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Jordan rising star of middle east


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Jordan rising star of middle east

  1. 1. 2012Jordan: Rising star of the Middle East Paritosh Kashyap Jordan: Rising star of the Middle East 01-Jan-12
  2. 2. Jordan: Rising star of the Middle EastJordan is a small Arab state, located on the cross roads of the famous holy land. Politically stable& peaceful, it has somehow maintained a low profile in a region- marked with geopoliticalsignificance as well as political turmoil. It does not reflect the extravagance like UAE nor does ittry yield political influence like Qatar. It’s neither the “Blue Eyed Boy” of the West like Egypt,nor can it exert economic influence like Saudi Arabia. Notwithstanding the low profile Jordanmaintains, the Levant state has been upfront in introduction of political, social & economicalreforms coupled with encouragement of an entrepreneurial culture. Slowly but certainly Jordanis getting transformed as a champion of new Middle East. The given “Report” is focused onJordan & will analyze it with various socio-economic dimensions, its current transformations &the wide future implications it holds for itself & the region.Economical & Demographical parameters 10 8 6 4 Jordan World 2 MENA 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 -2 -4Fig 1: Jordan’s gdp growth rate Vis- a- vis world & mena gdp growth rate. Source: World BankParitosh Kashyap Page 2
  3. 3. Jordan: Rising star of the Middle EastGdp (us $ billions) 27.57Population (million) 6.05GNI per capita ($) 4,340Life Expectancy 73Literacy Rate (%) 92Mobile Usage (per 100) 101.1Internet Usage (per 100) 38.9Motor Vehicles (per 1021000)Table 1: shows key economical & demographic parameters for Jordan. Source: World BankJordan: Tourism StatisticsTourism is one of the key constituent of Jordan’s economy. Jordan has an arsenal of marveloustourist sites to visit – some of the spellbinding archaeological & historical sites from Babylonian,Greek, Roman & Medieval Era; pristine ecotourism sites & exotic natural landscapes. Thebiggest attraction is Petra, one of the seven wonders of the world- a city carved out ofmountains.Paritosh Kashyap Page 3
  4. 4. Jordan: Rising star of the Middle East 5 4.0 4.5 3.5 4 3.0 3.5 2.5 3 2.5 2.0 Tourists Arrival 2 Annual Receipt 1.5 1.5 1.0 1 0.5 0.5 0 0.0 2004 2005 2006 2007 2008 2009 2010Fig 2: annual international tourist arrival in millions & tourist receipts in Billions for Jordan,between 2004 & 2010. Source: Nation masters, Jordan Times & UNWTOA bridgehead between the West & the East, Jordan is also emerging fast as a medical tourismdestination. In 2008, 250,000 foreigners from 84 countries have been treated in Jordan. Majorarrival comes from Iraq, Palestine, Sudan followed USA, UK & Canada. Jordan’s strengthprimarily lies in well trained English speaking medical staffs, better health facilities & costeffectiveness. It is estimated to be 25 percent of the cost of comparable treatments in USA, whichincludes airlines, lodging & sightseeing.Paritosh Kashyap Page 4
  5. 5. Jordan: Rising star of the Middle East 35 30 25 20 Jordan 15 Middle East World 10 5 0 Doctors Nurses Dentists PharmacistFig 3: compares number of doctors, nurses, dentists & pharmacists per 10,000 people for-Jordan, Middle East & World. Source: Medical Tourism MagazineJordan: Education SystemUnlike its neighbors in the Gulf, Jordan is not blessed with oil reserves. Hence, education &human resource development has been the sole criteria to attain wide scale prosperity, socialwelfare & higher standard of living. In alignment with above sated facts, education has alwaysbeen high up on agenda. The education system in Jordan aims at providing high standard oflearning, based on - universal access, equality & modern information technologies.Strong steps have also been taken to consolidate Jordan’s excellence in the field of secondary &higher education as well. Some of the key salient features related to Jordan’s education systemare as follows (Source: UNICEF):Paritosh Kashyap Page 5
  6. 6. Jordan: Rising star of the Middle East .Good education facilities have helped Jordan, conclusively transform from an agrarian society to an industrial & urbanized one. Enormous strides have been taken in every level of education- primary, secondary as well as higher. 20.6% of govt. spending goes to education. This had paid off in terms of high school as well as college enrollments. Jordan has 2000 researchers per million, highest among the 57 OIC (Organization for Islamic Cooperation) countries. The average figure for OIC stands at 500 per million. In higher education females outnumber their male counterparts. 42 % of the populations in tertiary age are in tertiary college. 2,500 45.0% 40.0% 2,000 35.0% 30.0% 1,500 25.0% 20.0% 1,000 R/ M 15.0% %f 500 10.0% 5.0% 0 0.0% Fig 4: shows R/M (researchers per million) & percentage of female in research for selected countries. Source: UNICEFParitosh Kashyap Page 6
  7. 7. Jordan: Rising star of the Middle East 40 30 35 25 30 20 25 20 15 Universities 15 population 10 10 5 5 0 0 Jordan Syria UAE Greece Saudi Israel Arabia Fig 5: shows number of universities against population in millions for some of the selected Middle East & Mediterranean countries.Jordan: Silicon Valley of Middle East?Jordan is fast emerging as an entrepreneurial hub in the Middle East. Some of the majorentrepreneurial success sagas from the region- Maktoob, Jeeran, and and Al Bawa etc-all haveits origin in Jordan. Touted as “Silicon Valley” of Middle East, Jordan’s emergence as a start-uphub could be attributed to multitudinous factors- vast data & IT infrastructure, skilled &economical work force, open source communities, Govt. initiatives & support and decentinternet & high mobile penetration etc. (With negligible natural resources in its disposal, anentrepreneurial culture was also some sort of a necessity in the Levant state.)Paritosh Kashyap Page 7
  8. 8. Jordan: Rising star of the Middle East Jordan 61 Lebanon 54 Syria 35 UAE 28 Egypt 24 Saudi Arabia 23 Morocco 5 Tunisia 3 0 10 20 30 40 50 60 70Fig 5: country wise number of start- ups registered with yalla start-ups- most comprehensivedata base for start-ups in the region. Maktoob: Founded in Jordan in 1998, it was the 1st Arabic E-mail service provider in the region. Acquired by Yahoo in 2009 at US $ 80 millions, it’s presently the official arm of Yahoo in the Middle East region. Jeeran: An internet service company founded in 2000. Commands 650,000 websites, 120,000 blogs & 6 million monthly visitors. Al- Bawaba: Is a news & media website focused on Middle East. Edufina: A website dedicated to provide updates on universities in Middle East. The website aims at becoming a one- stop shop for all the university related information in the region. Istikana: launched in March 2011, it is an on demand video site. Within 135 days of its inception, it racked up a million visits. Its core competence lies in provision of some old Arab classic videos.Paritosh Kashyap Page 8
  9. 9. Jordan: Rising star of the Middle East MarkaVip: is an upcoming e-commerce website focused on luxury products. The start- up has successfully pulled in an investment of US $ 2 millions in recently concluded Oasis 500 (a start-up accelerator based in Jordan) angel investments event.Successful start-ups also require successful incubators to provide investment & consultationsupport. Jordan has been upfront in taking initiatives in the given direction as well. One suchattempt is Oasis 500 aimed at bringing start-ups & investors on the same platform. Another isQueen Raina Center for Entrepreneurship (QRCE). Established in 2004, so far has incubatedmore than 25 technology start-ups in Jordan & benefitted around 25,000 people with- bootcamps, workshops & networking activities.Other than being a pioneer in digital start-ups, Jordan also has vast potential to morph into anoutsourcing hub par excellence. It has a vast pool of English speaking work force salaried 75 %lower than UAE & just little bit higher than India- the global outsourcing giant. Indonesia 6.9 Russia 5 Brazil 3.6 Egypt 5.8 India 7.1 Jordan 6.2 0 1 2 3 4 5 6 7 8Paritosh Kashyap Page 9
  10. 10. Jordan: Rising star of the Middle EastFig 6: Shows Jordan’s outsourcing index Vis a vis, some of the major outsourcing destinationsacross the world. Source: Sourcingline.comExportIn the recent pass Jordan’s trade sector has experienced a substantial uplift. In 2011, its overallexport is estimated at US $ 8.067 billion with major export partners’ being- USA, Iraq, India,Saudi Arabia etc. Major area of export includes- clothing, fertilizers, chemicals etc. According to“Economy Watch”, an independent think tank, Jordan has signed highest number of free tradeagreements across entire Arab world. It has put in place “free trade zones” in partnership withUSA & Israel. Qualified Industrial Zones or QIC, as they are known as are aimed to takeadvantage of free trade agreements between Israel & USA. Produce from these QICs have directaccess to American markets subject to the adherence to certain predefined conditions. In 2010,the total textile export to USA from these free trade zones, jumped to US $ 1.01 billion from ahumble US $ 447 million in 2009.Challenges & the way aheadJordan has come a long way from a country once dependent on foreign aids & tourism to anemerging centre for technology & trade in the region. But it is not devoid of challenges. One ofthem is high rates of unemployment among youths. Jordan has a very young demographic. Ithas made commendable progress in higher education, but is running short of jobs toaccommodate its college pass outs. Its problems are very much in line with the problems facedby Eastern Europe in the 90s. The anticipated economical & social problems which may stemParitosh Kashyap Page 10
  11. 11. Jordan: Rising star of the Middle Eastout of high rate of unemployment- calls upon Jordan to hasten up employment opportunitiesfor youth.There are other challenges as well. Its neo liberal policies have so far been counterproductive inbridging up the gap between rich & poor. The manifestations of such policies have clashed withthe interests of Trans Jordanian- tribes living in the rural parts of the country & often employedin the public sectors. Its policy frameworks though a step forward is still not very impressive. Inmost of the “Ease of doing business” parameters, it refelcts a very sub-standard performance. Getting Credit 150 protecting investors 122 resolving insolvency 104 Registering Propery 101 Starting a business 95 Construction Permits 93 Electricity 36 taxes 21 0 20 40 60 80 100 120 140 160Fig 7: shows Jordan’s rank in various “ease of doing business parameters” for 2012. Source:doingbusiness.comJordan is nation deprived of natural resources. But this has been a blessing in disguise. Withlesser natural wealth at its disposable, its focus has been more on intellectual wealth. So far ithas made rapid progress in this direction. But the story is still in its making as lot more needs tobe done. Jordan needs to uplift its intellectual wealth to unprecedented heights to transformParitosh Kashyap Page 11
  12. 12. Jordan: Rising star of the Middle Eastinto a technology, trade & innovation hub of international repute. It should look beyond theobvious- observe some of the biggest success sagas from the East- Singapore, Hong-Kong, Japanetc. Jordan shares a lot of similarities with them- small population, lesser natural resources,political stability & big dreams. Seeking inspiration from them may be helpful.Paritosh Kashyap Page 12