OBG talks to Ibrahim Naouri, Chairman, Naouri Group

Interview: Ibrahim Naouri

The overall efficiency of the transport network in Jordan has improved in recent years, but there are still some rules and regulations that need to be changed. For example, at present there is no way to expedite urgent shipments coming by road from Aqaba Port to Amman. Instead, a 48-hour waiting period is applied in all cases, and no priority lanes have been established. Moreover, there have been a number of trucker strikes at Aqaba Port that have threatened to impede operations. Although there is very little the government can do about such events, these strikes have to be managed carefully, otherwise the port will face congestion and begin to lose international shipping lines, or shipping lines will start levying extra charges. Still, as recent figures indicate, Aqaba Port is well positioned to capitalise on regional trade, and, in particular, to serve as a conduit for the shipment of goods to Iraq. In the first eight months of 2011, incoming cargo to the port – much of which was bound for Iraq – increased year-on-year by more than 25%.

In terms of major transport infrastructure development projects to enhance international connectivity, the government must ensure that the planned relocation of Aqaba Port is seamless. Simply put, there cannot be any gaps or delays during the transition to the new facility, otherwise Aqaba will begin to lose some of the new clients it has attracted in recent years.

Perhaps most importantly, Jordan needs to develop a cargo-based railway system that streamlines domestic transport and better connects the kingdom to its neighbours, and to major markets in South-eastern Europe. Indeed, creating an integrated railway network is essential for the development of the entire Levant and GCC region. Of course, the current government faces severe budgetary restrictions, which means that any railway project will require significant investment from the private sector, most likely in the form of public-private partnerships or build-operate-transfer agreements. This should not be a major cause for concern, as investors and contractors from across the globe have already expressed interest in funding such a venture. With regards to countries, financial and technical contributors to a Jordan-based railway project might come from places such as Germany, South Korea, China, Russia, Ukraine, Italy and the US.

In addition, it should be noted investors are already interested in a wide range of transport projects in Jordan. Foreign businesses in this sector are attracted by the kingdom’s strategic location, of course, and by its strong connections to the global supply chain via modern air, road and sea networks. Moreover, labour in this country is highly skilled and comparatively inexpensive, trucking is inexpensive and the tendering system is both fair and transparent.

How has ongoing unrest in Syria affected trade and transport ties with South-eastern Europe?

NAOURI: The unrest in Syria has had a profound impact on the Jordanian economy, and, in particular, on the kingdom’s ability to export fresh agricultural produce via Syria to Turkey and then onto the major markets located in South-eastern Europe.

Still, local exporters have come up with some creative solutions to ship produce in sealed refrigerated containers through alternative gateways in other nearby countries. In this case, we see the tangible commercial benefits associated with Jordan having strong diplomatic relations with its neighbours.

Overall, the so-called Arab Spring has been something of a double-edged sword for Jordan and its economy. On the one hand, the negative consequences include higher energy prices and reduced tourism revenue, as well as delays in major transport infrastructure development projects such as the aforementioned railway. On the other hand, one positive outcome is that the kingdom is now more than ever regarded by many as a safe haven for transport and trade in the region.