In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
The Jordanian economy has benefited from massive investment by the Gulf countries which increased from 74 million USD in 2002 to 3.1 billion USD in 2006. However, due to the international crisis in 2011, FDI has declined to 1.5 billion USD, a trend that has been maintained in 2012 and 2013. In order to boost these flows, the government has planned large-scale infrastructure projects (water, transportation, nuclear energy) for which it needs foreign and private funds. Jordan is trying to become a regional logistical crossroads, notably for electric and transport networks.
Investments are mainly concentrated in the field of real estate (residential and commercial), in financial services and in large tourism projects. The process of current programs of investment such as industrial projects, real estate and infrastructures, mainly financed by direct foreign investment, support the economic activity. Nevertheless, the restrictions on foreign credit and the loss of investor confidence could again limit the new influx of foreign direct investment in 2014, notably in the real estate sector. In 2013 the FDI influx totalled over USD 1.4 billion.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Jordan||Middle East & North Africa||United States||Germany|
|Index of Transaction Transparency*||5.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||4.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||4.0||9.0||5.0|
|Index of Investor Protection****||4.3||5.0||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||1,474||1,497||1,798|
|FDI Stock (million USD)||23,372||24,869||26,668|
|Performance Index*, Ranking on 181 Economies||30||-||-|
|Potential Index**, Ranking on 177 Economies||94||-||-|
|Number of Greenfield Investments***||31||23||16|
|FDI Inwards (in % of GFCF****)||23.6||18.0||19.7|
|FDI Stock (in % of GDP)||81.0||80.4||78.8|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
The country is politically stable. Its geographical location is also an important asset. The agreements signed by the country have given Jordan access to more than a billion potential consumers.
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Last Updates: October 2014