Although Jordan, or what is termed officially as the “Hashemite Kingdom of Jordan” (Jordan), was formally established in 1921, it is quite rich in history as several civilizations have inhabited it, including the Persians, Greeks, Romans, Arab Muslims and others. Throughout history, Jordan has been at the crossroads connecting the continents of Asia, Africa and Europe.This mid-field position has benefited Jordan as a conduit for trade and communication, but at the same time has had its downside, especially in turbulent times.Jordan borders Syria to the north, Iraq to the north-east, Israel and Palestine to the west, and Saudi Arabia to the east and south. It has a land mass of 89 778 sq kms and a total population estimated in 2010 to be 6.32 million.
Jordan’s geo-political position has had major effects on its economic development. This is because the Jordanian economy has been influenced by the migration of people flooding to the country as a result of wars and the instability of the region. Jordan’s major natural resources are phosphate, limestone and marble. Minimal oil resources are available in the country, but have been mostly left untouched, as there are no huge commercial benefits in drilling, compared to other surrounding countries, such as Iraq and Saudi Arabia.
Jordan has limited agricultural land (12 %) as most of the land is desert (75 %) and the country suffers from a scarcity of water resources. Because of its poor natural resources, Jordan has relied heavily, and continues to rely heavily, on its human resources who are highly educated and skilled, compared to other human resources in neighbouring countries. Jordan is classified by the World Bank as a “lower income country”. Despite some economic growth since the latter part of the 1990s, and with more than 4% growth in 2000 and 2002 compared to 1% between 1996 and 1998, the country’s capacity for economic growth remains fragile.
After Jordan supported the Iraqi Saddam Hussein regime in its invasion of Kuwait, Jordan lost the support of the US and oil-rich countries including Kuwait, which expelled thousands of Jordanians working there, who then did not have any alternative, but to return to Jordan. This had a major effect on the economy and the limited resources of the poor country. To break out of this situation, Jordan embarked on economic reforms that started with the late King Hussein signing a peace treaty with Israel in 1995, and improving relationships with the US and other major powers. His son, King Abdullah II, continued the economic reforms and the development process that his father started.
As a result of joining the WTO, Jordan had to amend many of its laws, especially those of a commercial nature, to be compatible with international standards. The country was particularly interested in the development of its investments laws and wanted to make sure that these laws operated in a way so as to attract the widest possible number of investors to Jordan.
The Investment Law Promotion Law No. 16 of 1995 as amended regulates FDI in Jordan.The law offers non-discriminatory treatment and incentives in certain sectors of the Jordanian economy service industries such as IT, hospitals and others. Moreover, it designates certain locations in Jordan for investment promotion (industrial estates, development areas, free zones, and the Aqaba Special Economic Zone (ASEZ)), each of which has its own investment incentive scheme. The Jordan Investment Board (JIB), an independent body, supervises the smooth implementation of this law, and manages investment procedures for exemptions and benefits of inventors whenever applicable.