Jordan
In-depth country-focused analysis on Jordan's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Jordan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Jordan, as well as the latest industry developments that could impact Jordan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Jordan before your competitors.

Country Risk

Jordan Country Risk

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Core Views

  • International recognition of a Palestinian state is gathering momentum, a trend that will continue over the next decade and deepen Israel's diplomatic isolation. However, actual statehood remains a far-off prospect.

  • The formation of a Palestinian unity government in June 2014 marks a symbolic end to the long-running dispute between the rival Fatah and Hamas factions ruling the West Bank and Gaza Strip respectively. However, the reconciliation agreement will face major difficulties, as ideological differences between the two parties remain stark. Maintaining a central government over two geographically separate regions will be a massive challenge. The unity government will struggle to improve the Palestinian territories' lacklustre economic outlook.

  • We remain downbeat on the economic growth prospects for the Palestinian...

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Jordan Operational Risk Coverage (9)

Jordan Operational Risk

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BMI View: With a negligible murder rate of between one and two per 100,000 and an effective police force that suffers little from corruption , Jordan is a low-risk country for investors.   However, despite Jordan possessing effective intelligence and counter-terrorism agencies, risk does remain in the form of a high terrorist threat.   In spite of this, Jordan is one of the safer count ries in the Middle East and North Africa region , with the country attaining a...

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Jordan Crime & Security

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With a negligible murder rate of between 1 and 2 per 100,000, and an effective and low corruption police force, Jordan proves to be a low-risk country for investors. Yet despite Jordan possessing very effective intelligence and counter-terrorism agencies, risk does remain in the form of high terrorist threat. In spite of this, Jordan is one of the safer countries in MENA and the Arab world, with the country attaining a security risk score at a low 48.2 out of 100, placing it 83 rd in the world. Regionally, Jordan figures quite highly as it is only bettered by the Gulf states, and thus exceeds all of its neighbours with the exception of Saudi Arabia.

Crimes like robberies and assault appear low but these are potentially opaque, as Jordan, along with several other Arab countries, recognises a process called otwa whereby families resolve disputes among themselves, with minor governmental oversight. This could...

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Jordan Labour Market

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Jordan's labour force is, on the whole, well educated and highly urbanised with a high level of primary education and literacy - even in rural areas. Investors will find a readily available pool of skilled and semi-skilled labourers who are cheap to hire and fire. Jordan scores 53.7 out of 100 overall for Labour Market Risk. At 66 th in the world and just behind Mexico, Jordan ranks 6th within MENA, behind Israel and the GCC only (with the exception of Kuwait and Oman). Regionally, Jordan figures highly. Jordan betters two of its neighbours (Syria and Iraq) in every aspect, with a higher availability of labour score than Saudi Arabia and one of the highest educational scores in the region.

While women show higher rates of university enrolment than the regional average, they continue to be relegated to mostly domestic roles. Another negative aspect of Jordan's labour force is the so called brain-drain effect, as many of the more...

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Jordan Logistics

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Jordan's road transport network connects it to all of its neighbours; however its principle cities suffer from congestion and mapping issues. This means that while access to neighbouring states is easy, Jordan's principle cities could prove difficult to navigate, and this could inhibit the fluid movement of goods and services. Jordan scores 54.8 out of 100 in the Logistics Risk index - 65th in the world behind Russia and ahead of Argentina. Regionally, this puts Jordan behind Egypt, ahead of Kuwait and around the middle of Middle East and North Africa (MENA) as a whole.

Jordan's only port offers access to key maritime trade routes such as the Arabian and Mediterranean seas and looks to benefit from a needed upgrade. Its rail system, key to its mining industry, would also benefit from upgrade and extension - offering access to its neighbours and the region as a whole - as it currently provides little opportunity for investors to exploit....

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Jordan Trade & Investment

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BMI View: Jordan's greatest strength with regards to trade and investment opportunities is i ts economic openness.   L imited government intervention and a comparatively good legal system and ICT development also offer advantages to incoming investors. Jordan's Trade and Investment Risk score is 56.2 out of 100. In a region where the highest score is the UAE's 66.3 out of 100, Jordan scores highly, ranking sixth out of 18 countries in the Middle East and North Africa (MENA) , behind the UAE, Qatar, Bahrain, Oman and Israel.

Jordan is very open to investors, with few trade barriers and many free trade agreements (FTA) and association agreements - most notably the Jordan-US FTA. With...

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Jordan Industry Coverage (7)

Autos

Jordan Autos

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Heightened risk from the situation in Syria, coupled with a weak economic outlook, will continue to dampen autos demand in the Levant region over the course of 2015. Of the three countries covered in this report, we believe that it is Jordan that has the strongest near-term growth potential, where we are targeting 6.7% growth in new vehicle sales over 2015, to 18,855 units. However, Lebanon will remain the largest regional market overall, on 42,823 units, up by 4.1% during 2015.

Backing up our optimistic outlook on the evolution of new vehicle sales in Jordan is our Country Risk team's belief that economic activity will strengthen from 2015 onward, due to robust public investment and gradual improvements in domestic demand. BMI forecasts real GDP growth to stand at 2.9% in 2014 and 3.4% in 2015, compared to an annual average of just 2.6% between 2010 and 2013.

In particular, we expect construction activity and the...

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Commercial Banking

Jordan Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Defence & Security

Jordan Defence & Security

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Amidst regional instability, BMI is forecasting Jordan's defence spending to grow in 2014. In the increasingly volatile Middle East, Jordan is facing an active threat from the civil war in Syria. We are estimating that defence spending will grow by 12.0% over 2014 to US$1.73bn. This follows rather slower growth of 8.1% over 2013, when the budget has totalled US$1.55bn. Although strong ties link the Jordanian regime and US and UK defence sectors, a stagnating economy and ongoing political risks mitigate against a wholly positive 2014 outlook.

Jordan's security threats are primarily regional. Following the defeat of the Muslim Brotherhood-led regime in Egypt in 2013, domestic Jordanian Islamists have been significantly weakened. The ruling regime - headed by King Abdullah II - enjoys good relations with the US and UK (as reflected in significant military cooperation and sales). However, despite having a peace treaty with...

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Insurance

Jordan Insurance

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BMI View: At first glance, it is obvious that many of the weaknesses that are common to (almost) all the national insurance markets of the Middle East & North Africa (MENA) region feature in Lebanon and Jordan. However, both markets are patently open to competition from foreign insurers. In both cases, local companies are resilient. It is easy to find examples of innovation.

As of early 2014, it remains obvious that many of the weaknesses that are common to (almost) all the national insurance markets of the Middle East & North Africa (MENA) region feature in Lebanon and Jordan. Neither is a particularly large market in absolute terms - nor will either ever be so. In both countries, there are literally dozens of undersized insurers, focusing mainly non non-life lines. They are lacking economies of scale, access to capital and ability to write risks without buying a lot of...

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Medical Devices

Jordan Medical Devices

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Espicom Industry View:   T he Jordanian medical device market is projected to grow at an above average pace of 9.3 % per annum to 2018, but the overall market size and per capita spend will remain comparatively small in global terms. The key driver of growth remains medical tourism, for which Jordan is the No 1 destination in the region.

Headline Industry Forecasts

  • The Jordanian medical device market is projected to expand by a CAGR of 9.3% which should see it rise from an estimated US$243.7mn (JOD172.6mn) in 2013 to US$380.9mn (JOD270.4mn) in 2018. In per capita terms, the market is projected to rise from an estimated US$33.5 (JOD23.7) per capita in 2013 to an estimated US$47.9 (JOD34.0) per capita in 2018.

  • ...

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Pharmaceuticals & Healthcare

Jordan Pharmaceuticals & Healthcare

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BMI View:   Continuing political instability in the region is having a detrimental impact on the country's economy and healthcare sector which is burden ed with many Syrian refugees . Th e Jordanian government   is continuing to invest in the country's healthcare sector through training more staff and developing additional infrastructure. This will expand access to health services among the population and provide opportunities for drugmakers looking to enter the Jordanian pharmaceutical market.  ...

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Telecommunications

Jordan Telecommunications

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BMI View: Jordan's telecoms operators look set to remain under intense financial pressure over our five-year forecast, as they will be buffeted by macroeconomic and industry-specific challenges. Strong competition has also played a role, with ARPUs falling across the board in the first nine months of 2014. Increased taxes on telecoms revenues have been a major factor in operator revenue declines and t he government is not inclined to reduce taxes or reinstate subsidies given its weak fiscal position. Globally, the telecoms industry is threatened by the rise of over-the-top players, as consumers look for cheaper communication methods amid a deteriorating consumer spending outlook . In this set of circumstances, network operators must find new ways to generate revenue and reduce...

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