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Unlike many of its neighbours, Jordan does not benefit from large hydrocarbons reserves. Consequently, around 96% of Jordan’s energy is imported, which costs as much as 20% of GDP on an annual basis. Spending on oil imports increased by 80% in January 2012 year-on-year, and this follows a 58% increase in spending between 2010 and 2011. To reduce dependence on foreign imports, policy makers are continuing to pursue an energy diversification strategy as a matter of urgency, focusing on new sources of natural gas in the short term, as new private-sector proposals in oil shale, nuclear and renewables come to fruition. This chapter includes interviews with Qutaibah Abu Qura, Minister of Energy and Mineral Resources; Mike Weightman, Chairman of the Regulatory Cooperation Forum; and Christopher Morgan, Chairman of Karak International Oil.

The transport sector accounts for around 12% of GDP and 10% of the country’s workforce, according to figures cited by the Ministry of Planning and International Cooperation in January 2012. The sector has traditionally been dominated by road infrastructure, with Aqaba’s seaport and air transport also playing an important role. The rail system is less developed, though the government is moving ahead with plans to expand and modernise rail networks. In aviation, extensive improvement plans are under way at two of the major airports. Furthermore, measures are now being taken to update Jordan’s transport legislation. This chapter includes an interview with Ibrahim Naouri, Chairman of the Naouri Group; and Kjeld Binger, CEO of the Airport International Group.

The country’s insurance sector is continuing to see steady growth despite difficult economic conditions and the burden of underwriting unprofitable motor insurance. In 2011 demand increased across all segments, particularly medical, fire and life. Indeed, the life insurance segment is seen as having one of the highest potentials for growth, due to its relatively low penetration compared to other products. Takaful uptake is also expected to see expansion, due to increased public interest in sharia-compliant models. However, the market for health insurance has seen lower profits, due to rising costs and increasing competition forcing a reduction in premiums. This chapter includes an interview with Othman M Bdeir, Chairman of the Jordan Insurance Federation.

Following four difficult years, 2012 looks set to be a turning point for the stock exchange as institutions and investors ready themselves for a stronger climate of investment and growth. In 2011, Jordan’s capital markets continued to suffer from wider regional and domestic events as investors’ fears were stoked by low economic growth, a tightening of fiscal spending and high interest rates. More positively, the year witnessed an increase in the share of foreign investment, from 49.6% in 2010 to 51.3% in 2011. There is a sense that many of the blue chip stocks with solid results remain undervalued, indicating prices are being affected by low investor confidence rather than fundamental concerns. Exchange regulators, for their part, are looking to encourage the specialisation of investment products and create a more sophisticated investment environment. This chapter includes an interview with Samir Jaradat, CEO of the Securities Depository Centre; and Adel Kasaji, CEO of AB Invest.

Jordan’s banking sector emerged from the global economic crisis in good health, providing much needed economic stability throughout 2011. Of the 17 banks that had declared year-end results for 2011 by March 2012, all reported positive net profits, and sum profit across these banks increased by nearly 25% on 2010. While the sector faces challenges in the form of increasing rates of non-performing loans, criticism for not doing enough to provide credit to small businesses, and a competitive marketplace, banks largely remain profitable with low exposure to risk. The banking sector is well placed to underpin economic recovery and return the country to healthy levels of growth. This chapter includes an interview with Ziad Fariz, Governor of the Central Bank of Jordan; and Kholoud Saqqaf, Executive Vice President of Arab Bank. The chapter also includes a roundtable with Tarek Akel, CEO of Al Rajhi Bank; Iyad Ghasoub Asali, General Manager of the Islamic International Arab Bank; Sami Al Afghani, CEO of the Jordan Dubai Islamic Bank; and Musa Shihadeh, Vice-Chairman and CEO of the Jordan Islamic Bank.

As the economy faces short-term challenges of low growth and a tight fiscal position, preparation is under way to support long-term recovery and lay foundations for the encouragement of investment as new sectors open up, notably in infrastructure and energy. Jordan faces several short-term challenges it must overcome to lay the foundations for when growth is expected to pick up from 2013. It must secure cheaper energy through an agreement with Egypt for regular supplies of gas and must reform subsidies to reduce non-productive expenditure and instead boost spending on education and infrastructure. If 2012 looks to be a year for scoping out investment opportunities and laying foundations for the future, 2013 should see the start of several new large-scale development projects and a return to stronger economic growth. This chapter includes interviews with Awni Al Rushoud, Acting CEO of the Jordan Investment Board; Maen Nsour, Director-General of the Social Security Corporation; and Umayya Toukan, Minister of Finance.