The US Ambassador to Jordan Lectures on the US-Jordan Partnership at Talal Abu-Ghazaleh Knowledge Forum

Jordan’s economic potential resides within the ingenuity and creativity of its people- Wells
 
AMMAN – June 15, 2015 --- The Economic Policy Development Forum (EPDF) organized a discussion session with the US Ambassador to Jordan HE Alice G. Wells on the “US-Jordan Partnership Realizing Jordan’s Economic Potential” attended by diplomatic mission representatives, members of the Upper and Lower Houses, former ministers in addition to UN representatives and many attendees from the public and private sectors.

At the beginning of the meeting, HE Dr. Talal Abu-Ghazaleh, chairman of Talal Abu-Ghazaleh Organization (TAG-Org), stressed that the session underlines the support and assistance provided by the United States to Jordan to come up with the most important conclusions.

Ambassador Wells extended her gratitude to Dr. Abu-Ghazaleh describing him as “one of Jordan’s sharpest economic minds - Dr. Abu-Ghazaleh. I know his passion is for the greatest of causes, developing human capital in Jordan.”

“The government’s recently-released Jordan 2025 plan takes up many of the issues I’ve addressed today, and we are supportive of His Majesty King Abdullah’s efforts to again carve a new path for Jordan. As a steadfast partner of this proud nation, we hope that these ambitious government reforms will open the way for the private sector to turn goals into outcomes. Neither side can do it alone,” she said.

She added: “With all the chaos in the region, Jordan’s best defense is economic strength and self-sufficiency. Both the United States and Jordan have worked together to fight the terrorist group Da’esh on the battlefield. But as President Obama has said, this is a war that will take years, not days or months. The only way to truly defeat Da’esh is to discredit its poisonous ideology; to show that modern, moderate states provide a better path for our youth.”

She pointed out that there are 350 million young people in the Middle East, looking for jobs and looking to start their lives, noting that in a poll published last week, less than 50 percent of Jordanians expressed optimism about the future of Jordan’s economy, stressing that “this makes our partnership, and focusing intently on Jordan’s long-term economic independence, absolutely crucial. Time is not on our side.”

The Ambassador said that Jordan’s young people need to have hope in the future, which depends on a strategy and plan that produces jobs and prosperity for young Jordanian men and women alike.

Since my arrival, I witnessed the breadth of the economic partnership between our two countries, the deepest friendship in this critical region. Two weeks ago, I was proud to build upon that partnership, overseeing with His Excellency the Prime Minister the signing of a $1.5 billion agreement to guarantee Jordan’s access to international capital markets. This agreement, and our previous two loan guarantees, will save Jordan over $500 million in interest payments over the life of the bonds.

Trade between the United States and Jordan has never been stronger. Starting with the Qualifying Industrial Zones and now the Free Trade Agreement, total bilateral trade reached $3.4 billion in 2014.

Through the Overseas Private Investment Corporation, the United States has funded projects big and small, as large-scale as the 202-mile Disi water pipeline and as individual as a chocolate company expanding and creating new jobs.

The United States is also committed to developing Jordan’s young workforce. The clean technology, healthcare, and Information Communications Technology sectors are receiving help from the USAID Jordan Competitiveness Program in research, financing, business operations, and many of the other critical back-office solutions that turn great ideas into great businesses.

And, of course, the United States signed a three-year memorandum of understanding that pledges $1 billion in assistance each year through 2017. At the end of this fiscal year, the United States will have provided $15 billion in economic assistance to Jordan since its founding.

As I have seen in my travels around the country, Jordanians benefit from US assistance in myriad ways, touching every aspect of their lives. Over 75 percent of babies in Jordan are born in maternity wards renovated by USAID. With half a billion dollars dedicated to Jordanian education since 2005, US government programs have reached thirty thousand teachers and more than a million students, two-thirds of Jordan’s student population. A third of Jordan’s population receives fresh, drinkable water via treatment plants and supply networks built with US funds.

And so, like true friends, our help has an objective that we both believe in: to make Jordan strong, more economically self-sufficient, and to use its wealth of human resources to extend its influence in the region and the world.

Jordan’s underlying challenges, as His Majesty King Abdullah wisely noted in the Jordan 2025 plan, are not rooted in refugees, regional instability, or ISIL. They are the same challenges faced by every developing nation: how to create a sustainable and inclusive economy that supports and is propelled by the aspirations of its people.

Every year, 100,000 new graduates look for work or continued study; there are not enough spots for all of them in their chosen fields. This region has the highest youth unemployment rate in the world; and almost a third of Jordan’s young people do not have immediate prospects after graduation.

Meanwhile, only a tenth as many are in vocational schools to become electricians and carpenters, and that snatch up jobs immediately. The pyramid is inverted; as one Jordanian entrepreneur said recently, “Everyone wants to be an engineer, but no one wants to be a technician.”

As war and terrorism have reduced trade with Jordan’s traditional partners, there is an opportunity to open up more trade corridors throughout the region.

Targeted food discounts for poor Jordanians would cut Jordan’s 225 million dinar bill for food subsidies in half.

But as the government balances its budget and reduces its need to borrow, small and medium-sized businesses should be an investment priority. While SMEs represent 95 percent of registered businesses in Jordan, they only receive 10 percent of loans, and most banks have not yet considered how their lending practices could be restructured to facilitate access to financing for this crucial sector. This is another inverted pyramid that begs attention.

Just as we have committed to support Jordan with assistance, the US is and will continue to be partners with Jordan to overcome its economic challenges, including some of its most pressing needs, such as energy and water.

Not only is affordable energy needed to drive the Jordanian economy, but its scarcity has already caused a 4.7 billion dinar debt at the state-owned National Electric Power Company.

While the loss of cheap Egyptian gas caused a fiscal crisis, it has also led to opportunity in the form of diversification and new investment. Two major American renewable energy companies have made plans to invest in Jordan, a 20 megawatt solar plant in Ma’an and a 45 megawatt wind farm in Irbid.

The recent arrival of a liquefied natural gas processing ship in Aqaba will allow Jordan to import large quantities of affordable fuel that will provide 30 percent of the country’s power needs at a third less than the cost of diesel. The next hurdle is to secure a long-term supply of natural gas from the Leviathan field, with the potential to solve Jordan’s energy crisis entirely.

That’s why we are helping Jordan develop new and innovative water solutions, with the US contributing over one billion dollars to the water sector over the last ten years. Last October, Water Minister Hazem Nasser and I cut the ribbon on the Al-Karak Dam, which was financed through the proceeds of the sale of wheat donated by the United States.

In Zarqa, the US is completing a $275 million water program through the Millennium Challenge Corporation. When completed in December 2016, the MCC investment is expected to benefit over three million residents in the Amman and Zarqa governorates.

Likewise, we are supportive of the Phase One Red-Dead desalination project. It will bring much-needed new sources of water to Aqaba and northern Jordan.

Regional interdependence is hard when the security situation is poor and conflict is at your doorstep. But the two are intertwined: security is unlikely to improve until economic development and opportunities for citizens improve. Jordan must be creative in its approach to opening and strengthening new markets.

Business people can lead the way even when government-to-government dialogue stalls. We need the private sector to stay engaged in regional initiatives like the MECC; profits and job growth can speak louder than politics.

An Intaj program to connect Jordanians to Silicon Valley accelerator “Plug and Play” has offered young entrepreneurs the opportunity to incubate their businesses in the United States, raising close to a million dollars in financing to date.

According to one estimate, if the gender gap was narrowed just by one third, the GDP in the region would grow by $1 trillion per year, or six percent. If Jordanian women participated in the country’s economy as much as their Arab women neighbors, Jordan’s GDP would increase five to ten percent.

During this year’s World Economic Forum, which I was privileged to attend last month, we heard from Ronald Bruder, a U.S. real estate developer who founded Education for Employment, which offers short-term training in technical skills. His organization takes young, unemployed women and men, and trains them in high-demand jobs like cashiers and data-entry workers.

They practice job interview skills and work with employers to find placements. Out of the 5,000 people Bruder’s organization has trained in Jordan, 85 percent now have jobs. This is a win for everyone.

Through the USAID Jordan Loan Guarantee Facility, the United States is providing $250 million to participating Jordanian banks to fund small businesses; and over 10 percent of the guarantees have benefitted women-owned businesses.

At the end of the session, Dr. Abu-Ghazaleh presented Ambassador Wells with the Petra miniature and TAG-Org shield in recognition of her efforts in supporting the US-Jordan partnership.