Did the Arab Spring Benefit Economic Freedom in Jordan?
Upcoming SlideShare
Loading in...5
×
 

Did the Arab Spring Benefit Economic Freedom in Jordan?

on

  • 764 views

 

Statistics

Views

Total Views
764
Views on SlideShare
764
Embed Views
0

Actions

Likes
0
Downloads
2
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Did the Arab Spring Benefit Economic Freedom in Jordan? Did the Arab Spring Benefit Economic Freedom in Jordan? Presentation Transcript

    • Did the Arab Spring Benefit Economic Freedom in Jordan? Dr. Yusuf MansurEconomic Freedom of the Arab World Conference October 20-21 2011
    • Table of Contents1. Rankings – Global Competitiveness Report – Doing Business Report – World Competitiveness Yearbook – Economic Freedom Index, Heritage Foundation – Economic Freedom of the World Index, Fraser Institute2. Economic Developments – Remittances – Foreign Direct Investment – Foreign Aid – External and Domestic Debt – Budget Deficit – Trade Deficit – Stock Market – Unemployment – Tourism3. Events and Government Actions4. Recommendations and Conclusions
    • Jordan in International Reports & Rankings• Global Competitiveness Report, 2011/2012 Ranked 71 out of 142 countries, dropping 6 places from 65th place in 2010/2011• Doing Business Report, 2011 Ranked 111 out of 183 countries, dropping 4 places from 107th place in 2010• World Competitiveness Yearbook, 2011 Ranked 53 out of 59 countries, falling 3 places in 2010• Economic Freedom Index, Heritage Foundation, 2011 Achieved a freedom score of 68.9, or 2.8 points better than last year, making its economy the 38th freest out of 179 countries in the 2011 Index.• Economic Freedom of the World Index, Fraser Institute, 2011 In 2009, Jordan ranked 62nd out of 141 countries with a score of 6.9 compared to 43 (score of 7.2) in 2008.
    • Global Competitiveness Indicators, 2011/2012 Rank 2009- Performance Major Indicators 2010-2011 2011-2012 2010 Difference 133 139 Countries 142 Countries Countries Basic Requirement 46 57 61 4 Institutions 25 41 45 4 Infrastructure 42 61 59 2 Macroeconomic Environment 105 103 97 6 Health and Basic Education 57 65 72 7 Efficiency Enhancers 66 73 78 5 Higher Education and Training 42 57 59 2 Market Efficiency 43 46 54 8 Labor Market Efficiency 106 112 107 5 Financial Market Development 52 54 65 11 Technological Readiness 61 62 59 3 Market Size 82 84 88 4 Innovation & Sophistication Factors 51 65 70 5 Business Environment Development 49 66 68 2 Innovation 59Source: Global Competitiveness Report, 2011/2012, World Economic Forum 68 77 9
    • Global Competitiveness Index, Ranking per Nation, 2009/2010 to 2011/2012 120 100 80 Ranking 60 2009/2010 40 2010/2011 2011/2012 20 0 Qatar Saudi UAE Tunisia Oman Kuwait Bahrain Jordan Iran Egypt Algeria Lebanon Libya Arabia Country Source: Global Competitiveness Report, 2011/2012, World Economic Forum• Jordan, Egypt, Algeria and Libya have each recorded significant drops in their rankings, over the previous year, while Qatar, Saudi Arabia, Tunisia, Oman and Kuwait have shown improvements in their performances.• Most of the nations that have shown improvements in their performances are oil producing nations, while the non-oil producing Arab nations have shown weaker competitiveness levels.
    • Doing Business Rankings, per Indicator, 2005-2011• The Doing Business Report, 2010/2011 measures the impediments and facilitators of businesses, in a nation. This produces a time series of such factors as the guarantee of property rights, and the intrusiveness of business regulations, over a time series.• The ten factors analyzed in the Doing Business Report are detailed in the table below. 2005 2006 2007 2008 2009 2010 2011 Ease of Doing Business 73 74 78 80 101 100 111 Starting a Business 127 133 133 133 119 125 127 Dealing with Construction Permits 68 71 70 71 116 92 92 Employing Workers 30 45 30 45 48 51 N/A Registering Property 110 106 110 109 105 106 106 Getting Credit 76 80 83 84 125 127 128 Protecting Investors 114 105 118 107 114 119 120 Paying Taxes 16 19 18 19 22 26 29 Trading Across Borders 85 51 78 59 77 71 77 Enforcing Contracts 72 128 75 128 129 124 129 Closing a Business 79 84 84 87 96 96 98 Participating Countries 135 155 175 178 181 183 183 Source: Doing Business Report, 2011, World Bank Group
    • Doing Business Ranking, per Nation, 2011• As shown in the table below, Jordan is in the middle range of in terms of, Doing Business vis the Arab region. However, when all the oil-producing countries are excluded, Jordan is considered advanced. Doing Business Ranks, 2011 Jordan 111 Oman 57 Qatar 50 UAE 40 Bahrain 28 Saudi Arabia 11 Kuwait 74 Egypt 94 Yemen 105 Syria 144 Lebanon 113 Iran 129 Algeria 136 Iraq 166 Source: Doing Business Report, 2011, World Bank Group
    • World Competitiveness Yearbook, Rankings per Primary Indicators, Jordan, 2011• The World Competitiveness Yearbook assesses the capacity of nations in terms of developing and upholding an environment that is conducive to free enterprise, in 59 nations.• The Yearbook measures economic growth, infrastructure levels, enterprise efficiency, and public sector performance, over 331 sub-issues. Jordan’s rank has dropped from 37th place in 2007, to 53rd place in 2011. 2007 2008 2009 2010 2011 Overall Competitiveness 37 34 41 50 53 Economic Performance 44 51 53 45 55 Government Efficiency 32 25 32 39 31 Business Efficiency 31 21 44 46 52 Infrastructure 36 34 40 52 52 Source: World Competitiveness Yearbook, 2011, IMD Foundation
    • World Competitiveness Yearbook, Rankings per Sub-Indicator, Jordan, 2011• Jordan’s ranking has dropped, in most indicators relating to the World Competitiveness Yearbook. 2009 Ranking 2011 Ranking Domestic Economy 39 55 International Trade 6 31 International Investment 35 52 Employment 56 48 Prices 44 40 Public Finance 41 38 Fiscal Policy 21 15 Institutional Framework 32 37 Business Legislation 24 35 Societal Framework 38 43 Productivity and Efficiency 46 59 Labor Market 56 49 Finance 28 41 Management Practices 44 52 Attitudes and Values 39 39 Basic Infrastructure 51 59 Technological Infrastructure 39 49 Scientific Infrastructure 26 49 Health and Environment 46 46 Education 35 46 Source: World Competitiveness Yearbook, 2011, IMD Foundation
    • Economic Freedom Index, Heritage Foundation, Jordan Rankings per Indicator, 2011• The Heritage Foundation offers scores of 0 to 100, on a wide variety of issues affecting economic freedom, where a score of 100 implies maximum freedom. In addition, the Heritage Foundation provides rankings for 141 countries where Jordan placed 38th freest. 2005 2006 2007 2008 2009 2010 2011 Rank 27 36 29 42 51 52 38 Overall Score 66.7 63.7 64.5 64.1 65.4 66.1 68.9 Business Freedom 70 56 54.9 56.3 68.9 65.6 65.8 Trade Freedom 62.4 62.2 74.2 74.8 78.8 78.8 78.8 Fiscal Freedom 79.2 78.2 83.2 83.7 83 83 92.7 Government Spending 63.5 58.3 57.4 53.2 56.9 55.1 60.9 Monetary Freedom 81.8 84.4 83.5 80.4 80.2 73.2 81.4 Investment Freedom 70 50 50 50 50 65 70 Financial Freedom 70 70 60 60 60 60 60 Property Rights 50 50 50 55 55 55 55 Freedom From Corruption 46 53 57 53 47 51 50 Labor Freedom 73.9 74.8 74.6 74.6 74.1 74.2 74.2 Participating Countries 127 130 141 157 179 179 179 Source: Economic Freedom Index, 2011, Heritage Foundation
    • Economic Freedom of the World Index, 1980-2009 • The Economic Freedom of the World Index of 2011 relies on 2009 data. Jordan achieved a score of 6.84 in 2009 (where a score of 10 indicates perfect freedom), and a rank of 55 (a drop of twenty nine places from 2005). Overall, Jordan has most freedom: access to sound money; freedom to trade Legal Structure & Regulation of Rating & Access to Sound Freedom to Gov Size Security of Credit, Labor & Rank Money Trade Property Business Rights Rating 5.5 5.33 2.54 6.82 6.52 6.08 1980 Rank 54 44 76 32 33 30 Rating 5.84 5.14 3.86 7.74 6.32 6.01 1985 Rank 40 54 79 30 36 35 Rating 6.05 7.27 4.37 6.2 6.56 5.98 1990 Rank 42 14 74 69 37 40 Rating 6.42 6.38 5.95 7.15 6.47 6.24 1995 Rank 48 48 45 53 70 39 Rating 7.24 6.08 7.22 9.67 7.02 6.22 2000 Rank 30 67 27 7 63 53 Rating 7.38 6.27 6.31 9.21 7.74 7.35 2005 Rank 26 76 50 37 20 29 Rating 7.14 5.64 6.56 8.35 7.67 7.45 2008 Rank 40 87 35 58 22 24 Rating 6.84 4.37 6.31 9.27 7.18 7.04 2009 Rank 55 109 45 35 34 39Source: Economic Freedom of the World Index (Fraser), Jordan, 2011
    • Population, Corruption and Freedom IndicatorsCountry Population Population GDP per capita, Democracy Corruption Freedom Index of 100 (Million) under 25 000 at PPP = most unstableAlgeria 35.9 47.5% 8.2 125 105 141 49.7Bahrain 1.2 43.9% 24 122 48 153 36.5Djibouti 0.9 57.2% 2.3 126 91 159 NAEgypt 84.6 52.3% 5.9 138 98 130 65.7Iraq 31.4 60.6% 4 111 175 144 65.7Jordan 6.4 54.3% 5.2 117 50 140 48.7Kuwait 3.5 37.7% 40.6 114 54 115 21.7Lebanon 4.3 42.7% 13.4 86 127 115 30.7Libya 6.5 47.4% 18.7 158 146 192 71Mauritania 3.4 59.3% 1.9 115 143 118 57.4Morocco 32.4 47.7% 4.7 116 85 146 46.8Oman 3.3 51.5% 23.3 143 41 153 58.4Palestine 4.1 64.4% 2.9 93 NA 181 NAQatar 1.7 33.8% 66.9 137 19 146 20.7KSA 27.1 50.8% 22.9 160 50 178 52.5Somalia 10.1 63.5% 0.6 NA 178 181 NASudan 43.2 59% 2.3 151 172 165 NASyria 22.5 55.3% 4.7 152 127 178 67.3Tunisia 10.4 42.1% 8.6 144 59 186 49.4UAE 6.7 31% 27.2 148 28 153 24.3Yemen 24.3 65.4% 2.9 146 146 173 86.6Note: Ranking of democracy (out of 167 countries) ; ranking of corruption (out of 178 countries) ; ranking of pressfreedoms (out of 196 countries)Source: The Economist
    • Economic Developments – RemittancesTotal workers’ remittances receipts decreased in the first seven months of 2011 by4.8% compared to the same period in 2010 to reach JD 1,425.4 million. Remittances, Q1 2010-Q2 2011 620 600 580 JD Million 560 540 520 500 480 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Source: “Recent Monetary and Economic Developments in Jordan” Central Bank of Jordan, August 2011. Research Department “Monthly Statistical Bulletin” Central Bank of Jordan, April 2011
    • Economic Developments – Foreign Direct Investment Year FDI (JD Million) Foreign Direct investment decreased in the first two 2006 2,512.7 quarters of 2011 by 15% from 2007 1,859.1 JD 655 million of the same 2008 2,005.7 period in 2010 to JD 561 million. 2009 1,722.9 2010 1,208 2011 (Q1) 249.7 2011 (Q2) 311.2Source: Research Department “Monthly Statistical Bulletin”Central Bank of Jordan, April 2011
    • Economic Developments – Foreign Aid Foreign Grants, Jan 2010 – Jul 2011 Foreign Grants Year Month (JD Million) • Comparing Jan-July 2010 to Jan-July 2011, it is clear that the value of 2010 Jan 35.500 foreign grants in Jordan has nearly 2010 Feb 17.900 quadrupled (or 392%), amounting to 2010 Mar 14.800 JD 1.028 billion at the end of the 2010 Apr 35.400 period. 2010 May 25.400 2010 Jun 28.800 • Saudi Arabia granted Jordan some 2010 Jul 50.000 $1.45 bn to help reduce its budget deficit. 2010 Aug 40.800 2010 Sep 30.000 • In addition, Jordan and the US signed 2010 Oct 10.000 five grant agreements worth $359.3 2010 Nov - million. Note that the table to the left 2010 Dec 113.100 excludes this aid. Making the grants 2011 Jan 17.800 total US$1.81 bn. 2011 Feb - Source: “Jordan, U.S. sign $359 Grant Deals”, Ministry of 2011 Mar - Planning and International Cooperation, October 2011 http://www.mop.gov.jo/pages.php?menu_id=115&local_type=1&local 2011 Apr - _id=551&local_details=1&local_details1= 2011 May 297.200 2011 Jun - 2011 Jul 709.000Source:"Jordan Receives $1 Billion Grant From Saudi Arabia" AmmonNews, 2011 <http://en.ammonnews.net/article.aspx?articleNO=13030>
    • Economic Developments – External Debt and Domestic Debt7,500 • Domestic debt increased by 5%7,000 or 349 million between July6,500 2010 to July 20116,000 JD Million5,500 • External Debt increased by5,000 557.2 million or 13.6% across4,500 the same period4,0003,500 • Public Debt now stands at3,000 57.4% of GDP compared to Jul… Jan… 61.4% of GDP at the end of Feb Aug Dec Nov Mar Jun Jul Sep Oct Apr May 2010. External Debt Domestic Debt Source: Research Department “Monthly Statistical Bulletin” Central Bank of Jordan, April 2011
    • Economic Developments – Budget DeficitDeficit/SurplusMonthly Dec-10 Jan Feb Mar Apr May June July TotalJD MillionsIncluding -243.4 9 -195.2 -53.6 91.2 106.8 -218.3 590.6 87.1GrantsExcluding -356.5 -8.8 -195.2 -53.6 91.2 -190.4 -218.3 -118.4 -1050Grants Source: Research Department “Monthly Statistical Bulletin” Central Bank of Jordan, April 2011 The impact of the Saudi grant can be clearly seen in the table above. The deficit, excluding grants, stood at JD1050 million at the end of July 2011, while that including grants reached a surplus of JD 87.1 million for the same period. Current Account Deficit: The current account deficit now stands at JD -1151.4 million for the first two quarters of 2011. This is an increase of 52.3% or JD 602.1 million over that of the same period of last year.
    • Economic Developments – Trade Deficit Source: Research Department “Monthly Statistical Bulletin” Central Bank of Jordan, April 2011• Compared to July 2010, Jordan’s trade deficit rose 15.4% to reach nearly JD 562.6 million in July 2011.• The value of imports amounted to JD 1.030 m compared to JD 897.1 m or an increase of 13% for the same period.• Meanwhile, the value of exports reached JD 467.8 m compared to JD 409.8 m, an increase of 12.4%.
    • Economic Developments – Stock Market Value Traded JD 2011 2010 Change (%) Jan-Sep 2,348,359,930 5,662,850,599 -59% Start of Arab SpringSource: Amman Stock Exchange, Monthly Statistical Bulletin, Awraq Investments H1 results,October 2011 Value of shares traded for the first 9 months of 2011 was 59% lower than that of the same period of 2010.
    • Economic Developments – Unemployment Unemployment 14 13.5 13.5 13.2 13.1 13.1 13 12.4 12.5 12.2 12 11.5 11.8 11 10.5 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011Source: “Quarterly Unemployment Rates for 2009 and the Third Quarter of 2011” Department ofStatistics, Jordan, 2011 • Between Q4 2010 and Q3 2011, the unemployment rate rose by 1.3% • Unemployment in Jordan fluctuated between the first quarter of 2010 and the third quarter of 2011, recording a low of 11.8% in the Q4 2010 and a high of 13.5% in Q3 2010.
    • Economic Developments – Tourism• The number of visitors to the Kingdom dropped by 13% in the first nine months of the year compared to the same period in 2010, according to official statistics from the Ministry of Tourism & Antiquities.• According to the Ministry of Tourism’s monthly report, 5,097,368 tourists visited the country between January and September 2011, while the figure stood at 5,878,373 in the same period last year.• The report also showed a 31% drop in the number of Jordanian expatriates who visited the country in the same period. Approximately 662,625 Jordanian expatriates visited the Kingdom in the first nine months of the year, compared to 965,227 in the same period of 2010.• The report attributed the drop in the total number of visitors and the number of Jordanian expatriates to the current unrest in the region.• The number of tourists from the Gulf states, however, rose by 28% in the period to 958,635 tourists, compared to 751,385 in the first nine months of 2010, according to the report.
    • Timeline of Protests and Government Actions 07/10/2011 14/01/2011 After a lull in Protests led by trade 25/03/2011 August and unionist and leftist Clashes occurred between September, former parties took place pro-government supporters prime minister calling for the removal and more than 2,000 Ahmed Obeidat led of Samir Rifai 25/02/2011 protesters at Gamal Abdel over 2,000 people government due to their The protests reached a Nasser Circle. 15/04/2011 in a march in inability to rein in prices peak of around 10 On the same day, 35 2,000 protesters Amman to push and poverty. thousand people at Al- thousand gathered in Al- demanded greater their demand for Hussein Gardens west of politicalEvent Husaini mosque the downfall of Al- demanding political and Amman to express loyalty representation, with Bakhit’s 21/1/2011 economical reform. and allegiance to the King. half of them government saying Despite Rifai’s efforts to Local police separated demonstrating in it had failed to deal alleviate Jordan’s anti-government Amman. Also, a crowd with corruption and economic misery, 5,000 protesters and pro- of a few hundred adopt political people protested in regime supporters. Islamists clashed with reform. Amman and other cities. the gendarmerie in Zarqa. Jan Oct 12/06/2011 Commemorating 12 26/01/2011 15/03/2011 years on theGovernment Action 18/01/2011 King speech promises The King appointed a 28/03/2011 Samir Rifai Following the throne, the King said political and economic 53-member committee government clashes, King Abdullah he will relinquish his reform and with government reversed a rise II called for national right to appoint prime Constitution officials and opposition in fuel price. unity, stating that ministers and amendments. leaders to draft new economic and political cabinets, instead laws for parliamentary leaving it to the 01/02/2011 elections and political reforms were on their way. elected parliamentary King Abdullah II parties, setting a The Parliament majority to form future dismissed Rifai’s three-month deadline. rejected calls to cabinets. government and However, the Muslim reduce the kings He also said that more ordered Marouf Al- Brotherhood refused power. And the reforms would be Bakhit to form the new to participate until the government decided to announced in the cabinet, pledging dissolution of ban its supporters future, including new enhanced parliament with a new from demonstrating in election and political freedoms, economic prime minister elected the capital, while the party laws. reform and political from a parliamentary reforms. Also, a majority. opposition was allowed $500m package of to demonstrate in price cuts in fuel and specially designated essential goods, was areas in Amman. announced, along with Government appoints salary increases for a new committee to civil servants and the engage in national military. dialogue.
    • Current Government Status Quo Approved Oct 2011 The table below illustrates the distribution of the Budget Annex: Budget Annex Purpose 66% To maintain subsidies on bread, barley and gas 16% Outstanding government procurement and construction payments 14% The Royal Decree granted JD 100 to all retired and active security, government military personnel 4% Regional Development Fund for GovernoratesIn addition, the government issued international Euro bonds last year, whichhave declined 10% in value, making it difficult for the government to issuenew bonds
    • ConclusionsEconomic Indicator EffectRemittances 13.5% July 2011 – July 2010Foreign Direct 15% first two quarters of 2010 vs. first twoInvestment quarters of 2011Foreign Aid 329% comparing Jan-July 2010 to Jan-July 2011, amounting to JD 1.024 b.External and Domestic Domestic debt increased by 5% or 349 mDebt between July 2010 to July 2011; External debt increased by 557.2 m or 13.6%Budget Deficit Current account deficit stands at JD -1151.4 m for the first two quarters of 2011, which is a 52.3% or JD 602.1 m increase on the same period of last yearTrade Deficit Rose by 15.4% between July 2010–July 2011Stock Market Value traded at Amman Stock Exchange [ASE] declined by 50.3% since December of 2010. The ASE general index decreased by 17.1% for the same period.Unemployment Between Q4 2010 and Q3 2011, the unemployment rate rose by 11.1%Tourism Number of visitors dropped by 13% from Jan- Sept in 2011 compared to the same period in 2010
    • So, Did the Arab Spring Enhance Economic Freedom? Thank You!