April 2011 - Malnor

More documents

Recommendations

Info

Credit Guarantee country profile The Hashemite Kingdom of Jordan Credit Guarantee experience Cover is restricted to irrevocable letter of credit. Recent political highlights � � � Country S/T business S/T political rating cycle indicator indicator 3C 24 King Abdullah II, Jordan’s monarch since 1999, has extensive powers: he appoints governments, approves legislation and is able to dissolve parliament. Over the past few years he has been facing growing demands for political reform. Previously he had backed a 10-year programme for political, social and economic reform and supported a plan for elected local councils. Conservative legislators were apprehensive about the proposals. Following the popular uprising in Tunisia and Egypt, King Abdullah dismissed his government and appointed a new prime minister to oversee the introduction of political change. Jordanian tribal figures have issued a petition urging King Abdullah to end his Palestinian wife’s role in politics. Hard-line nationalist East Bankers have taken issue with both Queen Rania’s Palestinian background and her highly visible role in the country’s maledominated society. The queen has been a long-time Debt recovery Suggested use of a collection agent. � � Credit Guarantee Insurance Corporation of Africa Limited Credit Guarantee House, 31 Dover Street, Randburg, 2194, PO Box 125, Randburg, 2125, Tel: 011 889 7000, Fax: 011 886 1027, Email: info@cgic.co.za “ . . . significant economic reforms . . . have spurred economic growth . . . ” Country rating key – political risks: 1 = low, 2 = medium, 3 = high Commercial risks: A = low, B = medium, C = high advocate of Jordanian women’s rights, including the right of women to pass on their citizenship to their children if they marry foreigners, a right which is absent in most of the Arab world. Publicly attacking royal figures is s taboo in Jordan under tough sedition or lese majeste rules that limit discussion of Jordan’s royal family. The country’s peace agreement with Israel and its close ties with the US are unpopular with many Jordanians. A day after Prime Minister Maaruf Bakhit rejected calls for a constitutional monarchy thousands of Jordanians demonstrated in Amman to demand “regime reforms”. While the Islamist movement wants the prime minister to be elected rather than appointed by the monarch, leftists seek the scrapping of amendments to the he 1952 constitution, which was promulgated by King Abdullah II’s grandfather King Talal. According to o experts, the document has been amended 29 times giving greater power to the monarch and weakening the legislature. Since January, Researched and compiled by Hlolohelo Pule, economic services – Credit Guarantee Insurance EXPORT & IMPORT SA // APRIL 2011
thousands of protestors had been out on the streets of Jordan’s cities, angry over a stagnant economy, upset with government corruption and demanding that senior political leaders resign. Recent economic highlights � � � � � � Jordan’s economy is among the smallest in the Middle East, with insufficient supplies of water, oil and other natural resources, underlying the government’s heavy reliance on foreign assistance. Jordan is ranked among the five most water poor countries in the world. Because of short supply of water many households receive water only once or twice a week. Poor connections and leaking pipes mean that even available water does not always reach some homes and businesses. Other economic challenges for the government include high rates of poverty and unemployment, with an estimated 12% of the population unemployed and 25% living in poverty, as well as inflation and a large budget deficit. King Abdallah has implemented significant economic reforms such as opening the trade regime, privatising state-owned companies and eliminating most fuel subsidies, which in the past few years have spurred economic growth by attracting foreign investment and creating some jobs. Food prices increased by 15% between October 2010 and January 2011; this could lead to a higher cost of living and a rise in poverty levels since Jordan imports over 90% of its food needs. The global economic slowdown has depressed Jordan’s GDP growth. Export-oriented sectors such as manufacturing, mining and the transport of re-exports have been hit the hardest. The Government approved two supplementary budgets in 2010, but sweeping tax cuts planned for 2010 did not materialise because of Amman’s need for additional revenue to cover excess spending. The budget deficit is likely to remain high with Amman continuing to depend heavily on foreign assistance to finance the deficit in 2011. Jordan’s financial sector has been relatively isolated from the international financial crisis because of its limited exposure to overseas capital markets. Due to the unrest in the region, Finance Minister Mohammad Abu Hammour stated that the forecast growth in GDP for this year has been adjusted to 4% from the previous 5% growth projection. According to the International Monetary Fund (IMF) government debt was forecast to reach 67,1% of GDP by the end of 2010, while the fiscal deficit came down during the course of the year, falling by around 35% to $808,91 million, compared with $1,23 billion during the same period in 2009. The inflation rate was 6,1% in December 2010, rising by 1,5% from the previous EXPORT & IMPORT SA // APRIL 2011 � � � � � month. Standard & Poor’s rating agency cut its long-term local-currency rating to BB+ or junk. Thanks to multiple bilateral agreements, Jordan has become one of the most open economies. Setting up business in Jordan offers prospects not only for expansion on the local market, but also to neighbouring countries because of the re-exporting platforms. Jordanian authorities are also encouraging investments by promoting special conditions for foreign investors at the 13 special economic zones (QIZ). Lebanese Prime Minister Saad Hariri announced in late December the formation of the Mashreq (Levant) Business Forum, which includes Lebanon, Turkey, Syria and Jordan. The forum’s goal is to promote free trade in the region. Fourteen sectors were identified as being a priority including industry, agriculture, science, finance, tourism and oil. The forum will represent the private sector in the four countries, which have agreed to tighten economic ties between representatives of their private sectors. The volume of trade between the four countries amounts to $12 trillion. Jordan is currently exploring nuclear power generation to forestall energy shortfalls. Jordan relies almost entirely on imported energy and is turning to nuclear power to meet increasing electricity demand. It plans to build reactors by 2019 but it will first need to choose a supplier of its first nuclear plant within 1H11. It has signed nuclear-cooperation agreements with 11 countries, most recently with Italy in February this year. Jordan’s Ministry of Planning and International Cooperation (MOP) has released its Executive Development Programme (EDP) for 2011-13 with $8,4 billion to be distributed among 24 different economic sectors. Around 55% of the spending will be allocated to infrastructure, water, housing and transportation projects; 20% to social welfare; 14% to education; 6% to improving business practices; 3% to modern technical training; 2% to financial and administration reforms; and 1% to legislation. Some of the EDP’s planned projects will rely on public-private partnerships for funding, particularly for large projects such as the National Railway Network. According to the finance minister, strong demand for Jordan’s upcoming debut Eurobond issue will help a rebound in FDI, underpinned by the country’s macroeconomic fundamentals and political stability. The minister did not disclose the size of the issue but investment bankers have estimated Jordan is seeking not less than $500 million depending on the level of demand and the right pricing. In early March Moody’s said it assigned a BA2 rating to the proposed senior unsecured bond while Standard & Poor’s Ratings Service said it assigned it a BB long-term debt rating. Latest trade developments � � � � � Credit Guarantee country profile Major exports: clothing, fertilizers, potash, phosphates, vegetables and pharmaceuticals. Major imports: crude oil, machinery, transport equipment, iron and cereals. Main trading partners: Saudi Arabia, China, US, Germany, Iraq, India, Syria and UAE. SA exports to Jordan totalled R153 million in 2008, R244 million in 2009 and R186 million in 2010. SA imports from Jordan totalled R237 million in 2008, R98 million in 2009 and R104 million in 2010. ◆ 25
Page 2 and 3: Cool Chain Association Following a
Page 4 and 5: Editor’s Comment 2 Publisher: Ken
Page 6 and 7: Cover Story Boosting warehouse oper
Page 8 and 9: export & import International Globa
Page 10 and 11: Port of the Month The desert countr
Page 12 and 13: Port of the Month “Port of the wh
Page 14 and 15: 18652 Export 04/2011 Port of the Mo
Page 16 and 17: Advertorial Your agent, your ally T
Page 18 and 19: 18747 Export 04/2011 Warehousing Co
Page 20 and 21: Import Challenging supply tradition
Page 22 and 23: IT 20 Effective organisations need
Page 24 and 25: Credit Guarantee country profile Ga
Page 28 and 29: Credit Guarantee country profile
Page 30 and 31: Trade News BP’s rail gantry compl
Page 32 and 33: Trade News New market, way forward
Page 34 and 35: 2011 Event calendar (*Recommended))
Page 36: 18651 Export 04/2011

April 2011 - Malnor

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?