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Economist Magazine
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on retail banking have seen a marked improvement in access to financing, both
for consumers ind local businesses. Now, local banks are focused on market
consolidation, while at the same time developing a wider range of products
and introducing more efficient and modern banking technology'
Jawad Hadid, C"hief Executive of lordan Commercial Bank, says that Jordan's
banks have also benefited from the continuous increase in economic activity
and cross-border capital inflows since lordan began on its privatisation program
a decade ago. "0vei the past five years we have seen deposits grow by about
40 %, with" a doubllng in credit'facilities," says Plr. Hadid, adding: "This
An island of stability in a troubled region Jordan is benefiting from the
ambitious agenda of the government of King Abdullah ll. 0ver the last decade
sustained fdreign direct investment (FDl) has driven the economy, resulting
in average GD[growth since 2000 of 6 percent. FDI has doubled-every year
since 20b4, rea-hing $3 billion for 2006. The Jordan lnvestment Board says
that FDI growth for lOOl was 200 percent. Key sectors attracting investment
are consiruction, real estate, tourism, pharmaceuticals, textiles, automotive
parts, and mining. Growing numbers of investors are also locating in the
country's Qualifying lndustriil Zones, Free Zones, and industrial estates. "Jordan
is on the move, says Gerhard Mansbart, General lvlanager of the Meridien
Hotel, in the heart of the capital's business district: "There isabuzz here that
reminds me of Abu Dhabi in the I 980s. New projects are springing up
everylvhere", he adds.
A sound and transparent financial sector Jordan's economy is built on
the twin rocks of judiclous supervision by the authorities and a strong banking
sector - as point"ed out by a recent IMF report that highlighted the central
bank's prudent monetary lrolicy, the healthy foreign exchange market and an
appropriately valued Jordaniandinar The country's I5 domestic commercial
airb tslamic banks and eight foreign banks are well capitalised at more than
20% of assets, while the country is introducing Basel ll capital adequacy
regulations this month that will further strengthen risk management capabilities
and ensure good corporate qovernance.
0ther rec"ent refoims to t"he banking sector have been the introduction of
new financial instruments which, along with increased competition and a focus
lordan and 3 in Palestine. Jordan's bourse has also been attracting billions
of dollars of Arab capital seeking a safe haven in a region of political turmoil,
says lalilTarif, Chief Executive oithe Amman Stock Exchange (ASE), pointing
oui that inflows from regional investors have contributed to a tripling of the
bourse's market capitaliiation since 2003 to $32.4bn. "Economic, legislative,
and structural reforms have been executed with profound care and the
restructuring of the capital markets created a sound and transparent environment
which proteits investors," says Mr. Tarit A new financial centre to be completed
by 2009 will strengthen the ;bility of the ASE which is already linked to the
London Stock Exc6ange to compete with bigger Arab Gulf financial centres
by attracting funds arid listings of Arab firms. "The ASE is committed to the
piinciples of fairness, transparency and efficiency,
Thi: Exchange seeks to provide a strong and secure environment for its
listed securitie; while protecting and guaranteeing the rights of investors,"
says Mr. Tarif, he adds that the absence bf any restrictions on foreign ownersh.ip
his increased the percentage of equity owned by nonJordanians to over 46
% of the market's toial market capitalisation compared with
38 % in 2003.
means that the bankingsector is providing thenecessary funding forJordan's economicactivity."Over the last year,
JCB has begun transforming
its branches into what he
calls points of sale, which
specialise in providingconsumer credit andsoliciting deposits. The bank
now has 27 branches in
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