Jordan gains 15 places in 'doing business' world report

AMMAN — Jordan was ranked 10th in the region on the ease of doing business in the "Doing Business 2018: Reforming to Create Jobs" report published by the World Bank Group on Tuesday.

The encouraging regional rank, which increased by 2.38 percentage points compared to 2017, contrasted with Jordan's position internationally, which stood at the 103rd rank out of 190 economies.

“All in all, Jordan’s position is not that good but it has definitely witnessed an improvement. We gained 15 ranks since last year’s report [Jordan was ranked 118th in 2017] which means that the government has worked hard to improve the criteria,” economist Jumana Ghneimat told The Jordan Times in a phone interview.

"Doing Business 2018" looked at domestic small and medium-size enterprises (SMEs) to compare business regulation environments across economies and over time with the aim of encouraging economies to compete towards more efficient regulation, according to the report.

Divided into subnational and regional level analyses, the report covered 11 indicator sets including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Jordan stood above the regional average of 115, coming after the UAE, Bahrain, Morocco, Oman, Qatar, Malta, Tunisia, Saudi Arabia and Kuwait. The Kingdom topped Palestine, Iran, Egypt, Lebanon, Djibouti, Algeria, Iraq, Syria, Libya and Yemen. 

While the report pointed out the fact that it takes less time and human resources to start a business in Jordan than in the region, it showed that the costs incurred in the process are above the regional average, with 24.2 per cent of income per capita required, compared with 18.8 regionally.

By analysing 190 economies and selected cities across the globe through comprehensive quantitative data, the report examined the regulations applied to SMEs through their life cycle to “uncover red tape and road blocks” they face.

“I believe that we need to exert more efforts to keep improving our situation, especially regarding the indicators to make the decision to invest or not. The legislation, including the tax law and the investment law, should ensure the protection of investors, who are key to the improvement of our economic state,” Ghneimat said.

The report listed a number of strengths displayed by the Jordanian economy, including the ease to get electricity, to register a property, to trade across borders and, to a certain extent, to pay taxes.

However, the country ranked rather low on the easiness level to get credit, to protect minority investors, to resolve insolvency, to enforce contracts and to deal with construction permits.

“In the last three years, law enforcement has been unstable. People have been trying to circumvent the law to their own advantage and we really need to work hard to change that,” the economist stated, calling for a change in citizens’ mentality towards the business environment.

“Although the Mulki government has been exerting great efforts to enforce these laws, we still need to convince people that investments are central to solving the problems we face such as unemployment and poverty, among others,” she highlighted.

The Kingdom’s economic environment witnessed improvements in four indicators, and minor deterioration in four others since last year’s report.

New Zealand, Singapore, Denmark and Korea reached the top of the list, while unstable countries like Yemen, South Sudan, Venezuela, Eritrea and Somalia were cited as the least friendly business environments. 

Overall, the report found that economies in all regions of the world have been implementing reforms to ease the process of doing business, with 264 business reforms documented worldwide.