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Jordan: the Business Gateway to Iraq

In the presence of Prime Minister Nsour and at the invitation of Capital Bank

WEF-picture1Prominent Jordanian and Iraqi businessmen discuss opportunities to promote the commercial cooperation between the two countries during the World Economic Forum

Jordanian exports to Iraq have increased by 49.5% during the first quarter.

Prominent Jordanian and Iraqi businessmen met during a working session organized and hosted by Capital Bank during the World Economic Forum on the Middle East and North Africa, titled “Jordan: the Business Gateway to Iraq”, and was attended by Jordan’s Prime Minister Abdulla Nsour, the Royal Court Chief, the economic ministerial team which included the Minister of Finance, the Minister of Industry and Trade, the Minister of Energy and Mineral Resources and Iraq’s Deputy Prime Minister Saleh Al-Mutlaq.

The two parties discussed several vital economic and commercial issues, most importantly, the opportunities to promote cooperation between the two countries, in addition to cooperation with Jordan via its territories in order to expand the role of the Arab business sector in Iraq, which is considered to be one of the world’s fastest-growing economies, particularly in the energy, financial services, information technology, telecommunication and real estate sectors. Besides that of Prime Minster Nsour, Bassem Al-Salem, Chairman of Capital Bank, and Azzam Alloush, a prominent Iraqi figure, both delivered speeches.

During the meeting, Prime Minister Abdullah Nsour stated that “In the past decade, the Kingdom has sought to capitalize on its strategic location, security, distinguished bilateral relations with different countries of the world, free-trade agreements and educated workforce in order to position itself as a business gateway with access to markets across the MENA region, reaching over one billion consumers worldwide”. He also added that Jordan has taken the initiative, prior to the Arab Spring, to implement several political and economic reforms, represented by constitutional amendments and a new electoral law. However, economic challenges still exist in light of the global economic crisis and the prevailing political circumstances. Furthermore, he added that Jordan has adopted a development policy to overcome the declining growth rate, which currently stands at 3%, through implementing a four-year economic and fiscal reform program, supported by the International Monetary Fund, and with the objective of reducing the budget deficit to reach 3.5% by 2015.

He added that the Kingdom has continued to work on improving the local business environment through multiple programs in cooperation with the World Bank, OPEC and other international agencies in order to facilitate financing small and medium enterprises (SMEs). Although SMEs constitute 95% of registered companies in Jordan, they only receive 10% of the total credit facilities provided by banks in Jordan, which is what we seek to develop due to SMEs’ important role in national economic growth. He also noted that Jordan’s competitiveness is contingent upon a robust financial system that facilitates business and includes sound legislations in line with international standards.

He also stated that in light of the prevailing circumstances and the measures the Kingdom is taking to overcome economic challenges, we seek, in cooperation with partners and friends, to turn these challenges into opportunities that reflect positively on our national economy, emphasizing the important role the private sector plays in this regard. This is reflected in today’s session, which focuses on the relationship with Iraq, the Kingdom’s second largest commercial partner.

On the other hand, Bassem Al-Salem, Chairman of Capital Bank, stated that “this meeting reflects the Bank’s role in seeking forums that bring together the private sectors of both countries.” He also added that based on that, the Bank has sought to be the first and only Jordanian bank in Iraq through its acquisition of a majority stake in the National Bank of Iraq and a strategic partnership that began in 2004.

“The main objective of these continuous meetings organized by the Bank is to facilitate and promote commerce and business activities between the two countries based on their close historic relationship, as we believe that both countries offer vast opportunities in most economic sectors.” He also emphasized the importance of exchanging ideas and opinions in order to apply best practices for the development of joint projects between the two countries. As there are great investment opportunities, we need to utilize regional expertise and partnerships in order to achieve the desirable level of success, since Jordan possesses extensive experiences, which are considered valuable resources for the region and makes it a vital gateway to a number of projects in Iraq.

Al-Salem also noted the importance of linking technical skills, financial consultancy and decision making to ensure the development of the necessary legislations and its timely execution, which in turn supports investments. He also emphasized the importance of promoting meetings between both sides in a continuous manner.

He also added that Capital Bank intends to seize more economic opportunities between the two countries, noting a significant increase in Jordanian exports to Iraq, which grew by 49.5% during the first quarter of this year, compared to the same period last year, and thus constituting 16% of Jordan’s total exports, surpassing exports to any other country.

Al-Salem also added that Jordan represents a key partner for Iraq, which includes the implementation of major infrastructure projects such as the Basra-Aqaba pipeline, where Jordanian engineers and contractors work on large projects in Iraq, highlighting that the mutual sharing of experiences between both parties contributes to developing both manpower and legislations.

Al-Salem noted the characteristics that make Jordan a hub for commerce with Iraq and the region as a whole. Jordan hosts more than 500,000 Iraqis, who invest in more than 10,000 business activities in the Kingdom. Furthermore, the qualified Jordanian human resources in various sectors such as healthcare, information technology, engineering and infrastructure could also create direct investment opportunities for Jordanians in Iraq as well as indirect opportunities since Jordan is a gateway to Iraq.

Capital Bank is considered to be the fourth largest bank in Jordan in terms of capital as well as the only Jordanian bank that is present in Iraq, in cooperation with its Iraqi partner, the National Bank of Iraq.

Alloush emphasized the depth of the historic Iraqi-Jordanian commercial relations and the importance of advancing and building on them. He also emphasized Iraq’s capabilities and its role in achieving economic progress in the Middle East.

He added: “Iraq is proud of its partnership with Jordan, with whom it has an extensive history and a distinguished relationship, in addition to its proximity to all major Iraqi cities. Moreover, Jordan has the potential to become a hub that attracts multinational corporations, working alongside Iraqis and Jordanians, where they can run their businesses from Jordan and operate in Iraq. This applies to most sectors, which enables us to capitalize on existing Jordanian competences along with international expertise to expedite the development of Iraqi skills and projects.”