Prospects of Economic Synergies:Jordan, Morocco and the GCCOctober 30th 2011Ikaraam Ullah                Prospects of Econ...
Outline     Introduction     GCC Convergence Criteria     Synergies         Labour force         Goods and Services  ...
Introduction• In May 2011, the Gulf Cooperation Council (GCC) announced the bid towelcome Jordan and Morocco to join the c...
Convergence
GCC Convergence                           Criterion              GCC range     Jordan   Morocco                    less th...
Labour Force
Labour force participation    Percentage of labour force         100                                                      ...
Labour force participation    Percentage of labour force         100                                                      ...
Labour force participation    Percentage of labour force         100                                                      ...
Labour force participation    Percentage of labour force         100                                                      ...
Expansion of GCC Labour Force                          Population                  Labour Force           Est. Unemployed ...
Education Profile of Available Labour                                                               % of unemployed       ...
Competitiveness Rankings, 2011                               Pay and                 Innovation          Global           ...
Moroccan Trade
Moroccan Trade, 2010    US $bn                                                                                         US ...
Moroccan Trade, 2010    Imports (US$bn)    Other       8    country    benefits    7                6                5    ...
Moroccan Trade, 2010    Imports (US$bn)                                                                   Diversification ...
Diversification of product   Moroccan Imports                          Imports from GCC                                   ...
Diversification of product   Moroccan Exports                                                                             ...
Morocco: Trade Costs vs. OECD averages                                         Morocco                   GCC   OECD      C...
Moroccan Investment
Morocco: GDP growth and unemployment      %                                                                             Ar...
Morocco: Inflation and Exchange Rates                                                                                     ...
Morocco: External debt position      % of GDP                                                                             ...
Morocco: Foreign Direct Investment    US $bn                                                                              ...
Moroccan Foreign Direct Investment, 2009   European Union                          63%     France                         ...
Morocco: Agriculture•Recently created Agency for Agricultural Development (ADA) overseesthe implementation of Green Morocc...
Morocco: Agro-Industries Summary• Agricultural sector employs over 4 million people• About 100,000 in agro-industry.• Comp...
Renewable Energy & the EU-MENA SupergridUS$ 555 bnSource: Trans-Mediterranean Renewable Energy Cooperation (TREC)         ...
Morocco Solar Energy MasterplanKey facts• Abundant solar resources (a potential of 2 600kWh/m²/year)• Target: 14% of elect...
Morocco Solar Energy Masterplan Regulation & Funding• Sector regulated under the Renewable Energy Law (No. 13-09)which aim...
Morocco Solar Energy Stakeholders Agencies• Energy Investment Corporation (EIS) was established in 2010 witha capital of o...
Jordanian Trade
Jordanian Trade, 2010    US $bn                                                                   Integrated into GCC   US...
Jordanian Trade, 2010    Jordanaian    Imports (US$m)            2,500            2,000            1,500            1,000 ...
Jordanian Trade, 2010    Jordanaian    Imports (US$m)            2,500                             China            2,000 ...
Diversification of product imports   Jordan Imports                                                                       ...
Diversification of product exports   Jordan Exports  US$ 1.2bn                                                            ...
Jordan: Trade Costs vs. OECD averages                                            Jordan                 GCC       OECD    ...
Jordanian Investment
Jordan: GDP growth and unemployment      %       Falling unemployment                                                  Ara...
Jordan: Inflation and Exchange Rates                                                                                      ...
Jordan: External debt position      % of GDP                                                                            % ...
Jordan: Foreign Direct Investment    US $bn                                                                               ...
Jordan ICT sector• Int@j (Information Technology Association-Jordan) has beenpromoting the sector over a decade.• More tha...
Online Content and GamingEarly Success                            Page 45
Education in Jordan Curriculum and collaboration• Growing services industry driving qualification initiatives. Jordan isam...
Outlook Risks
EU and US growth correlation (1990-2009)        United States              0.6                                            ...
GCC and Asia growth correlation (1990-2009)        GCC              0.6                                                   ...
Summary
Benefits to the GCC                                Benefits to the GCC?Investment- ICT (Jordan)   creative & content drive...
Post-Oil GCC   Scale of investment    1,400   Large                                                             • Flexible...
Post-Oil GCC   Scale of investment    1,400   Large                                                             • Flexible...
Post-Oil GCC   Scale of investment    1,400   Large                                                              • Flexibl...
Post-Oil GCC   Scale of investment    1,400   Large                                                              • Flexibl...
Conclusion ‘Take aways’Jordan and Morocco ‘success stories’: sound economicmanagement, unemployment is falling steadily.Am...
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Economic Synergies between Morocco, Jordan and the GCC

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GCC Expansion: The Case for Morocco and Jordan
The presentation examines envisioned bilateral economic benefits of Moroccan and Jordanian membership to the GCC. An economic integration exercise not only benefits Jordan and Morocco, but also diversifies the GCC’s overall transition to post-oil economic foundations.

Benefits to the existing GCC members could be enhanced by leveraging the respective strengths these countries have. In Morocco’s case, they are its proximity to and close economic relationship with Europe and the US; abundant natural resources; stable macroeconomic conditions and relatively low-cost skilled labour. Although Jordan’s population is considerably smaller, it is more amenable to leveraging its skills in ICT, education and knowledge-based industries.

The majority of Morocco’s trade is tied geographically to Europe. The lion’s share of its trade with the GCC is dominated by downstream petroleum products while a large portion of Morocco’s exports to the GCC are associated with precious stones. Meanwhile, trade in Jordan is tied to the United States,China and India – large and rapidly growing markets. Jordan also imports a significant amount of petrochemical products from the GCC. Whilst there could be room for improving and diversifying the GCC-Morocco trade dynamic, the presentation instead argues to leverage Morocco’s long-established relationship with Europe in parallel. Jordan-GCC trade is significantly stronger, but that does not inhibit making use of Jordan’s FTA channel with the United States and EFTA with Europe.

The economic benefits of membership for Morocco, Jordan and the GCC could improve in other dimensions too. In the case of labour relations, GCC integration yields a smoother transition of surplus young skilled labour force to work in the GCC. The GCC also benefits from better knowledge transfer from the Maghreb and Levant experience in specific areas of strategic GCC investment such as solar power. Furthermore, the GCC’s long-run food production diversification to water-rich countries could also benefit from including Morocco in their respective national food security strategies.

Aside from the global slowdown, Morocco and Jordan have exhibited strong economic performance over the last decade. Both have sound productivity and innovation rankings. With educations systems crafted to further increase their potential, the presentation argues that they are well positioned to complement and strengthen post-oil diversity in the GCC economies.

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Economic Synergies between Morocco, Jordan and the GCC

  1. 1. Prospects of Economic Synergies:Jordan, Morocco and the GCCOctober 30th 2011Ikaraam Ullah Prospects of Economic Synergies: Jordan, Morocco and the GCC, October 30th 2011 Page 0
  2. 2. Outline Introduction GCC Convergence Criteria Synergies  Labour force  Goods and Services  Investment synergies Concluding remarks Page 1
  3. 3. Introduction• In May 2011, the Gulf Cooperation Council (GCC) announced the bid towelcome Jordan and Morocco to join the council.• Short-term need to create opportunities across the region.• Long-term need to develop non-oil sector to diversify away fromhydrocarbons.• Post-oil: High dependency GCC budget dependence (~80%) on finitehydrocarbon resources which are vulnerable to price shocks• GCC and Morocco/Jordan share economic synergies that lead tomutually beneficial goals. Page 2
  4. 4. Convergence
  5. 5. GCC Convergence Criterion GCC range Jordan Morocco less than 60% of 5.5% (Oman) Public debt 62.2% 50.0% GDP 32% (Bahrain) Budget less than 3% of 12% (Kuwait) 8.9% 6.3% deficit GDP -1.5% (UAE) Inflation no higher than -2.4% (Qatar) 5.2% 1.2% rate weighted average 5.3% (KSA) Interest +2% of lowest ave. 1.2% (Kuwait) 4.5% 3.5% rate three +2% 3.2% (UAE) Foreign more than 4 8.4 6.5 reserves months import coverSources: Dubai Chamber based on data from IMF Page 4
  6. 6. Labour Force
  7. 7. Labour force participation Percentage of labour force 100 Size of circle indicates relative value of sector Very important 80 Key Morocco Jordan 60 GCC 40 20 Very Important 0 0 20 40 60 80 100 Contribution to GDPSource: Dubai Chamber based on data from IMF and World Bank Page 6
  8. 8. Labour force participation Percentage of labour force 100 Size of circle indicates relative value of sector Very important 80 Key Services Morocco Jordan 60 GCC Agriculture 40 Industry 20 Very Important 0 0 20 40 60 80 100 Contribution to GDPSource: Dubai Chamber based on data from IMF and World Bank Page 7
  9. 9. Labour force participation Percentage of labour force 100 Size of circle indicates relative value of sector Very important 80 Key Services Morocco Jordan 60 GCC Agriculture 40 Industry 20 Very Important 0 0 20 40 60 80 100 Contribution to GDPSource: Dubai Chamber based on data from IMF and World Bank Page 8
  10. 10. Labour force participation Percentage of labour force 100 Size of circle indicates relative value of sector Very important 80 Key Services Morocco Jordan 60 GCC Agriculture 40 Industry 20 Very Important 0 0 20 40 60 80 100 Contribution to GDPSource: Dubai Chamber based on data from IMF and World Bank Page 9
  11. 11. Expansion of GCC Labour Force Population Labour Force Est. Unemployed (millions) (millions) (actual) Jordan 6.1 1.7 200,000 Morocco 31.9 11.6 1,100,000 GCC 42.1 16.2GCC 48 – 80 18 – 30EnlargedAdding ...Jordan increases GCC labour force by ~10% Morocco increases GCC labour force by ~72% both countries increases GCC labour force by 82%Source: IMF and World Bank estimates, ILO and Dept. of Statistics (Jordan) Page 10
  12. 12. Education Profile of Available Labour % of unemployed 0 10 20 30 40 50 Bachelor & Above Jordan Intermediate Diploma ~ 200,000 Secondary Less than secondary ICT &services? No schooling Bachelor & Above Morocco Intermediate Diploma ~ 1,100,000 Secondary Less than Secondary No schooling Agriculture? 0 10 20 30 40 50 % of unemployed Source: Dept. of Statistics, Jordan & ILO Page 11
  13. 13. Competitiveness Rankings, 2011 Pay and Innovation Global Productivity Index Poland 45 57 46 Turkey 75 58 61 Tunisia 81 43 40 Romania 55 99 64 Jordan 72 70 good 71 Morocco 37 productive 79 73Source: World Economic Forum, Global Competitiveness Report 2011 Page 12
  14. 14. Moroccan Trade
  15. 15. Moroccan Trade, 2010 US $bn US $bn 18 18 14 Trade geographically tied to Europe 14 10.4 10 Room for increased trade 10 through diversification Exports 6 6 2.3 2.5 2 0.1 0.2 0.6 0.6 0.7 0.3 2 -2 0.4 0.9 -2 1.7 2.0 2.1 2.7 2.7 -6 -6 5.6 -10 -10 Imports -14 -14 -18 16.2 -18 ASEAN 5 South Other North North GCC Other BRICs EU America* MENA Africa America regionsSource: Dubai Chamber based on COMTRADE statistics, *excluding Brasil Page 14
  16. 16. Moroccan Trade, 2010 Imports (US$bn) Other 8 country benefits 7 6 5 External 4 influence 3 Saudi Arabia 2 Bahrain, Kuwait, 1 Oman, Qatar, UAE 0 -1 Morocco Benefits -1 0 1 2 3 4 5 Exports (US$bn)Source: Dubai Chamber based on COMTRADE statistics Page 15
  17. 17. Moroccan Trade, 2010 Imports (US$bn) Diversification of flow Other 8 country France benefits 7 MOROCCO: Manufacturing 6 5 External 4 influence Spain 3 Saudi Arabia 2 Bahrain, Kuwait, 1 Oman, Qatar, UAE 0 -1 Morocco Benefits -1 0 1 2 3 4 5 Exports (US$bn)Source: Dubai Chamber based on COMTRADE statistics Page 16
  18. 18. Diversification of product Moroccan Imports Imports from GCC World ImportsFuels 68% Machinery 13%Plastics 12% Electronics 10%Sulphur 5% Mineral fuels 9%Inorganic chemicals 4% Vehicles 8%Aluminium articles 4% Cereals 5%Pulp 2% Iron & Steel 3%Categories < 2% 6% Plastics 3% US$ 2.7bn Articles NES 3% Plastics articles 2% Sugars 2% US$ 34.4bn Categories < 2% 42%Source: Dubai Chamber based on COMTRADE statistics Page 17
  19. 19. Diversification of product Moroccan Exports World Exports Exports to GCC ElectronicPrecious stones 14% 76% equipment& metals Apparel 13%Fruit & nuts 7% Fertilizers 9%Animal products 6% Phosphate & limes 8%Categories < 2% 12% Apparel accessories 7% US$ 0.3bn Vegetables 6% Precious metals 6% Fruit & nuts 6% Footwear 3% Fish 3% Mineral fuels 3% US$ 17.7bn Meat Categories < 2% 2% 20%Source: Dubai Chamber based on COMTRADE statistics Page 18
  20. 20. Morocco: Trade Costs vs. OECD averages Morocco GCC OECD Cost (US$) Exports 700 582 1,048 Imports 1,000 615 1,107 Duration (days) Exports 14 14 11 Imports 17 16 12 Free trade agreements: European Free Trade Association EFTA, Free Trade Agreement - FTA (US), Morocco and Turkey, Morocco/WAEMU, Arab Free Trade Zone, Morocco-Arab Countries Trade Agreement, Arab- Maghreb UnionSource: World Bank Doing Business 2011, Morocco Trade & Invest portal Page 19
  21. 21. Moroccan Investment
  22. 22. Morocco: GDP growth and unemployment % Arab ODA (US$bn) % 18 18 Falling unemployment 1980–89 1990–99 2000–08 16 16 14 12.8 0.6 0.1 14 GDP growth 12 (% year) Unemployment 12 10 10 8 8 6 6 4 4 2 2 0 0 -2 More than a decade of solid growth -2 -4 -4 -6 -6 -8 -8 1990 1991 1992 1993 1994 1995 1996 1997 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2009 2010 2011Source: IMF World Economic Outlook, October 2011, World Bank MENA Vice Presidency Page 21
  23. 23. Morocco: Inflation and Exchange Rates Dirham % year (MAD) 14 0 Inflation 12 2 10 8 4 6 6 4Stable 2 Dirham/US$ 8 0 -2 10 Stable -4 Dirham/Euro 12 -6 -8 14 1980 1982 1984 1988 1992 1996 2000 2004 2008 1986 1990 1994 1998 2002 2006 2010Source: IMF Page 22
  24. 24. Morocco: External debt position % of GDP % of exports 30 Improving debt position External Debt (LHS) 40 25 20 Debt Service Ratio (RHS) 30 15 20 10 10 5 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: IMF World Economic Outlook, October 2011 Page 23
  25. 25. Morocco: Foreign Direct Investment US $bn US $bn 3.0 3.0 Inflows 2.5 2.5 2.0 2.0 1.5 1.5 1.0 Improving FDI 1.0 0.5 0.5 0.0 0.0 -0.5 -0.5 Outflows -1.0 -1.0 1990 1992 1993 1994 1995 1997 1998 1999 2000 2002 2004 2005 2007 2009 2010 1991 1996 2001 2003 2006 2008Source: UNCTAD Page 24
  26. 26. Moroccan Foreign Direct Investment, 2009 European Union 63% France 37 Spain 8 Real estate 29 Germany 3 Tourism 17 Italy 3 Telecoms 15 Portugal 7 Industry 8 United Kingdom 3 Insurance 3 GCC 24% Transport 3 Kuwait 18 Trade 2 United Arab Emirates 3 Holding companies 2 Saudi Arabia 2 Other Services 5 Other countries 11% Other Sectors 15 Jordan 3 Swtizerland 4 United States 3 Less competition = potential upside?Source: Moroccan Foreign Exchange Office Page 25
  27. 27. Morocco: Agriculture•Recently created Agency for Agricultural Development (ADA) overseesthe implementation of Green Morocco Plan• Development competitive agriculture vital for the national economythrough the realization of projects with high added value in bothproduction and agro-food.•Support to smallholder agriculture through the professionalization ofsmall farms in difficult rural areas needed to promote greaterproductivity, greater recovery of production and sustainability of farmincome. Page 26
  28. 28. Morocco: Agro-Industries Summary• Agricultural sector employs over 4 million people• About 100,000 in agro-industry.• Companies dealing in agriculture or stock breeding, and agriculturalcooperatives, were exempt from corporate tax until December last year.• New permissions are possible and should be discussed as percontract with the government.• Agricultural equipment and products are exempt from value-added tax(TVA) and companies exporting products and services are exempt fromcorporate tax (IS) for a period of five years. Thereafter, firms pay 50% ofthe standard IS rate. Page 27
  29. 29. Renewable Energy & the EU-MENA SupergridUS$ 555 bnSource: Trans-Mediterranean Renewable Energy Cooperation (TREC) Page 28
  30. 30. Morocco Solar Energy MasterplanKey facts• Abundant solar resources (a potential of 2 600kWh/m²/year)• Target: 14% of electrical energy in Moroccofrom solar sources by 2020.• Strategic position at the heart of an energy hub(connection with Spanish Network through twoelectric lines 400kV/700 MW)Le Projet Marocain de lEnergie Solaire• Integrated electricity production driven from solar energy with a totalcapacity of 2000 MW in Ouarzazate, Ain Bni Mathar, Foum Al Oued,Boujdour and Sebkhat Tah. Concentrated Solar Power (CSP) andPhotovoltaic technologies likely technologies Page 29
  31. 31. Morocco Solar Energy Masterplan Regulation & Funding• Sector regulated under the Renewable Energy Law (No. 13-09)which aims to promote energy production from renewableresources for markets or export.• Law allows the right for an operator to produce electricity fromrenewable energy sources on behalf of a consumer or a group ofconsumers connected to the national grid.• Energy Development Fund to the equivalent to $ 1 billion from theKingdom of Saudi Arabia ($ 500 million), UAE ($300 million) and thecontribution of the Hassan II Fund for Economic and SocialDevelopment ($200 million). Page 30
  32. 32. Morocco Solar Energy Stakeholders Agencies• Energy Investment Corporation (EIS) was established in 2010 witha capital of one billion dirhams capital endorsed by the state (71%) andthe Hassan II Fund for Economic and Social Development (29%)• Moroccan Agency For Solar Energy’s (MASEN) mission is toensure the implementation of the Moroccan Solar Plan•National Agency for the Development of Renewable Energy andEnergy Efficiency (ADEREE) aims to contribute to the implementationof government policy on renewable energy and energy efficiency• Moroccan Association of Solar Industries and Windmills(AMISOLA) was created to promote the interests of industrialists andMoroccan professionals working in the renewable energy sector• National Electricity Office (ONE) is well known for its current role inelectrical generation Page 31
  33. 33. Jordanian Trade
  34. 34. Jordanian Trade, 2010 US $bn Integrated into GCC US $bn 2 1.8 2 Exports 1.2 0.9 0.9 1 1 0.5 0.4 0.5 0 0 -1 0.8 -1 0.9 0.9 -2 -2 1.9 Exports to 2.5 -3 other MENA -3 countries -4 strongest -4 Imports 3.9 4.2 -5 -5 North Africa North Asia Other MENA BRICs EU GCC AmericaSource: Dubai Chamber based on COMTRADE statistics Page 33
  35. 35. Jordanian Trade, 2010 Jordanaian Imports (US$m) 2,500 2,000 1,500 1,000 External influence 500 UAE Saudi Bahrain, Oman Arabia 0 0 200 400 600 800 1,000 1,200 Jordan Benefits Jordanian ExportsSource: Dubai Chamber based on COMTRADE statistics (US$m) Page 34
  36. 36. Jordanian Trade, 2010 Jordanaian Imports (US$m) 2,500 China 2,000 JORDAN: USA 1,500 Processing and Manufacturing? Germany 1,000 External influence Egypt India 500 UAE Saudi Bahrain, Oman Arabia 0 0 200 400 600 800 1,000 1,200 Jordan Benefits Jordanian ExportsSource: Dubai Chamber based on COMTRADE statistics (US$m) Page 35
  37. 37. Diversification of product imports Jordan Imports World Imports Imports from GCC Fuels 22%Fuels 63% Machinery 9% Vehicles 8%Plastics 8% Electrical equipment 5%Organic chemicals 3% Plastics 4%Iron and steel 3% Iron & steel 3%Sugars 3% Pharmaceutical 3%Categories < 2% 20% products Cereals 3% Iron or steel articles 3% Fabric 2% Organic chemicals 2% US$ 3.9bn Categories < 2% 36%Source: Dubai Chamber based on COMTRADE statistics US$ 15.2bn Source: Dubai Chamber based on COMTRADE statistics Page 36
  38. 38. Diversification of product exports Jordan Exports US$ 1.2bn World Exports Exports to GCC Fertilizers 15%Pharmaceutical Apparel 13% 19%products Pharmaceutical 10%Vegetables 14% products Vegetables 6%Electrical equipment 8% Salt & sulphur 6%Machinery 7% Precious metals 5%Paper & pulp 7% Electrical equipment 4%Inorganic chemicals 7% Inorganic chemicals 4%Precious stones 3% Machinery 4%Live animals 3% Paper & pulp 3%Categories < 2% 32% Aluminium 3% Plastics 3% US$ 6.2bn Categories < 2% 25%Source: Dubai Chamber based on COMTRADE statistics Page 37
  39. 39. Jordan: Trade Costs vs. OECD averages Jordan GCC OECD Cost (US$) Exports 825 582 1,048 Imports 1,335 615 1,107 Duration (days) Exports 14 14 11 Imports 18 16 12 Free trade agreements: Greater Arab Free Trade Area (GAFTA); Jordan - EU Free Trade Association (EFTA); Jordan – US Free Trade Agreement and other FTAs: Singapore; Canada; TurkeySource: World Bank Doing Business 2011, Jordan Trade & Invest portals Page 38
  40. 40. Jordanian Investment
  41. 41. Jordan: GDP growth and unemployment % Falling unemployment Arab ODA (US$bn) % 20 20 1980–89 1990–99 2000–08 18 18 6.1 1.5 0.8 16 Unemployment 16 14 14 12 GDP growth 12 10 (% year) 10 8 8 6 6 4 4 2 2 0 0 -2 -2 1990 1991 1992 1993 1994 1995 1996 1997 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2009 2010 2011Source: IMF World Economic Outlook, October 2011, World Bank MENA Vice Presidency Page 40
  42. 42. Jordan: Inflation and Exchange Rates Dinar % year (JOD) 14 0.50 12 Dinar/US$ (fixed) 10 8 0.75 6 4Stable 2 1.00 Inflation 0 -2 -4 1.25 1991 1992 1993 1994 1995 1996 1997 1998 2004 2005 2006 2007 2008 2009 2010 2011 1990 1999 2000 2001 2002 2003 Source: IMF Page 41
  43. 43. Jordan: External debt position % of GDP % of exports 140 50 130 External Debt (LHS) Improving 120 external debt 40 position 110 100 30 90 80 Debt Service Ratio (RHS) 20 70 60 10 50 40 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: IMF World Economic Outlook, October 2011 Page 42
  44. 44. Jordan: Foreign Direct Investment US $bn US $bn 4 4 Inflows 3 3 2 2 Improving FDI 1 1 0 0 Outflows -1 -1 1990 1992 1993 1994 1995 1997 1998 1999 2000 2002 2004 2005 2007 2009 2010 1991 1996 2001 2003 2006 2008Source: UNCTAD Page 43
  45. 45. Jordan ICT sector• Int@j (Information Technology Association-Jordan) has beenpromoting the sector over a decade.• More than 80,000 jobs in the ICT sector and contributes approx 14%to GDP. Sector valued at $2.2 billion, with approximately $1bn in ITalone.• More than 270 secondary IT schools in the Kingdom.• Major export markets US (22%), GCC (~30%), Iraq (13%)• GCC spending in IT significant ~ $6.5bn, 2009-10Online Content and GamingBusiness Process OutsourcingE-learning Page 44
  46. 46. Online Content and GamingEarly Success Page 45
  47. 47. Education in Jordan Curriculum and collaboration• Growing services industry driving qualification initiatives. Jordan isamong the regions highest spenders on education (+6% of GDPcompared to a MENA average of ~4%).• Educational industry in Jordan like other emerging markets: youngpopulation; strategic shift to the knowledge oriented sectors• Jordan’s educational standards attracted students from the GulfStates, Far East, and the US.• Jordan on-cue with the demographic shift happening in the GCC• Opportunity may be appropriate to serve the training needs for thenext generation of GCC talent Page 46
  48. 48. Outlook Risks
  49. 49. EU and US growth correlation (1990-2009) United States 0.6 Morocco 0.4 Tunisia Egypt Morocco correlation Lebanon with US and Europe 0.2 high relative to MENA Jordan 0.0 Syria -0.2 -0.4 -0.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 EuropeSource: IMF Jordan 2010 Article IV Consultation, Business Cycle Linkages Page 48
  50. 50. GCC and Asia growth correlation (1990-2009) GCC 0.6 Jordan Morocco Tunisia 0.4 Egypt Also exposed to growth in 0.2 GCC and Asia Syria Lebanon 0.0 -0.2 -0.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 Emerging AsiaSource: IMF Jordan 2010 Article IV Consultation, Business Cycle Linkages Page 49
  51. 51. Summary
  52. 52. Benefits to the GCC Benefits to the GCC?Investment- ICT (Jordan) creative & content driven industries- Education (Jordan) social capital- Solar (Morocco) technological transfer- Agriculture (Morocco) food securityGoodsWide range of products for product diversificationLabour Force (addition of Jordan and Morocco)~ 1.7 million (Jordan)~ 11.6 million (Morocco) Page 51
  53. 53. Post-Oil GCC Scale of investment 1,400 Large • Flexible labour marketsKey 1,200 GCC • Targeting most competitiveMorocco 1,000 industries => maximizingJordan growth 800 Medium • Reduce dependence on U 600 SA hydrocarbons via broad range of industries 400 • Increasing tax-base 200 Small0 0 Private 500 Semi- 1,000 1,500 Government sector government Stakeholders Page 52
  54. 54. Post-Oil GCC Scale of investment 1,400 Large • Flexible labour marketsKey 1,200 Trade GCC • Targeting most competitiveMorocco 1,000 industries => maximizingJordan growth 800 Medium • Reduce dependence on U 600 SA hydrocarbons via broad range of industries 400 • Increasing tax-base 200 Small0 0 Private 500 Semi- 1,000 1,500 Government sector government Stakeholders Page 53
  55. 55. Post-Oil GCC Scale of investment 1,400 Large • Flexible labour marketsKey 1,200 Trade Solar Grid GCC • Targeting most competitiveMorocco 1,000 industries => maximizingJordan growth 800 Medium • Reduce dependence on U 600 SA hydrocarbons via broad range of industries 400 Agriculture • Increasing tax-base 200 Small0 0 Private 500 Semi- 1,000 1,500 Government sector government Stakeholders Page 54
  56. 56. Post-Oil GCC Scale of investment 1,400 Large • Flexible labour marketsKey 1,200 Trade Solar Grid GCC • Targeting most competitiveMorocco 1,000 industries => maximizingJordan growth 800 Medium • Reduce dependence on Education U 600 SA hydrocarbons via broad range of industries 400 Agriculture • Increasing tax-base 200 ICT Small0 0 Private 500 Semi- 1,000 1,500 Government sector government Stakeholders Page 55
  57. 57. Conclusion ‘Take aways’Jordan and Morocco ‘success stories’: sound economicmanagement, unemployment is falling steadily.Ample room for trade and investment diversification with GCCMorocco:- Proximity to and close economic relationship with Europe- Abundant natural resources (sun, wind)Jordan:- Strong focus on service oriented and knowledge industries- Sound trading relationship with the United States Page 56
  58. 58. Thank you

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