Multinational investors seeking to tap Jordan's Qualifying Industrial Zones (QIZs) have settled into a wait-and-see approach against a backdrop of spiraling violence in the region, executives say. But already established QIZs — where companies are allowed to export to the US within a framework signed between Jordan, Israel and the US — are undergoing major expansion plans.
Wary of political uncertainty, potential investors are reluctant to pour in capital while the Intifada is ongoing. “Potential investors are hesitant as a result of the situation,” said Amer Majali, director general of the Jordan Industrial Estates Corporation. “They are interested in the QIZs, but they are waiting for the Intifada to end.”
The country's five existing industrial zones, four of which are operational at full capacity, have roughly created nearly 20,000 jobs. The QIZs are a major attraction for businesspeople seeking low labour costs. Only factories with a minimum of 8 percent Israeli input ship their goods quota- and duty-free to the US.
“During the peak of the Intifada, we clinched business deals with three US companies worth an estimated $20 million,” said Kamil Fakhoury, business development manager at the Specialized Investment Compound, (Al-Tajamouat Industrial). “This reflects a tremendous belief in the stability of the country.”
Al-Hassan Industrial Estate, the first of the zones and a model for investors, last year had $55 million worth of exports to the US from nine factories, which enjoy full QIZ status. Majali said the Al-Hassan estate has been expanded to accommodate new factories. The zones, however, have been under fire recently by the Anti-Normalization Committee and investors were blacklisted as normalizers with the Jewish state.
Gabby Bar, acting deputy director general of Israel's MENA division of Foreign Trade Administration and head of QIZ committee, said the number of products that meet the required specification for quota and duty-free access to the US market have increased over the past three to four months.
He described the QIZ agreement between the two countries as “excellent,” especially with the involvement of foreign companies. He said the foreign companies are more concerned about business than any other developments in the area. — ( Jordan Times )
By Suha Ma'ayeh
© 2001 Mena Report (www.menareport.com)
