Jordan
In-depth country-focused analysis on Jordan's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Jordan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Jordan, as well as the latest industry developments that could impact Jordan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Jordan before your competitors.

Country Risk

Jordan Country Risk

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Core Views

  • The formation of a Palestinian unity government in June 2014 marks a symbolic end to the long-running dispute between the rival Fatah and Hamas factions ruling the West Bank and Gaza Strip respectively. However, the reconciliation agreement will face major difficulties, as ideological differences between the two parties remain stark. Maintaining a central government over two geographically separate regions will be a massive challenge. The unity government will struggle to improve the Palestinian territories' lacklustre economic outlook.

  • We have revised downward our real GDP growth forecasts for the Palestinian territories, following Israel's offensive in Gaza over the summer of 2014. The fighting has severely damaged Gaza's infrastructure and industrial base, and we expect the Palestinian unity government to struggle with the reconstruction of the Strip. We...

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Jordan Operational Risk Coverage (9)

Jordan Operational Risk

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BMI View: Jordan ' s geostrategic location and fairly well connected road and port networks ensure ready access to major regional and international markets, representing a crucial advantage to businesses based in the country. Trade activities are further reinforced by an efficient trade bureaucracy and governance system, though export procedures are considerably more competitive in terms of costs and document requirements than import procedures. However, planned airport, port and railway infrastructure upgrades will be necessary to preserve Jordan ' s competitiveness vis-à-vis strong logistics competitors in the region, notably in the GCC. Although Jordan ' s close proximity enables firms to have reduced import times and costs for fuel and energy needs, its dependence on neighbouring...

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Jordan Crime & Security

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With a negligible murder rate of between 1 and 2 per 100,000, and an effective and low corruption police force, Jordan proves to be a low-risk country for investors. Yet despite Jordan possessing very effective intelligence and counter-terrorism agencies, risk does remain in the form of high terrorist threat. In spite of this, Jordan is one of the safer countries in MENA and the Arab world, with the country attaining a security risk score at a low 48.2 out of 100, placing it 83 rd in the world. Regionally, Jordan figures quite highly as it is only bettered by the Gulf states, and thus exceeds all of its neighbours with the exception of Saudi Arabia.

Crimes like robberies and assault appear low but these are potentially opaque, as Jordan, along with several other Arab countries, recognises a process called otwa whereby families resolve disputes among themselves, with minor governmental oversight. This could...

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Jordan Labour Market

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Jordan's labour force is, on the whole, well educated and highly urbanised with a high level of primary education and literacy - even in rural areas. Investors will find a readily available pool of skilled and semi-skilled labourers who are cheap to hire and fire. Jordan scores 53.7 out of 100 overall for Labour Market Risk. At 66 th in the world and just behind Mexico, Jordan ranks 6th within MENA, behind Israel and the GCC only (with the exception of Kuwait and Oman). Regionally, Jordan figures highly. Jordan betters two of its neighbours (Syria and Iraq) in every aspect, with a higher availability of labour score than Saudi Arabia and one of the highest educational scores in the region.

While women show higher rates of university enrolment than the regional average, they continue to be relegated to mostly domestic roles. Another negative aspect of Jordan's labour force is the so called brain-drain effect, as many of the more...

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Jordan Logistics

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Jordan's road transport network connects it to all of its neighbours; however its principle cities suffer from congestion and mapping issues. This means that while access to neighbouring states is easy, Jordan's principle cities could prove difficult to navigate, and this could inhibit the fluid movement of goods and services. Jordan scores 54.8 out of 100 in the Logistics Risk index - 65th in the world behind Russia and ahead of Argentina. Regionally, this puts Jordan behind Egypt, ahead of Kuwait and around the middle of Middle East and North Africa (MENA) as a whole.

Jordan's only port offers access to key maritime trade routes such as the Arabian and Mediterranean seas and looks to benefit from a needed upgrade. Its rail system, key to its mining industry, would also benefit from upgrade and extension - offering access to its neighbours and the region as a whole - as it currently provides little opportunity for investors to exploit....

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Jordan Trade & Investment

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BMI View: Jordan's greatest strength with regards to trade and investment opportunities is i ts economic openness. L imited government intervention and a comparatively good legal system and ICT development also offer advantages to incoming investors. Jordan's Trade and Investment Risk score is 56.2 out of 100. In a region where the highest score is the UAE's 66.3 out of 100, Jordan scores highly, ranking sixth out of 18 countries in the Middle East and North Africa, behind the UAE, Qatar, Bahrain, Oman and Israel.

Jordan is very open to investors, with few trade barriers and many free trade agreements (FTA) and association agreements - most notably the Jordan-US FTA. With tax incentives for foreign investors in most sectors of the economy and lucrative...

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Jordan Industry Coverage (7)

Autos

Jordan Autos

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Heightened risk from the situation in Syria, coupled with a weak economic outlook, will continue to dampen autos demand in the Levant region. Of the three countries covered in this report, it is the smallest market (Jordan) that has the strongest near-term growth potential In 2014, BMI is targeting 5.8% growth in new vehicle sales rising to 6.7% and 6.8% growth across 2015 and 2016 respectively.

Backing up our cautiously optimistic outlook on the evolution of new vehicle sales in Jordan is our Country Risk team's belief that economic activity will strengthen from 2015 onward, due to robust public investment and gradual improvements in domestic demand. BMI forecasts real GDP growth to accelerate to 3.3% in 2014 and 4.1% in 2015, compared to an annual average of only 2.6% between 2010 and 2013.

Continued progress on public...

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Commercial Banking

Jordan Commercial Banking

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Commercial Banking Sector Indicators 
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Defence & Security

Jordan Defence & Security

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Amidst regional instability, BMI is forecasting Jordan's defence spending to grow in 2014. In the increasingly volatile Middle East, Jordan is facing an active threat from the civil war in Syria. We are estimating that defence spending will grow by 12.0% over 2014 to US$1.73bn. This follows rather slower growth of 8.1% over 2013, when the budget has totalled US$1.55bn. Although strong ties link the Jordanian regime and US and UK defence sectors, a stagnating economy and ongoing political risks mitigate against a wholly positive 2014 outlook.

Jordan's security threats are primarily regional. Following the defeat of the Muslim Brotherhood-led regime in Egypt in 2013, domestic Jordanian Islamists have been significantly weakened. The ruling regime - headed by King Abdullah II - enjoys good relations with the US and UK (as reflected in significant military cooperation and sales). However, despite having a peace treaty with...

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Insurance

Jordan Insurance

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BMI View: At first glance, it is obvious that many of the weaknesses that are common to (almost) all the national insurance markets of the Middle East & North Africa (MENA) region feature in Lebanon and Jordan. However, both markets are patently open to competition from foreign insurers. In both cases, local companies are resilient. It is easy to find examples of innovation.

As of early 2014, it remains obvious that many of the weaknesses that are common to (almost) all the national insurance markets of the Middle East & North Africa (MENA) region feature in Lebanon and Jordan. Neither is a particularly large market in absolute terms - nor will either ever be so. In both countries, there are literally dozens of undersized insurers, focusing mainly non non-life lines. They are lacking economies of scale, access to capital and ability to write risks without buying a lot of...

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Medical Devices

Jordan Medical Devices

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Espicom Industry View:   T he Jordanian medical device market is projected to grow at an above average pace of 9.3 % per annum to 2018, but the overall market size and per capita spend will remain comparatively small in global terms. The key driver of growth remains medical tourism, for which Jordan is the No 1 destination in the region.

Headline Industry Forecasts

  • The Jordanian medical device market is projected to expand by a CAGR of 9.3% which should see it rise from an estimated US$243.7mn (JOD172.6mn) in 2013 to US$380.9mn (JOD270.4mn) in 2018. In per capita terms, the market is projected to rise from an estimated US$33.5 (JOD23.7) per capita in 2013 to an estimated US$47.9 (JOD34.0) per capita in 2018.

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Pharmaceuticals & Healthcare

Jordan Pharmaceuticals & Healthcare

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BMI View:   Regional political instability and the accompanying demographic impact from refugee s have had a negative impact on   Jordan's healthcare sector .   L ow quality and counterfeit pharmaceuticals are still prevalent in the market, although steps are being taken to combat this, such as   the Jordan Food and Drug Administration (JFDA) 's recent conference . Although we forecast growth for both the pharmaceutical and healthcare...

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Telecommunications

Jordan Telecommunications

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BMI View: Jordan's telecoms market is set to receive a boost in Q414 as Zain plans to launch the country's first 4G network before the end of the year, after acquiring a licence and spectrum in April . Although Zain's decision poses an upside risk to BMI 's 3G/4G growth forecast for Jordan , this may be mitigated by a lack of competition, as Orange and Umniah have not yet indicated any plans to also acquire 4G licences and spectrum. Both operators have felt the impa ct of strong competition, as...

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