opportunities moving forward. In order to achieve accelerated, export-led growth, Jordan needs to improve its primary infrastructure and the efficiency and effectiveness of public- and private-sector investments. More progress is essential so that reforms aimed at enhancing the investment climate and ease of doing business can lead to tangible outcomes. The introduction of further economic, financial, and legal reforms, and streamlined business practices across every sector to attract innovation and capital is needed. It is critical to continue implementation of key growth-enhancing reforms to reduce the sensitivity to external shocks and help revive the economy. It is important, as well, to create conditions for increased private investment and improved competitiveness to stimulate job-creating growth. As for the free and development zones, our strategy aims to support the national economy through increasing the total investment volume and revenues, while enabling free and development zones as an optimal choice for investment and creating regional investment destinations. We aim to upgrade the level of infrastructure services and operational efficiency of free zones and strengthen security and inventory control. Lifting up the level of the institutional performance and quality of provided services are priorities for JFDZ, thus increasing the level of satisfaction of our clients and investors. JFDZ will continue promoting Jordan's free and development zones as global investment destinations through diverse promotion channels targeting world-class investors as well as tourism and property developers and operators of unique services that will enhance the zones' appeal and long-term development potential.