Friday, March 2, 2012

Jordan: Rising Star of a new Middle East ?



Jordan is a small Arab state, located on the cross roads of the famous holy land. Politically stable & peaceful, has maintained a low profile in a region- marked with Geopolitical Significance as well as Political Turmoil. It does not reflect the extravagance like UAE, nor does it try yield political influence like Qatar- Pygmy known for punching much more than its weight in the region, with the help of cash rich deep pockets & tactically used media apparatus. It’s neither the “Blue Eyed Boy” of the West like Egypt, nor can it exert economic influence like Saudi Arabia. Notwithstanding the low profile Jordan maintains, the Levant state has been upfront in introduction of political, social & economical reforms; coupled with encouragement of an entrepreneurial culture. Slowly but certainly Jordan is getting transformed as a champion of new Middle East. The given “Report” is focused on Jordan & will analyze it with various socio-economic dimensions; its current transformations & the wide future implications it holds for itself & the region.

Economical & Demographical parameters

Fig 1: Jordan’s gdp growth rate vis- a- vis world & mena gdp growth rate.  Source: World Bank

Table 1: shows key economical & demographic parameters for Jordan. Source: World Bank


Jordan: Tourism Statistics

Tourism is one of the key constituent of Jordan’s economy. Jordan has an arsenal of marvelous tourist sites to visit – some of the spellbinding archaeological & historical sites from Babylonian, Greek, Roman & Medieval Era; pristine ecotourism sites & exotic natural landscapes. Biggest attraction being Petra, one of the seven wonders of the world- a city carved out of mountains.    

Fig 2: annual international tourist arrival in millions & tourist receipts in Billions for Jordan, between 2004 & 2010. Source: Nation masters, Jordan Times & UNWTO


A bridgehead between the West & the East, Jordan is also emerging fast as a medical tourism destination. In 2008, 250,000 foreigners from 84 countries have been treated in Jordan. Major arrival comes from Iraq, Palestine, Sudan followed USA, UK & Canada. Jordan’s strength primarily lies in well trained English speaking medical staffs, better health facilities & cost effectiveness. It is estimated to be 25 percent of the cost of comparable treatments in USA, which includes airlines, lodging & sightseeing.

Fig 3: compares number of doctors, nurses, dentists & pharmacists per 10,000 people for- Jordan, Middle East & World. Source: Medical Tourism Magazine   


Jordan: Education System

Unlike its neighbors in the Gulf, Jordan is not blessed with oil reserves. Hence, education & human resource development has been the sole criteria to attain wide scale prosperity, social welfare & higher standard of living. Keeping this in mind, it has put education high up on its agenda. The education system in Jordan aims at providing high standard of learning, based on - universal access, equality & modern information technologies.

Strong steps have also been taken to consolidate Jordan’s excellence in the field of secondary & higher education as well. Some of the key salient features, related to Jordan’s education system are as follows (Source: UNICEF):



·         .Good education facilities have helped Jordan, conclusively transform from an agrarian society to an industrial & urbanized one.
·         Enormous strides have been taken in every level of education- primary, secondary as well as higher. 20.6% of govt. spending goes to education. This had paid off in terms of high, school as well as college enrollments.
·         Jordan has 2000 researchers per million, highest among the 57 OIC (Organization for Islamic Cooperation) countries. The average figure for OIC stands at 500 per million. 
·         In higher education, females outnumber their male counterparts. 42 % of the populations in tertiary age are in tertiary college.


Fig 4: shows R/M (researchers per million) & percentage of female in research for selected countries. Source: UNICEF

Fig 5: shows number of universities against population in millions, for some of the selected Middle East & Mediterranean countries.  

Jordan: Silicon Valley of Middle East?

Jordan is fast emerging as an entrepreneurial hub in the Middle East. Some of the major entrepreneurial success sagas from the region- Maktoob, Jeeran, and Al Bawa etc, all have its origin in Jordan. Touted as “Silicon Valley” of Middle East, Jordan’s emergence as a start-up hub could be attributed to multitudinous factors- vast data & IT infrastructure, skilled & economical work force, open source communities, Govt. initiatives & support, decent internet & high mobile penetration etc. With negligible natural resources in its disposal, an entrepreneurial culture has also some sort of a necessity for Jordan.
Fig 6: country wise number of start- ups registered with yalla start-ups- most comprehensive data base for start-ups in the region.


·         Maktoob:  founded in Jordan in 1998, it was the 1st Arabic E-mail service provider in the region. Acquired by Yahoo in 2009 at US $ 80 millions, it’s presently the official arm of Yahoo in the Middle East region.

·         Jeeran: an internet service company founded in 2000. Commands 650,000 websites, 120,000 blogs & 6 million monthly visitors.

·         Al- Bawaba: is news & media website focused on Middle East.

·         Edufina: a website dedicated to provide updates on universities in Middle East. The website aims at becoming a one- stop shop for all the university related information in the region.

·          Istikana: launched in March 2011, it is an on demand video site. Within 135 days of its inception, it racked up a million visits. Its core competence lies in provision of some old Arab classic videos.  

·          MarkaVip: is an upcoming e-commerce website focused on luxury products. The start- up has successfully pulled in an investment of US $ 2 millions in recently concluded Oasis 500, (a start-up accelerator based in Jordan), angel investments event. 


Successful start-ups also require successful incubators to provide investment & consultation support. Jordan has been upfront in taking initiatives in this direction. One such attempt is Oasis 500, aimed at bringing start-ups & investors on the same platform. Another is Queen Raina Center for Entrepreneurship (QRCE). Established in 2004, so far has incubated more than 25 technology start-ups in Jordan & benefitted around 25,000 people with- boot camps, workshops & networking activities.  

Other than being a pioneer in digital start-ups, Jordan also has vast potential to morph into an outsourcing hub par excellence. It has a vast pool of English speaking work force salaried 75 % lower than UAE & just little bit higher than India- the global outsourcing giant.

Fig 7: shows Jordan’s outsourcing index Vis a Vis, some of the major outsourcing destinations across the world.  Sourcingline.com

Export

In the recent pass Jordan’s trade sector is growing rapidly. In 2011, its overall export is estimated at US $ 8.067 billion with major export partners- USA, Iraq, India, Saudi Arabia etc. Major area of export includes- clothing, fertilizers, chemicals etc. According to “Economy Watch”, an independent think tank, it has signed highest number of free trade agreements across entire Arab world. It has put in place “free trade zones” in partnership with USA & Israel. Qualified Industrial Zones or QIC, as they are known as are aimed to take advantage of free trade agreements between Israel & USA. Produce from these QICs have direct access to American markets, provided they fulfill certain predefined conditions. In 2010, the total textile export to USA, from these free trade zones, jumped to US $ 1.01 billion from a humble US $ 447 million in 2009.

Challenges & the way ahead
Jordan has come a long way from a country once dependent on foreign aids & tourism, to an emerging centre for technology & trade in the region. But it has its own challenges. One of them is high rates of unemployment among youths. Jordan has a very young demographic. It has made commendable progress in higher education, but is running short of jobs to accommodate its college pass outs. Its problems are very much in line with the problems faced by Eastern Europe in the 90s.  In order to contain economical & social problems, stemming out of high rate of unemployment, it needs to hasten up employment opportunities for youth.  

There are other challenges as well. Its neo liberal policies have so far been counterproductive in bridging up the gap between rich & poor. The manifestations of such policies have clashed with the interests of Trans Jordanian- tribes living in the rural parts of the country & often employed in the public sectors. Its policy frameworks, though a step forward, is still not very impressive. In most of the “Ease of doing business” parameters, it shows a very sub-standard performance.

Fig 7: shows Jordan’s rank in various “ease of doing business parameters” for 2012. Source: doingbusiness.com

Jordan is nation, deprived of natural resources. But this has been a blessing in disguise. With lesser natural wealth at its disposable, its focus has been more on intellectual wealth. So far it has made rapid progress in this direction. But the story is still in its making, a lot more needs to be done. Jordan needs to uplift its intellectual wealth to unprecedented heights to transform into a technology, trade & innovation hub of international repute. It should look beyond the obvious- observe some of the biggest success sagas from the East- Singapore, Hong-Kong, Japan etc. Jordan shares a lot of similarities with them- small population, lesser natural resources, political stability & big dreams. It needs to seek inspiration for them.
 


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