Investment / Jordan

Aqaba: Jordan’s investment darling stares down an economic boom

Eco-friendly port terminals have earned the special economic zone international acclaim. Credit: Aqaba Development Corporation

Aqaba: Jordan’s investment darling stares down an economic boom

A view of Aqaba from the Royal Yacht Club.

In the 16 years since it was launched, the Aqaba Special Economic Zone has blossomed into a regional trade hub that has become exemplary of Jordan’s economic potential and resiliency. For global investors, the city’s geographic advantage along one of the world’s busiest shipping lanes is supported by Jordan’s access to 1.6 billion customers, enabled by numerous free trade agreements that have been instrumental to Aqaba’s business magnetism. Today, investment attracted to the Aqaba region has reached about $20 billion, far surpassing the $6 billion that was initially targeted for 2020 by the Aqaba Special Economic Zone Authority (ASEZA). This surge in capital has effectively turned the desert outpost into a city, with Aqaba’s population more-than tripling from the late 1990s, increasing from 60,000 to over 188,000 people today.

As a testament to the city’s fortitude, Aqaba’s expansion has continued apace despite border closures to Iraq, one of the city’s main trade routes, which sealed in 2015, and numerous other external shocks. Aqaba officials credit this ability to thrive under regional pressure to the Kingdom’s political willpower. “The wise leadership of His Majesty King Abdullah II has enabled Jordan to stand at a distance from all the problems that our neighbours are facing,” says Nasser Shraideh, Chief Commissioner of the Aqaba SEZ Authority. “This is why Aqaba has become well-perceived as a regional hub for trade and re-export businesses, and I believe that in light of forthcoming reconstruction of the region, many new opportunities will open.”

As Iraqi forces begin to retake control of their country, Aqaba’s path to boom time prosperity may just be around the corner. “Before the borders closed with Iraq, 50% of goods handled at our ports went there,” says Ghassan Ghanem, CEO of the Aqaba Development Corporation (ADC), the development arm of ASEZA. “Today, that volume is only 5%. If borders are reopened, we can expect our ports to begin working overtime.” Yet, even with this trade loss, Aqaba has maintained one of the lowest unemployment rates in Jordan. Indeed, the region has become an economic engine, attracting $15 billion in tourism and real estate investment to date – including the country’s first championship golf course at Ayla Oasis – with industrial and logistics investment now catching up.

An ADC strategy to diversify Aqaba’s ports has since catalysed a wealth of new projects in a move that has gained acclaim from the World Bank for contributing to the overall improvement of the country’s stock in transport infrastructure. “A comprehensive strategy was implemented to develop the ports community, introduce energy terminals, and provide marine services, all according to ASEZA’s eco-friendly regulations,” says Ghanem. “Plans were set defining a new group of projects that included specialized terminals, which are now under construction or operating, including the New South Port, the LNG Terminal, the LPG Terminal and the Phosphates Terminal, as well as the rehabilitation of existing terminals, such as expansion at the Aqaba Container Terminal, the only terminal outside of Europe operating under the Ecoport label,” adds Ghanem, referring to the environmental standard accredited by the European Sea Ports Organization.

Taking up this green strategy brings Aqaba closer to being a true regional trade leader. “We are increasingly seen by a diverse business community as a competitive regional logistics hub that is supported by outstanding infrastructure, an open air-policy at King Hussein International Airport and world-class ports, with easy access to the Levant and beyond,” Shraideh says, adding, “Jordan is a regional role model for security and economic resilience. When security allows, trading across borders will certainly contribute to bringing peace and stability to the region.”