While Jordan’s trade continues to grow with the US in midst of a regional crisis, the Kingdom has been left pondering how it can replicate the same success with the European Union. Mohammed Bataineh, Chairman of the American Chamber of Commerce in Jordan (AmCham Jordan), tells us which services and exports he believes are sharpening Jordan’s competitive edge.
How can European investors follow Americans’ lead, given that the US Free Trade Agreement (FTA) with Jordan has been more successful than the EU’s Rules of Origin deal?
The US is Jordan’s number one export partner, representing $1.8 billion in trade (2016). These figures have grown in recent years despite the region suffering economically. The US FTA has been the cornerstone of this growth: unlike the relationship with Europe, our system sometimes favors Jordan and over the US. One of our proudest achievements is the Tijara coalition [of business associations]. Tijara, meaning “trade” in Arabic, started after the FTA around 2001. Now we have formed a stronger version with 36 entities from the public and private sector to diversify exports to US markets. This could be an example for European countries. We have identified certain sectors, like food: we have quite an advanced industry, especially in terms of desserts.
Can Jordanian exports be competitive relative to other countries in the region?
The short answer is yes, because lower labor costs compensate for the logistics. Shipping can be expensive, but with higher quality we can sustain this extra burden. For example, one company has signed a deal to sell sugar-free chocolate bars in the US. There is even foreign direct investment [by Jordanian companies]. Hikma Pharmaceuticals is heavily invested in the EU, starting from Portugal, and then to the US.
What potential lies in the service-driven side of the economy?
We have concentrated on IT-enabled services like graphic design. Over 80 per cent of Arabic content on the internet is of Jordanian origin. Dubai is our number one competitor – mostly with Jordanians working for them – but we are more affordable. Medical services is another sector to focus on now that we have the new liability law for doctors: open-heart surgery that would cost $100,000 in the US can be done in Jordan by American-trained doctors for $10,000 or less.
Could this lead to the development of a medical tourism industry?
That was the original situation, with patients traditionally coming from all Gulf countries. Unfortunately, Jordan became very security sensitive and started over-vetting people. This has stopped now. We have many doctors and engineers – we can be compared to many advanced European countries. Jordan’s advantage is not only fluency in English but also the quality of personnel.
Have technical abilities like this shown dividends in other sectors?
Two examples of success stories in IT involve Jordanian companies that have been sold, one to Amazon and one to Yahoo. The first, Souq.com, is an online marketplace and the second, Maktoob, a communication platform, similar to Facebook. We have also supported startups through Oasis500 – a platform for new entrepreneurs that enables them to develop amazing programs to be sold or further built through joint ventures.
What can EU powers learn from the success of Jordanian-US business relations?
We keep talking with our European counterparts to duplicate the success of the Jordan-American relationship. An interesting example is US-based yogurt maker Chobani. Its owner, Hamdi Ulukaya, suggested that Jordan use refugees in the supply chain rather than just give them a handout. We have to look at the refugees as consumers and a part of our supply chain, not as a burden.
With unemployment at 18.5%, would that plan cause any problems?
In theory, if a Syrian takes a job here, he takes it from a Jordanian. This, however, is not the case. I think no nation is more hospitable to foreigners than Jordan. Half our population is of Palestinian origin. In the case of Chobani, in June they will be opening a factory in need of 1,000 employees. If we employ 500 Syrians and 500 Jordanians, this is 500 jobs for Jordanians that were not there before. I must commend one European company, IKEA. They have been in Jordan for some time and started including refugees in the supply chain, on a small scale.
What reforms has Jordan made that can convince foreign powers to begin viewing the crucial role it could play in rebuilding the Levant?
Jordan is the perfect springboard for European and US joint ventures to help rebuild Syria and Iraq. At AmCham, we set up a major training and accreditation facility to train people on construction equipment, such as cranes. Our laws are important and I would also mention the strategy focused less on fighting corruption, more on pre-empting it, called the Code of Conduct for the Private Sector. We wrote it using examples from great companies like Coca Cola. It is being put into law: you cannot give unlimited gifts or take government employees out for dinner – in Jordanian culture they could not refuse such invitations. The country has come a long way: today you can renew your license, pay your utility and even get your passport in a matter of hours.