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Country watch: Jordan

 
 

Date: 05.01.2004

 
  Categories: country information, competition, Jordan  
 

Table of Contents :: General Information :: IT sector :: Important Links ::

 
 

General Information

 
 

Location:

Jordan is located in the heart of the Middle East, Northwest of Saudi Arabia, south of Syria, Southwest of Iraq, and east of Israel and the Occupied West Bank. Jordan has access to the Red Sea via the port city of Aqaba, located at the northern end of the Gulf of Aqaba.

Population:

5.16 million

Area:

Total: 89,213 sq. km (34, 445 sq. miles) Land: 88,884 sq. km (34, 318 sq. miles)

Water: 329 sq. km (127 sq. miles)

Capital:

Amman (1.9 million / 38% of total population)

Currency:

Jordanian Dinar, The rate of exchange is 1 JD = 1.42 US $.

Languages:

Arabic is the official language, but English is widely spoken

Time:

GMT + 2 (in winter, +3 in summer), or 7 hours ahead of US Eastern Standard Time. Summer time is from April through September.

Climate and geography:

Jordan has a combination of Mediterranean and arid desert climates, with Mediterranean climates prevailing in the north and west of the country, while the majority of the country is desert. Generally, the country has warm, dry summers and mild, wet winters, with annual average temperatures ranging from 12 to 25 C (54 to 77 F) and summertime highs reaching the 40s (105-115 F) in the desert regions. Rainfall averages vary from 50mm (1.97 inches) annually in the desert to as much as 800 mm (31.5 inches) in the northern hills, some of which falls as snow.

Government:

The Hashemite Kingdom of Jordan is a constitutional monarchy with representative government. The reigning monarch, His Majesty King Abdullah II, is the Head of State, the Chief Executive and the Commander-in-Chief of the Armed forces. The king exercises his executive authority through the Prime Minister and the Council of Ministers, or Cabinet. The cabinet is responsible before the elected House of Deputies which, along with the House of Notables (Senate), constitutes the legislative branch of the government. The judicial branch is an independent branch of the government. Since 1989, all elements of the Jordanian political spectrum have embarked together on a road to greater democracy, liberalization and consensus building. These reforms, which were guided by the late King Hussein, have placed Jordan on an irreversible road to democratization. The result has been greater empowerment and involvement of everyday citizens in Jordan's civic life, contributing to increased stability and institutionalization which will benefit the country far into the future.

Economy:

Since His Majesty King Abdullah II assumed the throne in 1999, Jordan has embarked on some broad economic reforms in a long-term effort to improve living standards. The Jordanian government has worked closely with the IMF, practiced careful monetary policy, and made significant progress with privatization. The government also has liberalized the trade regime sufficiently in order to guarantee Jordan's membership in the Word Trade Organization (2000), an association agreement with the European Union (2000), and a Free Trade Agreement with the United States (2000). Jordan has also signed a Bilateral Investment Treaty with the United States.

Labor force:

1.26 million

GDP:

purchasing power parity - $22.8 billion (2002 est.)

GDP growth:

3.5% (2002 est.)

Main exports:

: Phosphates, potash, fertilizers, chemicals & pharmaceuticals

Main imports:

Crude oil, wheat, sugar, meat, machinery, transport equipment & spare parts

 
 

The IT sector in Jordan

 
 

The Information Technology Association – Jordan (int@j)

Mission

The mission of int@j (the Information Technology Association of Jordan), a voluntary non-profit, private organization is to effectively represent, promote, and advance the Jordanian software and IT services industry in the global market.

Objectives

The new IT Association is the focal point for all Jordanian IT industry-related activities. The Association is open to all value added IT related, software development and support enterprises. It proposes to fulfill its mission through the following objectives:

Advocate industry issues - represent IT industry interests and lobby with government and international groups; propose national initiatives and conduct public relations efforts.

Promote industry investment opportunities in Jordan - promote Venture Capital (VC) and Initial Public Offerings (IPOs); form relationships with local export-oriented groups; represent the industry at conferences and trade shows; set up databases and publicize membership through websites, newsletters, hyperlinks, promotional materials and advertising.

Provide industry research and market information- conduct market studies; disseminate local, regional and international opportunities; provide market trends.

Effect standardization, certification and quality control in the IT industry -promote certification bodies and their value addition; enforce an IT industry code of ethics; standardize employment contracts and benefit packages.

Support human resource development - work with educational institutions to focus on critical skills; strengthen ties with local universities and collaborate with overseas universities; and initiate industry programs to benefit university students.

Advance industry intellectual property rights - certify IPR compliance; update members in IPR law changes; and work towards local IPR regulations conducive to IT industry growth.

Form international IT industry alliances - actively seek alliances with global players; develop and attract venture capital funds; and disseminate success stories.

Manage industry stakeholder relations and resolve industry conflicts - build and reinforce bridges among association Members; and between association Members and government, media, universities, NGOs and donors.

Why Jordan?

The Hashemite Kingdom of Jordan is an Arab country uniquely situated at the crossroads of the three continents: Asia, Africa and Europe. Connecting East to West, Jordan has been a key trading post in the Middle East for centuries. Nowadays, it blends a rich culture and heritage along with being the fastest growing and most modern amongst all countries of the region.

The Jordan ICT Forum. On the right His Majesty King Abdullah II. Source: INTAJ

Under the leadership and guidance of His Majesty King Abdullah II, Jordan is well on the way to becoming the hub of information technology in the region. It has adopted the overall goals of developing an intellectually competitive ICT industry, one that attracts both foreign and local investments, generates high value jobs and produces substantial levels of export.What Jordan lacks in natural resources, it makes up for in its strong leadership, internal stability, educated technical human resources, open-minded and enthusiastic private sector and an overall good infrastructure, all of which give Jordan a more competitive edge.

Today, Jordan is positioned among the more attractive investment sites in the Middle East.

According to a study by the Stanford Research Institute, 'Jordan's overall score in the commercial policy matrix is 77%, the highest in the Region, which represents an attractive and "Business Friendly" policy environment.

REACH Initiative

REACH is a national strategy for Jordan to develop a vibrant, export-oriented ICT services sector; paving the way for Jordan to become a regional leader and internationally recognized exporter of ICT products and services.

This comprehensive framework embraces actions in:

Regulatory Framework

Enabling Environment (Infrastructure)

Advancement Programs

Capital & Finance

Human Resource Development

for the purpose of developing an internationally competitive ICT industry in Jordan, one that can successfully attract foreign and local investments, generate high value jobs and produce substantial levels of exports.

The strategy is to be led by the private sector, in partnership with the Government, for the ultimate purpose of positioning Jordan favorably within the knowledge-based economy of the future. It focuses on the software and ICT services sector in particular since this sector comprises one of the most dynamic and fastest-growing parts of the ICT industry due to:

Low start-up capital requirements

Jordan’s favorable position in the regional market

Human resource intensity

Not affected by distance or transportation constrains

REACH initiative has the following objectives:

Increase ICT Exports

Create ICT related jobs

Attract Foreign Direct Investment

The benefits of accelerated growth in the ICT sector will not be limited to economic gains. The social benefits will include an empowered population, improved public services, and better education for all Jordanians. Strategic benefits include greater efficiency of government, creation of a knowledge-based economy, enhanced economic competitiveness, and less dependence on traditional markets.

ICT Industry Statistics

In 2002, private sector ICT firms employed around 8,000 persons in Jordan, 4,690 (58.6%) of which held technical positions. On average, a single ICT company in Jordan employed 34 employees (3 in managerial positions, 5 in administrative, 6 in marketing and 20 in technical positions (with 50% of the companies employing 13 persons or less for technical positions).

The total revenues generated from ICT services, software and hardware in 2002 amounted to approximately $228.5 million in 2002. Total domestic revenue was an estimated $188.5 million, while export revenue for ICT companies reached about $40 million in 2002. Only 7.5% of companies exporting their ICT services in 2002 did not offer services in the domestic market. 35% of companies offering their services in the domestic market did not export to outside markets.

Domestic Sales

22% of Jordan’s ICT companies were involved in hardware sales and generated nearly 30% of the domestic revenue in 2002. Another 35% of the companies offered complete software development services but generated only 11% of the domestic revenue. Very few companies offered ICT consulting services or specialized in system design and analysis exclusively. Internet-based services and Internet service provision generated only 7% of the domestic revenue.

Export

Nearly 40% of the ICT companies exported full software application development services and generated nearly one-third of the export revenues in 2002. ICT Strategy Development came in second, generating nearly 11% of Jordan’s ICT export revenue. Outsourcing/Distinct code writing was the most commonly reported ICT service offered in Jordan, and 12.6% of companies exported this service. Exports of ICT services, software and hardware in the Education Sector represented around 28% of total exported value in 2002.

42% of Jordanian companies surveyed exported to the United Arab Emirates, with revenue from sales to the UAE 34% of total export revenue. Saudi Arabia comes in as the second biggest export market for Jordan in terms of revenue. Nearly 39% of companies exported to Saudi-Arabia, and their exports generated more than $9.2 million, representing around 23% of the total exported value in 2002. Exports to Arab countries constituted nearly 85% of the total export revenue of ICT services, while exports to the USA comprised only 8% of the total revenue in 2002.

Jordan ICT Strengths

Jordan is on the road to becoming an ICT success story. By acting on the strategy outlined in the REACH Initiative, and most importantly by implementing the detailed action plan in a committed and comprehensive fashion, Jordan’s leaders – both in the private and public sectors – will play instrumental roles in strengthening the country and creating a limitless world of opportunities for generations to come.

Jordan's principal advantages with respect to the ICT industry include:

Highly educated and skilled workforce

Strong private-public partnership and government support

Modern Legislative Environment

Adequate infrastructure

Important Links

Information Technology Association – Jordan (int@j)

The REACH Initiative

Jordan ICT Forum

Ministry of Information and Communications Technology

Ministry of Industry and Trade

Ministry of Planning

Ministry of Education

Jordan Investment Board

Telecommunications Regulatory Commission (TRC)

Jordan United States Free Trade Agreement

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