Sunday, November 14, 2010
ΟΡΓΑΝΙΣΜΟΣ ΙΣΛΑΜΙΚΗΣ ΔΙΑΣΚΕΨΗΣ: ΝΕΟΘΩΜΑΝΙΚΗ ΑΝΘΕΛΛΗΝΙΚΗ ΣΤΡΟΦΗ
Thursday, November 11, 2010
Jordan-EU Action Plan. An Evaluation on Monetary, Exchange Rates and Fiscal Policies
By Antonia Dimou
The aim of the Jordan-EU Action Plan is to consolidate progress in macroeconomic stabilization and growth policies through mechanisms such as implementing a national macroeconomic stabilization program and to consolidate achievements with regards to price stability, strengthening banking regulations and supervision, lowering public debt and fiscal stability and continue policies for achieving a sustainable fiscal and pension system.
Jordan has made a significant effort to reduce the budget deficit, although this reduction was made possible mainly through grants and donor’s assistance. Because of the rise in global oil prices, a country like Jordan with minimal resources remains largely dependent on international support.
Today, Jordan has survived the global economic crisis as the Central Bank played a significant role to ensure the safety of the banking system while maintaining monetary stability.
The Central Bank of Jordan stresses the capital adequacy. Setting 12% as a percentage for capital adequacy has preserved the banks from any financial problems and led to a zero percent probability of bankruptcy. The world standard for capital adequacy does not exceed 8%; however, Jordan has used a conservative banking system in order to save its banks, based on the experience with problems that certain Jordanian banks faced in previous periods.
Jordan has continued its progress in enhancing the investment climate and developing its privatization programs. An Investment Promotion Law was approved in 2006 to contribute to investment regulatory simplification.
According to statistics, investments benefiting from the Investment Promotion Law increased in 2008 to reach JD 2.268 million compared to JD 2.221 million in 2007. Also, JD 310.7 million of investments in special development zones can be added to the total investments of 2008. EU investments in Jordan favored from the Investment Promotion Law for the period from 1996-2008 amounted to JD 705,234.696 whereby, 44% of these investments were industrial.
On the issue of Money Laundering, Financial and Economic Crime, 2007 witnessed the birth of the Anti-Money Laundering Unit under Law No. 46. According to Dr. Ummaya Toukan, Governor of the Central Bank and Chairman of the Anti-Money Laundering Committee, the unit commenced with executing its mandate efficiently in 2008, and its main duty is technical with regards to tracking money laundering and providing competent local authorities with information when needed.
Between 18 June 2007 and 18 July 2008, the Unit received 81 notifications of suspicious transactions, of which 68 notifications were submitted by banks, 9 from monitoring bodies, 3 from exchange bureaus and 1 from a financial corporation. These cases would not have been received by the Unit had it been part of the Central Bank.
Monday, November 8, 2010
Investment Incentives in Qatar
The Pear Qatar Got a Massive Boost
(Photo from:http://internationalpropertyinvestment.com/qatar-investment-property)
According to the Qatari investment law, foreign investors are allowed to invest in all national economy sectors provided that they have a Qatari partner who has a share of at least 51% of the capital of the joint venture and that the company is duly established in accordance with the provisions of the Qatari law of commercial companies.
However, the shareholding of foreign investors in joint ventures can surpass the limit of 49% and reach up to 100% of the capital in selected sectors such as agriculture, industry, health, education, tourism, development of natural resources or energy and mining, on condition that the projects in question are in line with the country's development objectives, are export oriented, introduce new products, use new technologies and seek to introduce industries with international fame.
The General Privileges for Foreign Investors revolve around the freedom to import and repatriate funds and the freedom to transfer profits and assets as well as exchange money at stable rates.
Some of the General Incentives for Investments focus on:
(a) The right to import the materials and equipment required for the establishment, operation or expansion of projects.
(b) A10-year exemption from income tax effective from the date of commercial commissioning of projects.
(c) Duty-free imports of equipment and machinery required for projects.
(d) Duty-free imports of raw and half manufactured materials needed for industrial projects and not available locally. Other Privileges include: (a) Providing suitable land sites in industrial estates for industrial projects at reasonable lease rates and long lease terms. (b) Assisting the licensed industrial projects to get loans from the Qatar Industrial Development Bank and other finance establishments. (c) Providing the project with power, fuel, water and natural gas at competitive prices. (d) Flexible regulations and procedures to import workforce for industrial and other investments.
(e) Settling investment disputes through commercial arbitration, courts of justice or Shari'a courts in the country, whichever individual cases fall within the jurisdiction thereof.
Tuesday, November 2, 2010
International Energy Development Initiative

By Antonia Dimou
The heart of the new global institution would be the private, public and corporate investors of the IEDI who would engage in research, development and ultimate manufacture and marketing of alternative energy sources. Shares of the IEDI would be bought by governments, corporations and individuals in a unique international entity.
The result would be an international consortium dedicated to developing alternate energy sources worldwide. For the EU, the US and Asia, the success of this initiative would mean a global partnership for proliferating sources of energy rather than competition for relatively static energy supplies. For producers, it would mean a major step toward diversifying and broadening their national assets beyond reliance on oil alone. In this organisation, in which participants will act as stakeholders and investors, members would have every incentive to continue to participate lest they be left out of the advances the initiative was developing and promoting.
Wednesday, October 27, 2010
Creation of a West Asian Forum: Asia-Gulf Business and Security
The Middle East is deeply integrated into the Asian supply chain, and is thus a core element in
Thus, an Asian security agenda in the Gulf needs to be aligned along four main tenets, according to a report released by the Center for Middle East Development, UCLA. The “hot spots”: Promote regional security by concentrating on “hot-spot” issues, including the situation in
Recent proposals focus on the creation of a West Asian Forum (WAF) as one way to pursue the objectives enumerated by the “four-point plan.” Such a regional body would promote trade and investment between
The forum would be two-tiered. On one level, the financial architecture of free trade and investment would be discussed, in the context of security. On a second, yet parallel, level, the forum would act as a platform to promote technology and investment innovation. The emphasis on this level would be idea generation. The spirit of the forum would be cooperation - which is not only desirable, but also unavoidable.
Taken together, these recommendations can add value to the economies of both Asia and the
Saturday, October 23, 2010
Proposed Gulf Economic Cooperation Council (GECC) Central Bank
(Photo From: malaysiainfocus.com)
By Antonia Dimou
Each of the countries in the Gulf Cooperation Council (GCC) has a central bank with established monetary arrangements with each other in recognition of their common interests. However, current government surpluses in the region coupled with projected increases for the foreseeable future are creating undue pressure on the real estate and stock markets.
Additionally, limited investment opportunities within each state restrict the opportunity to create new jobs and to further diversify the economies of the region.
To this end, a regional, or possibly a GCC central bank, much like the US Federal Reserve in Washington DC, could be established to serve as a common forum and meeting place for the existing central banks, which would continue to have the same functions and accountabilities as they now possess.
A regional central bank would serve as a common forum and meeting place for the region’s existing central banks, leaving the existing banks to continue performing their current functions and maintaining the accountabilities that they now possess. A monthly digest could be assembled, and the new mechanism would facilitate a common GCC currency initially planned for 2010 but the deadline was abandoned earlier this year.
The Gulf monetary union project, designed to emulate the euro zone, has been delayed by old political rivalries as certain states are concerned not to give too much sway to Saudi Arabia, the largest Arab economy and the world's top oil exporter.
On March 30, 2010, the Saudi central bank chief was named to head a Gulf monetary council underlining the Kingdom's dominance in a single currency project and reducing prospects for the United Arab Emirates and Oman to return.
The UAE, the world's third largest oil exporter, withdrew from the project in May 2009 in a protest to place the monetary council in Riyadh, three months later Oman followed suit. Muhammad al-Jasser, head of the Saudi Arabian Monetary Agency (SAMA), will be the first chairman of the joint monetary council, a forerunner for a regional central bank. A recent Reuters poll however, showed that Gulf states are not seen adopting a common unit until 2015.
* Reproduced by Middle East Observer, Issue 2 Vol. 1, April-May 2010
Friday, October 22, 2010
Creation of an OPEC-like Group of Natural Gas Exporters
By Antonia Dimou
The notion by
A pipeline and requisite infrastructure to connect countries in the Gulf to areas of consumption either in the Far East or
It is undoubted that
The question that has to be answered is; “Why is that?”
First, unlike oil, which is traded on an exchange that constantly updates the market price based on supply and demand, gas is sold under tight contracts that allow buyers to lock in prices for at least up to 25 years. That said, a cartel would likely have little impact.
Second, pipeline infrastructure requires high-cost investment, which usually makes long-term contracts necessary.
Third, liquified natural gas could be traded as a commodity similar to oil, but at some other point and not in the instant future.
Based on the above, the conclusion that can safely be reached is that the recent announcement by
* Reproduced by Middle East Observer, Issue 2 Vol. 1, April-May 2010
Wednesday, October 20, 2010
Foreign Investment in Oman
by Antonia Dimou
Oman, the source of two-third of the world's oil exports, is in the middle of the East-West trade routes, ensuring easy access to markets in the Middle East, India, South-East Asia, Africa and Europe. The Sultanate is considered ideal for long-term investments as it posses a modern infrastructure, a strong industrial base, a stable government, and, most notably, the institutions that protect and favour foreign investment.
Oman’s membership in the World Trade Organization (WTO) ensures its adherence to international trade norms and practices, while its participation in the Indian Ocean Rim Associations for Regional Cooperation (IORARC) opens up a potential market of over 1500 million consumers. Additionally, membership in the Arab Gulf Cooperation Council ensures duty-free export of products within the Council’s member countries.
Oman offers a number of incentives that guarantee foreign investment. Major incentives focus on: provision of soft loans with low interest rates and easy payback periods; full repatriation of capital, net profit and royalties; up to 100% foreign ownership; exemption from customs duty on import of plant equipment; credit insurance through export; no personal income tax; relief from customs duty on raw materials for up to 10 years; corporate tax holiday of up to 10 years.
Foreign investors are assured of a reliable infrastructure that includes, among others, industrial estates and access to capital. Specifically, eight industrial estates, with another underway, provide complete support systems to industry in different parts of Oman. These estates offer a comprehensive range of services that could extend to their own gas-fuelled power stations and water supply, and housing complexes for the workforce.
The industrial estates in the Sultanate are eight namely Al Rusail, Sohar, Raysut, Nizwa, Sur and Al Buraimi, in addition to the Information Technology Industry Estate, Knowledge Oasis Muscat (KOM) and Al Mazyounah Free Zone, which aim to attract foreign investment, nationalize national capital, enhance the private sector, introduce new technology and promote international trade.
Additionally, the Sultanate’s well-organized private banking sector provides a wide range of financial services and credit facilities to investors. The Industrial Bank of Oman offers advisory services and considers equity participation in industrial projects. Also institutions like the Oman Development Bank channels government funding to help the private development of the economy and offers soft loans to small-scale industries and the service sector. Muscat Securities Market, the established and regulated stock market, is a potential source of new capital for the private sector, helping investors raise capital for the expansion of current projects and for the initiation of new ventures.
Setting up business in Oman is mainly facilitated by the Omani Centre for Investment Promotion (OCIPED) which provides services for new investment projects in the Sultanate. OCIPED was established to provide investors with the information and much needed practical help with the form of feasibility studies, of setting up operations and identifying export markets for finished goods.
At the same time, OCIPED coordinates with a number of agencies of importance to foreign investors such as the Ministry of Commerce and Industry, the Oman Chamber of Commerce and Industry, the Oman Development Bank, the Export Guarantee and Financing Agency, the Public Establishment for Industrial Estates, the Muscat Security Market, the Commercial Court, and the Ministry of Social Affairs, Labour and Vocation Training.
Thursday, October 14, 2010
INTERVIEW with Ambassador Itamar Rabinovich
Conducted by Antonia Dimou
What is your view of the new Turkish foreign policy as promoted by Foreign Minister Ahmet Davutoglu, particularly in regards to Turkish-Israeli and Turkish-Syrian relations?
The notion of improving
The question has in fact been answered above. In the give and take between the two governments both sides committed tactical mistakes that aggravated the negative trend.
How do you think that the advanced state of relations between
On May 2008,
All three parties to the 2000 effort share the blame. In my view, the single most important reason for the failure was al-Assad's illness and imminent death. Physically, mentally and politically he was weakened and he preferred to use his residual power in order to secure his son's succession.
This is, indeed,
And do you see any immediate prospects for Syrian-Israeli reengagement on peace talks? Is an agreement, or are negotiations, with
I do not. I think the current priority of both the
The recent nomination of Robert Ford as the
It was part of the
From your experience, what are
* Ambassador
Monday, October 11, 2010
Jordan Pursues Peaceful Nuclear Program
By Antonia Dimou
The Jordan Atomic Energy Commission (JAEC) recently announced that the Kingdom will not concede its rights to develop its peaceful nuclear programme in line with international standards, and indicated that Jordan will not follow the route of the UAE, under which the Gulf state conceded the right to engage in enrichment or reprocessing activities in return for cooperation from the US. Also, the JAEC clarified that the government will not sign any agreement that is prone to compromise its rights as enshrined in the Nuclear Non-Proliferation Treaty (NPT).
The JAEC is currently examining four offers from nuclear technology suppliers, namely Canada, South Korea, Russia and an offer from a joint French-Japanese venture (AREVA and Mitsubishi Heavy Industries), and by the end of April 2010, the JAEC was to qualify two of the offers and spend the next year negotiating with the short-listed companies to select the winning bidder.
Jordan has close cooperation with four of the “big five” nuclear powers namely Russia, the UK, China and France, and discussions are underway to sign a nuclear cooperation agreement with the US. Jordan is on pace to construct two 1.000-megawatt Generation III reactors in the next 15 years in order to transform the country from an energy importer to an electricity exporter. The Kingdom’s first nuclear reactor, slated for a site near Aqaba, is expected to be constructed within the next decade.
Under a mining agreement signed on February 21, 2010, the French company AREVA is obligated to provide the Kingdom with its needs of enriched uranium, and mining activities will commence in central Jordan as early as 2012. This is the first uranium mining agreement and one of the largest contracts ever signed in Amman, which forms the first phase of Jordan’s domestic nuclear power programme.
As prerequisite to several regulations to govern the nuclear sector, the Jordan Nuclear Regulatory Commission (JNRC) established in 2007 is in the final stages of reviewing the new Law on radioactive safety and nuclear security drafted with the assistance of the International Atomic Energy Agency (IAEA).
The current legislation, the 2007 Radioactive Protection and Nuclear Safety and Security Law, deals only with small-scale radioactive materials, and does not take into account the amount of regulation needed for the Kingdom's nuclear programme. Thus, the new Law on nuclear safety to set a regulatory framework is essential.
Key regulations are those focusing on the extraction, mining and milling of nuclear materials, and the safety of research nuclear installations, sub-critical assembly and zero-power reactors.
Other regulations cover the JNRC’s work with Worley Parsons, the government's consultant for preconstruction preparations for Jordan’s first nuclear reactor, and concern site approval, construction permits, environmental reports and emergency evacuation plans.
The new Law is to come into effect ahead of major milestones in Jordan's peaceful nuclear programme, such as the sub-critical assembly of the nuclear research reactor in Irbid, estimated to begin within two years, along with the uranium mining.
Jordan is signatory to several international conventions, including the nuclear Non-Proliferation Treaty, the Convention on Nuclear Safety, the Convention on Early Notification of a Nuclear Accident, the Convention on Assistance in the Case of a Nuclear Accident and the Comprehensive Test Ban Treaty.
Friday, October 1, 2010
Banks in Jordan enjoy healthy deposits, profits

By Robert Tashima
AMMAN - Jordan’s banking sector fared well during the recession of the last two years due to tight central regulation and an overall cautionary outlook, resulting in healthy deposit and profit levels that are attracting increased interest from overseas lenders.
As the global financial crisis was felt across the region in late 2008, the Jordanian government announced it would guarantee all deposits until the end of 2009,a pledge it later extended until the end of 2010. This commitment came on top of an existing scheme operated by the Jordan Deposit Insurance Corporation that insured deposits of up to $14,000 if a bank fails. There has been no significant pressure put on Prime Minister Samir Rifai to extend the blanket guarantee. While it has been in place, the state has not needed to bail out any of the country’s lenders nor has there been concerns over a possible crash.
While financial institutions elsewhere in the region have faltered, all of Jordan’s 15 local banks posted a profit in 2009, with four managing to post an increase in their loans' portfolios. However, total earnings for the banking sector fell to $942.2 million last year from $1.3 billion in 2008.
The solid position of Jordan’s banks was further bolstered in the first half of 2010 by a rise in deposits at licensed banks of 4.5 per cent in the January to June period, with the additional $1.3 billion taking the total held to $29 billion. This increase in deposits was matched by higher levels of credit extended by Jordan’s banks, with a further $814 million in loans made in the first six months of 2010, lifting the overall balance of credit facilities to $19.75 billion.
According to Antonia Dimou, an associate at the Centre for Strategic Studies of the University of Jordan, the country’s economy only suffered a minimal impact from the crisis, with the Central Bank of Jordan (CBJ) having ensured the stability of the banking system while maintaining monetary stability.
“The setting of 12 per cent as a percentage for capital adequacy has preserved the banks from any financial problems and led to a near impossibility of bankruptcy,” Dimou said in an article carried by the World Press Organisation on August 19. “The world standard for capital adequacy does not exceed 8 per cent; however, Jordan used a conservative banking system to save its banks in 2008.”
This, combined with the fact that the financial sector is tightly regulated also helped it avoid any major meltdown during the international economic crisis. According to data from the central bank, local lenders only had some $40 million worth of exposure to toxic papers, a very low level, especially when the sector’s high profits for 2008 are taken into account.
There has been increasing interest in the Jordanian banking sector by overseas lenders. Late in 2009, the CBJ announced it was granting operating licences to three new lenders: The Jordan Dubai Islamic Bank, National Bank of Abu Dhabi (NBAD) and Saudi Arabia’s Al Rajhi Bank, which would take the number of licensed financial institutions operating in the country to 26. Of these three, Jordan Dubai and NBAD have already opened their doors, with Al Rajhi looking to commence operations this month.
However, while the banking sector is expanding, both in the number of lenders and in its capital value, the industry has come under fire from some quarters who say banks initially reined in credit during the crisis instead of focusing on building up deposit and asset levels. There is a strong need for a specialised financing institution that would allow players in the industrial sector to gain access to funding and to circumvent the stringent lending measures applied by commercial banks, believes financial analyst Ali Tabbalat.
“Commercial banks prefer to extend short-term loans and these policies do not fit the industrial sector whose production process takes a long time,” Tabbalat said in an interview with The Jordan Times in mid-August.
This view was echoed by Nazzal Armouti, the deputy chairman of the Jordan Chamber of Industry, who said setting up a financial institution offering long maturities and reasonable interest rates is a basic need for the development of the industrial sector. “We, as industrialists, always call for setting up such a bank otherwise the sector will suffer and the country will lose important investment opportunities,” he said on August 11.
Though credit may currently be tighter than some would like, the fact that Jordan’s banking sector has ridden out the financial crisis without faltering means that it is better placed than many to increase funding should the economic outlook improve.
Oxford Business Group (OBG) is a highly acclaimed global publishing, research and consultancy firm, which published economic and political intelligence on the markets of Asia, Eastern Europe, the Middle East, and North and South Africa.
1 October 2010, Copyright: Jordan Times






