Jordan's Attractiveness for FDI 2021

Foreign Direct Investment, or FDI, refers to investments made by a company or individual residing in one country in a company or asset in another country. It represents a significant long-term commitment to a foreign economy.

FDI is considered an engine of growth because it brings in new capital, creates jobs, boosts exports, improves technology transfer, and stimulates economic activity in the recipient country.

The UNCTAD World Investment Report, published annually, tracks global FDI flows and provides insights into major trends and challenges impacting investment.

The Global Opportunity Index, published by the Milken Institute, evaluates the attractiveness of 145 economies for international investors. It considers factors like business environment, economic fundamentals, financial services, institutional framework, and international standards.

The Global Opportunity Index assesses a country's ability to resolve business disputes, including legal and regulatory hurdles.

The Global Opportunity Index considers a country's economic outlook, workforce skills, and potential for future innovation and development.

The Global Opportunity Index measures a country's access to a variety of financial services, including banking, insurance, and capital markets.

The Global Opportunity Index analyzes the strength and effectiveness of a country's legal, regulatory, and governance framework that affects business operations.

The Global Opportunity Index assesses a country's integration into the global community and its compliance with international standards, signifying its trustworthiness and cooperation.

In 2021, Jordan ranked 79th out of 145 economies on the Global Opportunity Index, placing 7th among Arab countries.

The UAE (United Arab Emirates) topped the Arab economies on the Global Opportunity Index in 2021.

Jordan's ranking in 'Business Perception' was 103 out of 145 economies, placing 10th among Arab countries, highlighting the need for improvement in this area.

Jordan ranked 114th out of 145 economies in 'Economic Fundamentals', highlighting areas for improvement in factors like economic growth, workforce skills, and innovation.

Jordan secured 62nd place out of 145 economies in 'Financial Services', indicating a relatively strong standing, yet still room for development.

Jordan achieved 48th position out of 145 economies in 'Institutional Framework', demonstrating positive progress in the quality and effectiveness of its legal and regulatory environment.

In 'International Standards and Policy', Jordan ranked 70th out of 145 economies, indicating a reasonable level of compliance with global standards.

Jordan's biggest areas for improvement on the Global Opportunity Index are in 'Business Perception' and 'Economic Fundamentals', which need to be addressed to attract more FDI.

Some key variables in 'Business Perception' that need attention in Jordan include the cost of starting a business, labor regulations, tax rates, time needed to enforce contracts and resolve insolvency.

Some key variables in 'Economic Fundamentals' that Jordan needs to address include MSME (Micro, Small, and Medium Enterprise) density, government debt, total factor productivity, unemployment rate, and female participation rate.

Improving Jordan's ranking on the Global Opportunity Index by addressing the 'Business Perception' and 'Economic Fundamentals' weaknesses is key to attracting more FDI.

The cost to start a business in Jordan can be a significant obstacle to investors. Streamlining procedures and reducing bureaucracy can make it easier to do business.

Labor regulations, such as complex hiring and firing processes, can make it difficult for businesses to operate efficiently. Simplifying these regulations can make Jordan more attractive.

High tax rates can discourage investors from establishing businesses in Jordan. Lowering tax rates or offering incentives can attract more investment.

The time it takes to start a business in Jordan can be lengthy due to bureaucratic processes. Streamlining these procedures can attract faster growth and innovation.

The procedures for enforcing contracts and resolving insolvency in Jordan can be complex and time-consuming. Simplifying these processes can improve the business environment.

A high density of MSMEs (Micro, Small, and Medium Enterprises) indicates a more dynamic and entrepreneurial economy. Fostering a favorable environment for these businesses can drive growth.

High government debt can be a burden on the economy and make it less attractive for investors. Controlling debt levels is crucial for economic stability.

Total factor productivity measures how efficiently a country uses its resources, including labor, capital, and technology. Improvements in this area can boost economic growth.

A high unemployment rate can discourage investment, as businesses may be hesitant to expand if there is a lack of skilled workers. Job creation is essential for economic stability.

A higher female participation rate in the workforce can diversify the talent pool and enhance economic output. Promoting gender equality and inclusivity can attract investment.