Economists cautiously view launch of capital and investment fund

AMMAN — Steering clear of the typical path and the traditional investment models is needed to achieve a more positive investment environment, according to economists.

Jordanian banks on Tuesday, virtually launched the Jordan Capital and Investment Fund worth JD275 million, in the presence of Prime Minister and Minister of Defence Bisher Al Khasawneh, Governor of the Central Bank of Jordan (CBJ) Ziad Fariz and Head of the Association of Banks in Jordan Hani Al Qadi.

Targeting vital and promising national companies, the fund aims to strengthen the economic development and investment climate, as well as create more employment opportunities.

The prime minister, in his opening remarks during the virtual launching ceremony, pointed out the need for such investment funds amid the pandemic that impacted various economic sectors, stressing that “the launch of the fund is in line with the government’s efforts towards promoting inclusive development, attracting investment and tackling poverty and unemployment.”  

Endorsing Al Khasawneh’s view, economic expert and analyst Zayan Zawaneh told The Jordan Times on Wednesday that amid the pandemic, establishing an investment fund is more vital than ever, noting that the banking sector is a “keystone” in the Kingdom’s economy, having shown cooperation and “positive attitude” since the start of the pandemic crisis.

“The Jordanian economy is in urgent need for capital infusion,” according to Zawaneh who added that the CBJ has played a significant role in maintaining economic stability.

This is just a step towards building a more resilient economy, the analyst said, pointing out that it is necessary to move away from the conventional notion of investment, in order for the fund to succeed.

 “Investment needs to be based on and upgraded through technological advancements,” Zawaneh said.

Meanwhile, economist Mazen Marji told The Jordan Times that the current economic reality is challenging and the pandemic has compromised investment incentives in Jordan. He added that in “periods of economic recession, it is more important to fix what was destroyed, help damaged companies and bring back investors who left”.

Furthermore, Marji said that the Kingdom should not only invest in traditional sectors and companies, but should provide a suitable investment environment for outsourcing businesses.

“In order to have a solid track record of successful investment climate, we need to put our country on the investment map, by providing opportunities and eliminating barriers to investors,” according to Marji who added that the Jordan Capital and Investment Fund is part of a policy to manage the current crisis.

In remarks to The Jordan Times, economist Issam Qadamani said that investing in promising national companies does not need a fund and that having access to concessionary financing is enough.

Qadamani added that “off the shelf” measures will not be effective and instead “true” measures must be crafted in order to encourage the private sector to invest and seize the existing opportunities.