By Fares Braizat, Jul 24,2022
Accelerating private sector-led economic growth is the way to create one million jobs in the next 10 years, as the Economic Modernization Vision stipulates. For this growth to occur, the private sector must be able to expand business through investment, which requires clarity when it comes to the adoption of market competition as an economic philosophy by all state institutions.
To ensure fair competition, a first step should be to get rid of direct and indirect monopolies in all sectors, especially in energy, which has been a major hindrance of economic growth.
The private sector also needs smaller and more efficient government so it can operate without bureaucratic complications. This can be achieved by automating and digitizing all government functions. Digitization not only reduces the invisible costs of business and shortens the time of registration, it also creates reliable and usable databases to build strategies and track implementation. In Jordan, it is long overdue.
While digitization is under way, immediate action to increase the efficiency and rehabilitation of public sector employees is badly needed. Such action must address the basis of civil service incompetence by introducing serious and credible evaluation of employees’ performance and ending the de facto immunity of public sector employees.
The private sector needs to be reassured that “investor incentives” are included in the law and not left to a ministerial committee. The mission of a ministerial committee should be to solve the problems facing investors; such committee would need to meet on weekly basis.
As an example of clarity regarding the economic vision, the energy sector must be totally subjected to free market competition rules, in both supply and demand. Currently, the cost of electricity – which is nearly double the regional average – is not subject to market rules. Power-generation companies, electricity-transmission networks, and distribution companies should be opened to the private sector, to increase competition, make use of renewable energy, increase production and reduce costs.
The private sector needs a reduction in the prices of leasing government lands for investment purposes, especially in the less developed regions. At the same time, the prices of land in the industrial zones need to be reconsidered, because the price charged during the periods of growth (2001-2007) does not apply today. Industrial zones should be considered “capital expenditure”, to incentivize the private sector, and can be linked to performance indicators, including job creation and exports.
Private-public partnership is not where it should be. There is a gap between private sector expectations and public sector “procedures”. This gap must be bridged through exemplary projects that are not too hard to implement, such as rehabilitation and operation of tourist and archeological sites, agri-tech for food security, and water saving.
The writer is the Chairman of NAMA Strategic Intelligence Solutions, H.E. Dr. Fares Braizat.
This article was originally published in Jordan News on July 24, 2022. For the original article source, click here.