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JIC mulls national investment fund prospects

By Bahaa Al Deen Al Nawas - Nov 19,2019 - Last updated at Nov 19,2019

AMMAN — Jordan Investment Commission Chairman Khaled Wazani has announced that he will lead a team from the commission to study the prospects for establishing a national investment fund. 

Financial experts believe that, with several factors in place, the creation of the fund would be a “step in the right direction”.

Prime Minister Omar Razzaz has tasked the commission to start the review under Royal directives. 

According to economist Husam Ayesh, a national fund can be assessed on its ability to improve the economy in spite of internal and external factors.

If the fund resorts to borrowing to establish projects, the results might not be as envisioned, he added.

Factors involved in determining the utility of the fund include the source of funding, which decides how it will operate, in addition to the question of who will own the fund, the economist said.

The fund could be co-owned by the government and the private sector, or only owned by the government, he told The Jordan Times on Sunday over the phone.

Previous experiences of funds run by the government show that there is a need for “firm” measures to be taken in the interests of the Kingdom, directing the economy towards growth on the one hand and having a positive impact on the livelihood of citizens on the other, he said.

Ayesh noted that if the government's revenues increase, it will help reduce taxes and debt, and if the fund had this purpose, it would be a “step in the right direction”.

"The location of the fund's investments is important; if they are in Jordan, it could compete with the private sector and the social security fund investments in a small market... it is important to look for promising investment opportunities that the fund can be involved in," the economist said.

He continued that this leads to the question of the size of the investments the fund is designated for and which sectors it would focus on, noting that some countries utilise their investment funds in certain fields, while others invest in all sectors.

In all cases, a feasibility study for the fund should be carried out to avoid past mistakes, he said.

Ownership, location and sectors of investments and the source of funding are factors that must be made clear before envisioning a roadmap for the fund, according to the economist.

Citing past failures, economist Mazen Marji said that the new fund should be run by experts, who “can deliver results”, without relying on the money of the Social Security Corporation fund; the money that belongs to the citizens and their pensions.

Marji noted that if banks want to use their own money and that of their stakeholders, after obtaining approval, it could be a fund that brings revenues; since banks have guarantees that protect them against possible losses.  

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