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Fakhoury highlights Kingdom’s economic reform measures

By JT - Oct 11,2015 - Last updated at Oct 11,2015

Minister of Planning and International Cooperation Imad Fakhoury speaks during a panel discussion at the World Bank Group-IMF Annual Meetings in Lima on October 9 (Photo courtesy of Ministry of Planning and International Cooperation)

AMMAN — Jordan has been able to turn a crisis into an opportunity to ensure its survival amidst a volatile region, according to Minister of Planning and International Cooperation Imad Fakhoury, who highlighted the economic reform steps taken by the Kingdom.

Speaking at a panel discussion late last week at the World Bank Group-IMF Annual Meetings in Lima, Peru, Fakhoury also outlined the challenges facing the Kingdom.

“Our story is one of resilience and turning challenges into opportunities. With all honesty it was a question of survival, almost of life and death,” a ministry statement quoted him as saying.

“We’re one of the few countries in the Middle East that doesn’t have oil. We imported 96 per cent of our energy. So we started a diversification strategy in 2008. 

“By 2010, we adopted a law in energy efficiency so we set up the framework to implement the strategy. In 2011, the Arab Spring broke out and… Syria turned extremely violent. So we had Syrians moving to Jordan, about 20 per cent of our population. We also lost our gas supply [from Egypt] for electricity,” Fakhoury said at a panel that included public and private experts. 

Discussions focused on renewable energy and the pivotal role private finance can play. The session was moderated by Angus McCrone, chief editor of Bloomberg New Energy Finance.

Jordan’s government had to replace gas with diesel at five times the cost, Fakhoury explained. Facing that crisis kicked the country into high gear, he added. 

“The government went straight into a macroeconomic stability programme and made an arrangement with the IMF for a reform programme in the energy sector. We removed all subsidies on fuel products, offered incentives for hybrids and encouraged an aggressive diversifying approach.”

Kicking off the event, the International Finance Corporation’s executive vice president and CEO, Jin-Yong Cai, and Rune Bjerke, CEO of DNB, the largest financial services group in Norway, talked about the state of renewable, according to the statement. 

The money for renewable investments is there, Bjerke said, but he also emphasised that the infrastructure is not. 

“I think we should look more into the distribution systems: how to make the grids more accessible, how to invest in new technologies related to storage, how to take advantage of the tech revolution to put more emphasis to new, green energy sources,” he said.

But if infrastructure takes investment to build, investors want to see infrastructure already in place, according to the statement. 

“For an energy project to succeed on a larger scale, you have to have solid transmission and distribution networks. You have to have reasonable, clear… regulations so people know what they’re getting into,” said Cai. 

Also part of the discussion was Maja Wessels of First Solar — one of the world’s largest solar development companies. 

While solar energy is not expected to immediately power entire countries, she said, rapidly evolving technology — especially in storage — could see this change well before 2040.

Peru’s Minister of Mines and Energy Rosa Maria Ortiz Rios said renewables will play a major role in diversifying the country’s energy generation sources.

The panel agreed that “without renewable energy, we cannot end poverty by 2030”, the statement said.

 

“Renewable energy is the foundation of a modern economy,” said Cai.

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