Willingness to Work: Evidence suggests that ‘willingness to work’ is low in labor-intensive sectors (Apparel and Tourism) at the low-skill jobs. Partly, this has been attributed to the high ‘reservation’ wages anticipated by potential workers, and the other part, is attributed to the ‘culture of shame’ that stops employment in certain sectors – male workers not seeking jobs in the apparel and tourism sectors. Around 61% of the local workforce in the apparel sector consists of females, creating gender imbalances due to the ‘shame’ aspect.
.Productivity: The analyzed sectors have reported low productivity of the local workforce. The reason behind productivity inefficiencies, as reported in the labor-intensive apparel and tourism sectors, has been due to the high absenteeism, low work ethics, and high turnover of workers. Furthermore, the little training and vocational education that local workers receive during their employment have magnified this problem. Findings show that the absence of training, not only include low-skill workers, but also extends to include high-skill jobs in the pharmaceutical and IT sectors.
. Brain Drain: This issue is exclusive to the high-skill jobs, especially, these in the pharmaceutical and IT sectors. Jordan suffers from the export of its qualified labor supply to countries in the region, which pay attractive packages. The main finding behind the brain drain in Jordan is due to the high quality of Jordanian workers after receiving their proper training in local firms.
B. INFRASTRUCTURE ISSUES:
Good overall infrastructure: When compared to comparable countries, Jordan ranks high on the overall quality of infrastructure. This has been evident from the findings and meetings with sector-specialists. However, each sector faces at least one area for further improvement. The tourism sector presents obstacles in the cost of power, local roads, and appropriate accommodation in regions. The apparel sector reported relatively high port costs and time needed to export/import, whereas, the business leaders in the pharmaceuticals sector report lack of laboratories facilities, especially, for the expensive bio-tech laboratories. Even though, the one source of ICT connectivity in Jordan is currently not problematic, future evidence suggest this will hinder potential growth and investment in the IT sector. These sector-specific infrastructure improvements are needed to further push competitiveness of these export-oriented sectors.
.Water: Jordan ranks one of the ten poorest countries in water availability. This constraint has been identified as a binding constraint through the Constraint Analysis for the whole economy. Hence, future availability of water constraints future growth prospects of economic sectors –such as dying in the apparel sector. Furthermore, water costs already impose high costs (reaching JD 1.75 per cubic meter) from untraditional sources, such as recycling in the apparel sector. In conclusion, future availability and high costs of water are eroding cost advantages that already exist in growth engine sectors in Jordan.
C. SMALL AND MEDIUM ENTERPRISES (SMES):
Access to Finance: Evidence from sectors suggests difficulty in access to finance, especially, to start-ups and SME’s. This, in turn, has resulted in low entrepreneurial and innovative activities, which are of critical importance for dynamic sectors such as the IT. Findings from the analysis attributes the difficulty for accessing funds are due to the lack of venture capital industry, lack of a Credit Information Bureau outside the commercial banking sector, and the high collateral requirements by the banking sector.
.Regulations impacting SME’s: The two main regulatory policies that have been identified that affects SME activities are the high start-up costs (as evident from the high minimum capital requirement to start a business) and the ineffective role that the “one-stop-shop” exhibits. For Jordan to attract more FDIs and encourage local DDIs, policy regulation needs to accommodate the needs of a developed and sophisticated business environment, especially, those regulations that stimulate start-ups and SME’s. International best practices show that both start-ups and SME’s are, usually, the biggest employer and contributor to the economy.
D.CHALLENGES WITH A NEW, COMPETITIVE, KNOWLEDGE-BASED ECONOMY:
Government Partnership: Even though Government has been active in the past couple of years in implementing partnerships with the private sector, however, the role is still weak and needs further upgrade. The companies in the pharmaceutical sector have reported low government incentives, such as tax holidays, to merge and be able to open new export markets. Furthermore, the management and disbursement of the R&D fund, which is collected through the R&D tax from all public shareholding companies, has been identified by the IT sector as a problematic issue. On a different scale, the government could actively engage with the private sector in promoting exports through active market intelligence and support trade and investment missions in Jordanian embassies.
III.CONSULTATIVE PROCESS
Jordan conducted a broad, participatory consultative process that included town hall meetings in each of the country’s twelve governorates.
The MCA-Jordan consultative process aimed to build upon the “lessons learned” from previous experiences with participatory processes and public consultations. In particular, MCA-Jordan aimed to:
• Create more ways for average citizens to provide feedback, including such typically marginalized groups as women, the poor, and citizens outside the capital city, Amman, by holding national workshops in all 12 governorates to reach all societal groups.
• Expand opportunities for civil society participation; whether during workshops or in the later stages with focused groups.
• Develop stronger feedback loops and communication bridges to help address the feeling that “the government asks my opinion but then never follows up. By providing information on updates on MCA-Jordan’s website, and MCA-Jordan’s e-mail, also different promotional and informative material, in addition to selected follow up committees.
• Taking into account lessons learned, listening to all involving societal groups, in assessing current situations, and identifying challenges that hinders economic growth.
For more information, please see these reports:
• Consultative Process Report
• Consultative Process Work Plan
IV. CONCEPT PAPERS AND CONCEPT PAPER ASSESSMENT
BACKGROUND
The government of Jordan established an MCA unit at the end of 2007. This MCA unit completed a Constraints Analysis and Sector Analysis the following spring and held broad, public consultations comprised of large, town hall style meetings in each of Jordan’s twelve governorates over the succeeding summer. Together, these inputs pointed toward a focus on water sector.
In July 2008, the MCA unit hosted a results-focused project design workshop with key water sector stakeholders to discuss how best to maximize the efficient use of the available water resources, given the considerable political sensitivities around the use of this resource. In close cooperation with a working group from the Ministry of Water and Irrigation (MWI), the MCA unit began work on a single concept paper outlining four investments designed to reduce non-revenue water and expand the collection, treatment and re-use of wastewater. The investments focused heavily on Zarqa Governorate, one of Jordan’s poorest governorates, located adjacent to the capital city, Amman.
The concept paper was endorsed by an Advisory Group that includes representatives from key civil society groups, academic institutions and other bilateral donor organizations and was approved by a Steering Committee chaired by Prime Minister Nader Dahabi prior to submission.
STRATEGIC CONTEXT
Jordan is the world’s fourth most water poor country, with average consumption only 100 liters (26 gallons) per day, one-tenth the average in neighboring Israel or in the United States. Rapid population growth, urbanization and rising standards of living put the country’s water resources under severe strain, with municipal water demand tripling over the past 50 years. Total demand for water exceeds available supply by some 580 million m3, and current deficits are covered by “mining” groundwater aquifers beyond their sustainable yield. The Disi aquifer and desalinated Red Sea water are the only major potential sources of water supply not already developed.
Given this situation, Jordan’s Constraints Analysis report concluded that, “The future availability of water … is a critical issue requiring immediate attention. Although scarce water is not currently a significant growth constraint improving the availability of water for domestic and other industrial uses [is] a priority area for further problem definition.”
PROPOSED INVESTMENT PROGRAM
The concept paper presents the proposed investments in two investment packages, as follows.
Investment Package 1: Non-Revenue Water Reduction and Improved Operations Efficiency
Project 1 (P1): to reduce high levels of non-revenue water in Zarqa and Ruseifa and achieve improved operations efficiency by:
1. Rehabilitating existing wells and pumps at water sources to improve energy efficiency and reduce water loss;
2. Converting the transmission and distribution network from high pressure to gravity-fed supply;
3. Upgrading parts of the tertiary distribution system and household connections; and
4. Implementing a Management Contract for Zaraqa Governorate.
Investment Package 2: Wastewater Collection, Treatment, and Reuse
Project 2 (P2): to expand and rehabilitate the Zarqa wastewater network by:
1. Rehabilitating and upgrading trunk sewer lines that are reaching capacity; and
2. Extending lateral sewer lines to populated areas that are not presently connected to the wastewater collection system.