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Time for Jordanian SMEs to reach international markets

May 27,2014 - Last updated at May 27,2014

On May 27, Jordan unveiled its National Export Strategy, which deserves to be lauded.

Jordan has in recent decades made huge strides towards bolstering its economy and engaging more actively with other markets — with its neighbours and beyond. That has yielded results.

Jordan is today one of the most open economies in the Arab region; many Jordanian companies already compete successfully abroad, with information and communication technology and the pharmaceutical sectors leading the way.

The commercial services sector, for example, has more than doubled the value of its exports in the past decade. That is an achievement that deserves praise.

Still, much more could be done to harness Jordan’s potential, and that of its people, to ensure more jobs and a more sustainable economic growth through exports.

Jordan is a country of small- and medium-size enterprises (SMEs). The country’s more than 100,000 SMEs make up around 97 per cent of all businesses; they are the country’s biggest employer and form the backbone of the economy.

But the majority of these enterprises are focused on the domestic market, given their limited international competitiveness. There is ample scope to better connect the services sector with manufacturing and agro-processing.

Cutting down red tape and making it easier for them to conduct business would help them spur job creation.

Currently, Jordanian women make up only 18 per cent of the country’s total labour force. The country could do better.

Its women are educated and skilled, so opportunities should be made available to them to nourish and use their knowledge and talent.

Efforts should also be exerted to enable Jordanian women to set up and run their own businesses. Only 4 per cent of working women are self employed, with less than 2 per cent actually employing staff.

World Bank figures suggest that the number of self-employed Jordanian women is decreasing. 

Policies exist in Jordan providing greater participation by women in business, but these numbers indicate that existing policies need to be better leveraged.

Making it easier for women to participate in trade makes economic sense, too. It can help boost innovation, increase competitiveness and promote economic growth.

Women entrepreneurs spend more of their income on their families and communities than men, channelling their money particularly towards their children’s education.

There is no doubt that women are a central piece of the puzzle for Jordan to unlock its economic potential.

The National Export Strategy that has been launched seeks to address many of these constraints. 

It is an instrument that will allow Jordan to focus its efforts on optimising gains from engagement of its enterprises in international trade.

The strategy aims to create a business environment more inclusive and conducive to trade, allowing smaller Jordanian companies — many of which are family owned — to become as much of a driving force as Jordan’s bigger companies.

Providing better trade and market intelligence, strengthening the institutions that help small businesses, improving SME trade competitiveness — through innovation, branding, investment in quality and many more — and adopting trade facilitating measures will be essential to help SMEs access international markets.

The strategy also sets out the need to address a national skills mismatch: Jordan’s workforce counts on a high proportion of skilled workers, yet unemployment among the more highly educated is high.

There is a need to better connect the labour market and the requirements of industry to create employment for the thousands of young people entering the labour force every year.

In today’s world, trade ministers’ best friends in Cabinet are education ministers.

Developing a National Export Strategy is always challenging, but the most challenging bit is what comes next.

The International Trade Centre has supported the Jordanian government in developing this instrument, but the work is far from over.

ITC will stand firm to help the government put the strategy into action so that more Jordanian agro-processed products find their way abroad; that paints produced in Jordan are used on houses across the Middle East; that Jordanian cables wire the world; and that other countries, too, can enjoy the benefit of the services that Jordanian businesses provide.

The writer is executive director of the International Trade Centre. She contributed this article to The Jordan Times.

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