BizNews: Since His Majesty King Abdullah II’s 1999 ascension to the throne, Jordan has taken steps to encourage foreign investment and to develop an outward-oriented, market-based, and globally competitive economy. For instance, recently the investment and PPP laws were adopted. How would you describe today’s investment environment in Jordan?
Mr. Sheldon Fink (S.F.): I would like to relate specifically to that part of the economy that we work in. Jordan is a great tourism country but this is not what we do. I am going to relate to the industrial, logistic and transport sectors, which are the sectors where we work in.
Even after the King’s vision there were problems in the sectors we work in. We can identify two main issues: ten years ago, when we started here, the government officials at all levels had a very top down view of economic progress. The idea was that the King formulates the vision, the government ministries implement it and, if they cannot act directly, they implement it through the government companies. Only after that - they rely on the private sector to do something. The private sector was meant to do a follow up kind of work. This was a big problem, and although today the situation has significantly changed, this is still kind of a problem. But the perspective is changing: the government is working on it and is relying more on the private sector, but is still not easy. The second problem is more related to our sector of activity. Jordan, historically, was not a manufacturing country, we can say that it is very different from other Middle Eastern countries and probably more similar, under an economic point of view, to South American countries. Jordan is energy-poor, it has a fairly good location and educated people but when we first came here it was a lower middle-income country. Typically, countries like Jordan have their economy based on trading, not on production. So, we had to lobby for the development of the industrial sector, which at the time when we came in was basically constituted by the heavy chemical industries, like the fertilizers industry, which was relying on Jordan’s natural resources. In the private sector, there was the garment industry, which was relying on quotas and benefits given by third countries. We were one of the first private sector groups that came to Jordan with the idea of diversifying the industrial development.
On the logistic side, as Jordan has been for years a transit point to Iraqi trails, there was already something to build on. But even if the country was already in the business, the sector needed to be modernized. Needless to say, the logistic sector depends on transportation, so the country needed to develop proper transportation infrastructure. A lot has been done concerning this issue. Recently, there have been a lot of talks concerning the further implementation of the road and rail networks in the country. On the shipping side, as the port was partly privatized, the situation improved dramatically in the last years. Aqaba has largely benefitted from these improvements.
Concerning Aqaba, we believe its future is in the direction of industry, transportation and logistics. The vision of Aqaba as the new Sharm El Sheik is not sustainable. I am not saying that Aqaba should not invest in tourism but it has to rely more on its commercial port and the industry economy that is around it. If Aqaba will go in this direction, the future will be rosy.
In this scenario, our company has been very successful. We could do much more and Jordan could do much more and it is important for us to keep this mindset if we want to improve further. I am often asked: “You are successful, you make a lot of money, why do you keep complaining?” The answer is: “Because I believe we can do more.”
BN: You are a big advocate of bringing in high-tech industries to Jordan. Considering that we are in the midst of the 4th industrial Revolution, how do you think these advancements could benefit Jordan?
Not many know that Jordan has a pretty good software industry and although this is a niche sector, it is not the only one we have in the country. Many areas are doing well and should be encouraged to do better. For instance, the IT business is a good business for Jordan. There is also a good medical tourism business that could be further developed and could create good opportunities for European investors. The generic pharmaceutical industry is excellent too.
We try to introduce some sectors that nobody else was doing. We started with the heavy metals engineering business and we had a good success with that. Concerning high-tech, generally speaking, Jordan is not going to be the next R&D center of the world. What we are working on at the moment are renewable energy components and the production of low energy consumption materials. We just started with that and, on high-tech, now we have companies manufacturing solar panels and we have other projects connected to plastic conversion in the pipeline. We also have some projects starting with the production and industrial engineering of metals for the defense industry.
In general, we are trying to focus on industries that “ran away” from Europe and on industries that can exploit the fact that we are close to Middle Eastern markets. The other area in which I believe Jordan could grow a lot is in building materials, for instance we could attract investments from the people who are not brave enough to start production in more troubled areas of the Middle East. We are working on bringing in glass factories, factories to make pipes and transformers, which all fit very well with Jordan’s potential. We brought companies that make big components for power stations and chemical plants when nobody in Jordan was doing it. So far, we have been able to identify niches and work on these opportunities.
In a way, I think this is what should be done in Jordan. Jordan needs to attract more private companies to come and do business here. The focus of the message that the country needs to send abroad should not be “buy more goods from Jordan” but “come invest and make goods in Jordan”. The opportunities are there: markets in the Middle East and in East Africa are growing and here you can find the right business environment to approach these markets.
BN: How many clients does PBI Aqaba have at the moment, and what is the growth potential it has?
We have 90 active companies as of today but we are still small by European standards and the possibilities of growth are tremendous. We have offices in China, and Turkey but not yet in Europe and neither in the United States. We are looking for a way to gain exposure in these markets in which we are still not present.
In terms of prospect clients, we want to talk to European industries in the energy and building materials businesses. Two main questions should bring these industries to think about Jordan as a place where to come and invest. Question number one: Would it make any sense for you commercially to start manufacturing in Jordan? Number two: Considering that there is a market in the Middle East for the reconstruction of Syria and Iraq, can you serve these markets better from a base in Jordan than from a base in Germany? The same questions can be asked concerning the consumer markets in the Middle East and in East Africa. If you are prepared to think in this direction then we can talk to you in market terms and offer you advantageous conditions. If you want be part of the reconstruction of this area and access opening markets in the region, Jordan is the place where you need to be.
BN: As you have mentioned, PBI Aqaba is a services company. What services can you offer to foreign investors willing to come and do business in Jordan?
We are more than a one-stop shop, we work with different government agencies so that our clients do not have to run around to get what they need. We facilitate bureaucratic processes and we assist our clients in solving the problems that they might have in establishing their business here. We also help clients to analyze if they have a market here and we assist them to source, to understand the business environment and we assist them in the hiring processes by putting them in contact with the right people. We try to give them the best values for their money. In general, we offer all range of commercial advice and facilitations assisting our clients from A to Z.
Finally, the message for European and German investors that I want to transmit is: think in an unusual way and you will find that Jordan can be the right place to do business. It may be unusual for European companies to leave Europe but if they are looking for an opportunity, moving here could be very cost effective.
