“Stimulating growth and investment during transition”

By EBRD  Press Office
@ebrd

The economic challenges faced by Jordan have been placed in the spotlight at a gathering of over 300 representatives from international financial institutions, business executives and public officials at the Dead Sea. They discussed reform priorities and the support that could be extended to the Kingdom to ease the strain on the economy.

The event at the Dead Sea’s King Hussein Convention Centre on Monday 28 May 2012, was organised by the European Bank for Reconstruction and Development (EBRD) and the Center for Mediterranean Integration (CMI). The conference, entitled  “Stimulating Growth and Investment During Transition”, was held under the auspices of Jordan’s Ministry of Planning and International Cooperation, and co-sponsored by the Jordanian Businessmen Association (JBA), the Young Entrepreneurs Association (YEA), the Business and Professional Women-Amman (BPW-A), the Jordan Chamber of Commerce and the Jordan Chamber of Industry.

The meeting is the fourth in a series of discussions under the EBRD led “Transition to Transition” initiative. Launched in 2011, it aims to facilitate a “peer-to-peer” exchange of experiences between countries that have gone through a transitional process in central and eastern Europe and countries from the southern and eastern Mediterranean (SEMED) region.

In his opening statement, Jordan’s Minister of Planning and International Cooperation, Jafar Hassan, acknowledged his country was grappling with a serious economic crisis. He referred specifically to the problems of food and energy security. He also noted the key challenges of  economic diversification, productivity and competitiveness, development of small and medium-sized enterprises to boost employment and the need to improve economic governance. Hassan also said it was important to  boost alternative energy resources, such as solar and wind power to ease the strain on the budget. He spoke on a panel with high-level decision-makers from states which have undergone change after the collapse of communism in central and eastern Europe.

Former Polish Prime Minister, Jan Krzysztof Bielecki, said: “It is important for politicians to have the support of citizens. Otherwise reform is hard to push through.” The former European Commissioner and former Minister of European Affairs of Bulgaria, Meglena Kuneva, agreed, adding that: “trust is the modern currency of the economy and society.” She continued: Consumers have to be empowered and become more demanding. This helps to build the private sector.”

Ivan Miklos, the Slovak Republic’s Minister of Finance, addressed the issue of subsidies and their negative impact on economies. “It is crucial that energy subsidies are reduced, so that companies become more efficient and private sector investment is attracted,” he said.

With 20 years of experience in central and eastern Europe in supporting economic growth and facilitating the transition process in the region, the EBRD now has a new mandate in the SEMED region to support the development of local economies. The EBRD's Chief Economist, Erik Berglof, said: “We come to Jordan to help grow the private sector and create jobs and economic growth, particularly by supporting small and medium-sized enterprises.” He added: “We want to do this by engaging with local banks to build this side of their business. We will invest with them in improving efficiency, particularly when it comes to the use of energy and water. We are particularly interested in the agribusiness sector along the whole value chain from farmer to retailers. We also want to support high value-added companies that can be part of Jordan’s future.”

The Center for Mediterranean Integration (CMI), of which Jordan is a member, is a World Bank-administered platform for multi-partner programmes. It works on regional integration and common development challenges across the Mediterranean and promotes dialogue and provides analytical support for countries from the southern Mediterranean to encourage sustainable and integrated development.

“This conference is meant to give impetus and support to Jordan’s economic reform drive. It brings to the Kingdom best practices and lessons learned from countries that have successfully manoeuvred similar challenges,” Mats Karlsson, Director of CMI, said. “By knowing what worked and what did not work, the government will be better placed to set its priorities and strengthen its economic recovery strategy that aims to spur growth, create jobs and attract investment.”

Interactive roundtables followed the opening session to share experiences and discuss different topics related to development challenges. The topics included the promotion of growth and employment, as well as the promotion of renewable energy.

The EBRD has said that it will eventually be able to invest as much as €2.5 billion a year in the region. The majority will be in private sector projects.