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Jordan still facing red tape challenges as investment-friendly environment |
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Jordan still facing red tape challenges as investment-friendly environment
Jordan ranked 80th out of 178 countries rated in order of the favourability of their business environments, an evaluation that received varying reactions from experts and officials.
The study was conducted by the International Finance Corporation (IFC), which is affiliated with the World Bank.
Leading economist Fahed Fanek cast doubt on the accuracy of the survey’s methodology, while a senior official said more needs to be done to further improve the image of Jordan as an investment-friendly environment.
"The result is unfitting to Jordan's reforms and capabilities,” Fanek told The Jordan Times. “We are supposed to be number 25 or 20. The indicators used are unsatisfactory. This is a limited and unscientific poll.”
He added: "Jordan has done all that it takes to facilitate the investment climate,” explaining that the country has conducted a wide range of reforms that were received with applause by the International Monetary Fund and the World Bank.
According to the survey, Jordan ranked 6th in the Middle East and North Africa region, preceded by the UAE, Oman, Kuwait, Israel and Saudi Arabia, which was the top performer in the region.
Jordan was also the second highest ranked non-Gulf Cooperation Council state in the region, according to a press release received by The Jordan Times.
Jordan ranked 78th in the previous edition of the survey, but dropped two places in the 2008 Doing Business report, which included three additional countries: Luxembourg, Brunei and Liberia, the press release indicated.
About Jordan’s apparent slide in the rankings, Jordan Investment Board CEO Maan Nsour explained that Luxembourg and Brunei ranked in places higher than Jordan.
“This means that with the inclusion of these countries, Jordan kept the same standing, which should not be satisfactory," the official said.
"This is a very important report,” Nsour told The Jordan Times yesterday. “It should be taken seriously and practical legislative, administrative and procedural steps should be taken by all concerned entities, either in the public or the private sector so we can upgrade Jordan's capabilities in facilitating doing business.
“Everything required should be done quickly because this has reflections on the business environment and the national economy," Nsour said.
The 2008 survey indicated that Jordan improved services with its one-stop shop for business start-up, consolidating company, tax and chamber of commerce registration. This reduced the number of separate procedures needed to start a business from 11 to 10, and the time involved from 18 days to 14, according to the report.
However, the study indicated that reforms are still needed in areas of starting a business, registering property, protecting investors and enforcing contracts.
To start a business, Jordan was 133rd out of 173 countries surveyed in the IFC report. Jordan has one of the highest minimum start-up capital requirements in the world, amounting to 795 per cent of the nation’s income per capita.
In terms of registering property, Jordan ranked 109th out of 178 countries. The cost of registering property in the Kingdom is among the highest in the region, and amounts to 10 per cent of the property’s value.
Hania Dawood, a member of the Doing Business team, said in the press release: "Some of the major challenges that remain in the business environment in many Middle Eastern countries, including Jordan, are in such areas as minority shareholder protections and court efficiency.”
According to the report, Jordan ranked 107th in investor protection and 128th in ease of enforcing contracts. The time, cost and procedures to enforce a contract in Jordan are lengthy and cumbersome.
It takes 689 days to resolve a simple commercial dispute in Jordan and costs 31.2 per cent of the claim compared with 211 days and a cost of 14.5 per cent of the claim in Hong Kong, ranked as the world's best in enforcing contracts. |
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