Jordan's Attractiveness to Investors 2021

Foreign Direct Investment (FDI) is a long-term investment by a company or individual in one country (the source country) into a company or asset in another country (the host country). It usually implies a controlling interest in the business, and the investor wants to manage the asset or company.

FDI is considered an engine of growth and development because it brings in capital and resources, creates jobs, boosts exports, improves human capital, and helps transfer technology.

The Global Opportunity Index, published by the Milken Institute, assesses the attractiveness of 145 economies for international investors. It analyzes five main categories: business perception, economic fundamentals, financial services, institutional framework, and international standards and policy.

Among Arab economies, the UAE tops the Global Opportunity Index, while Yemen ranks last.

The UAE ranks 33rd on the Global Opportunity Index, which is the highest among Arab countries.

Yemen ranks 141st on the Global Opportunity Index, the lowest among Arab countries.

Jordan ranks 79th globally on the Global Opportunity Index, placing it 7th among Arab countries.

Business Perception measures how easy it is for businesses to operate in a country, considering factors like resolving disputes and regulations.

Jordan ranks 103rd in 'Business Perception', placing 10th among Arab countries.

The 'Economic Fundamentals' category assesses a country's macroeconomic health, workforce talent, and potential for future growth.

Jordan ranks 114th in 'Economic Fundamentals', placing 10th among Arab countries.

The 'Financial Services' category examines a country's access to and quality of financial services.

Jordan ranks 62nd in 'Financial Services', ranking 7th among Arab countries.

The 'Institutional Framework' category assesses how well a country's institutions support or hinder business activity.

Jordan ranks 48th in 'Institutional Framework', ranking 4th among Arab countries.

The 'International Standards and Policy' category assesses a country's integration into the global community and its compliance with international standards.

Jordan ranks 70th in 'International Standards and Policy', placing 7th among Arab countries.

Jordan's ranking in 'Business Perception', 'Financial Services', and 'International Standards and Policy' has remained relatively stagnant, with 'Business Perception' showing significant room for improvement.

Jordan's ranking in 'Institutional Framework' has greatly improved, while 'Economic Basics' still needs significant attention.

Jordan's overall Global Opportunity Index ranking can be improved by focusing on the variables contributing to 'Business Perception' and 'Economic Fundamentals'.

Simplifying the process of starting a business, addressing concerns about labor regulations and tax rates, and reducing time and cost associated with legal procedures can contribute to a positive 'Business Perception' score.

Factors like increasing the number of Micro, Small, and Medium Enterprises (MSMEs), controlling government debt, boosting productivity, decreasing unemployment, and promoting women's participation in the workforce can improve 'Economic Fundamentals'.

By focusing on key variables in 'Business Perception' and 'Economic Fundamentals', Jordan can increase its appeal for FDI, potentially leading to greater economic growth, employment, and social development.

The variables related to 'Business Perception' include elements like the cost of starting a business, labor regulations, tax rates, time needed to start a business, contract enforcement, insolvency, and the time to resolve disputes.

Variables related to 'Economic Fundamentals' include factors such as the density of MSMEs, government debt, productivity, unemployment rates, and female labor force participation.

The goal of improving Jordan's Global Opportunity Index ranking is to attract more FDI, which can lead to accelerated economic growth, job creation, and improved social development.

Jordan's Global Opportunity Index ranking is a valuable indicator of the country's attractiveness to international investors, highlighting areas for improvement and potential for economic growth.