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The year 2014 was marked by strong growth in the construction sector and despite regional volatility slowing rollout for tourism projects, new developments in the residential, transport and energy sectors are expected to continue fueling growth. Indeed, credit extended to the construction sector in 2014 totalled $658m, up from $569m in 2013. In terms of real estate, 2014 saw trading continue to grow along with steady rises in property prices, especially in Amman. Although oversupply in the retail, high-end residential and commercial markets has been a cause for concern, the high prices for land are expected to cause a slowdown in development while regional instability will also reinforce Jordan’s safe-haven status as a selling point for international businesses seeking to set up shop in the region, thus keeping up a steady flow of foreign demand. This chapter contains interviews with Hani Mulki, Chief Commissioner, Aqaba Special Economic Zone Authority; and Taha Al Zboun, CEO, Dead Sea Development Zone.

Jordan’s transport sector underwent significant expansion in 2015 with upgrades to road, rail, air and sea links all driving the sector. Indeed, the port of Aqaba has completed much of its expansion work and is now engaged in new phases of re-development and growth. The road network continues to be upgraded in line with the 25-year road improvement programme commenced in 2002, which will see a total of around $1.8bn invested in the kingdom’s roadways. In the aviation segment, the new Queen Alia International Airport received 7.09m passengers in 2014, an increase of 9% year-on-year. Meanwhile, the Aqaba-Ma’an-Amman railway is the cornerstone of a JD2bn ($2.8bn) plan for a rail network announced in April 2015. In addition to improving connectivity, the project is expected to reduce transport costs, making Jordanian exports more competitive and imports cheaper. This chapter contains an interview with Lina Shbeeb, Former Minister of Transport.

As Jordan has historically imported the majority of its energy needs, the drop in global oil prices between mid-2014 and early 2015 will have a positive impact on the kingdom’s near term energy bills and on its trade deficit. However, the kingdom is also set to diversify its energy sources moving forward. As part of its National Energy Plan, Jordan hopes to see 29% of total energy needs met by natural gas by 2020, 14% by oil shale and 6% from nuclear energy. The plan also aims to generate more than 15% of total projected energy requirements via renewable resources. Indeed renewable energy activity has seen a sharp uptick in recent years, guided by sector-specific legislation and a raft of new solar and wind projects, with close to 1000 MW of solar and wind projects under development. This chapter contains an interview with Ibrahim Saif, Minister of Energy and Mineral Resources.

Finance and insurance remain major drivers of Jordan’s economic growth and in 2014 contributed they contributed a combined $3.6bn, or 13.9%, to GDP. Although lending has slowed somewhat, the sector remains well capitalised with banking sector deposits expanding by a robust 9.7% in 2014 to reach $42.7bn at the end of the year, a $3.8bn increase compared to a $3.7bn rise in 2013. Meanwhile the Jordan Securities Commission is undertaking feasibility studies to examine the possibility of demutualising and eventually privatising the Amman Stock Exchange. For its part, the insurance industry recorded 30.5% growth in combined net profits in 2014, with gross profits rising to a total of $46m, up from $31.9m the previous year, while new government legislation specifying the structure and transfer framework for the issuance of sharia compliant debt represents a positive step for the kingdom’s bond markets. This chapter contains interviews with Ziad Fariz, Governor, Central Bank of Jordan; and Nemeh Sabbagh, CEO, Arab Bank.

Ongoing regional conflicts have continued to place significant pressures on Jordan’s economy in the past year. Tourist revenues have been particularly affected while the closure of key trade routes with neighbouring countries has also taken its toll. According to the IMF, however, Jordan has done well despite the effects of regional instability. This is largely due to a recovery in industry and mining, with phosphate production reaching a high of 746,200 tonnes. Moreover, the World Bank forecasts robust GDP growth of 2.5% for the kingdom in 2015 and 3.7% in 2016. A new public-private partnership law and a 10-year economic development strategy are set to support this further growth, with the government working to target billions in foreign investment inflows. Elsewhere Jordan’s fiscal and external balances are expected to stabilise in 2015 and improve moderately over the medium term, while falling oil prices, subsidy reforms and energy diversification will likely improve the country’s economic standing moving forward. This chapter contains interviews with Umayya Toukan, Former Minister of Finance; Montaser Oklah Al Zoubi, President, Jordan Investment Commission; and Imad Fakhoury, Minister of Planning and International Cooperation.

In conjunction with SizweNtsalubaGobodo, OBG explores the taxation system, examining South Africa’s investor-friendly environment. OBG talks to Victor Sekese, CEO, SizweNtsalubaGobodo, on new tax rules.