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

  • Jordan's political risk profile is improving, and King Abdullah II is more secure in his position than at any point since the start of the Arab Spring in 2011. However, we stress that threats to the country's stability will remain elevated as long as conflict continues across Iraq and Syria, while high youth unemployment and the government's uncompromising approach towards the domestic Islamist opposition raises longer-term risks.

  • We are more positive towards the Jordanian economy than at any point since 2010, with lower oil prices and signs of progress on the government's infrastructure investments set to boost economic activity throughout 2015. We forecast real GDP growth of 3.6% this year, compared to an annual average of 2.7% between 2010 and 2013.

  • We believe that the Central Bank of Jordan (...

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Jordan Operational Risk Coverage (9)

Jordan Operational Risk

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BMI View: Traditionally a buffer state, Jordan remains one of the more stable and safe countries in the Middle East and North Africa (MENA) region. Though it enjoys US aid and a peace treaty with Israel - a benefit shared only by Egypt - Jordan continues to suffer the regional fallout of past conflicts in Palestine, Iraq, Lebanon and, most recently, Syria. As many Jordanian fighters cross the country's borders in order to fight in the foreign conflicts, tensions with Syria rise and more refugees pour into the country, it is easy to see why security is the most significant operational r...

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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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BMI View: Jordan's geostrategic location and fairly well-connected road and port networks ensure ready access to major regional and international markets, representing a crucial advantage to businesses based in the country. Trade activities are further reinforced by an efficient trade bureaucracy and governance system, though export procedures are considerably more competitive in terms of costs and document requirements than import procedures. However, planned airport, port and railway infrastructure upgrades will be necessary to preserve Jordan's competitiveness vis-a-vis strong logistics competitors in the region, notably in the Gulf Cooperation Council (GCC)....

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Jordan Trade & Investment

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BMI View: Jordan's open economy, stable political regime and welcoming attitude to foreign direct investment make the country an increasingly attractive investment destination within the highly unstable Middle East and North Africa (MENA) region. The country has enacted a number of business-friendly reforms over the last two decades, lowering barriers to trade, removing caps on foreign ownership, and improving bureaucratic and legal procedures. Investors will also be enticed by low tax rates and generous incentives. Nevertheless, we caution that a number of obstacles continue to cloud the operating environment. Chief among these are lingering concerns over corruption, which hinders bureaucratic and judicial efficiency. In addition, the availability...

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Jordan Industry Coverage (7)

Autos

Jordan Autos

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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BMI View: Amid regional instability, Jordan remains a key U.S. ally and we expect this defence relationship to develop further over the course of 2015. As defence budgets tend to grow amidst increased threat perceptions, for 2015, we forecast Jordan's defence expenditure to grow at annual rate of 9.7% to bring spending to USD2.8bn despite stagnation in the wider economy.

BMI determines an overall upward trend in the annual rate of growth in Jordan's defence expenditure. We think spending may be boosted by a substantial increase in U.S. military aid to Jordan currently under discussion in the Congress. We note that in the short to medium term manpower as a...

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Insurance

Jordan Insurance

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BMI View: Insurers in Lebanon and Jordan face some key risks during our forecast period through to 2019, including downwards pressure on pricing caused by intense competition within a fragmented marketplace and demographic challenges. In Lebanon, economic uncertainty and currency fluctuations mean we expect to see overall contractions in life and non-life insurance by 2019. The outlook for Jordan is more positive, with healthier domestic economic growth supporting expansion of a range of life and non-life lines.

In 2015, both Lebanon and Jordan are expected to record overall increases in life and non-life insurance premiums written. The key driver of this growth is economic expansion. Healthy domestic economic growth in Jordan, boosted by falling global oil prices, will increase household consumption and demand for products that fill in the gaps...

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Medical Devices

Jordan Medical Devices

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BMI Industry View: The 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 USD243.7mn (JOD172.6mn) in 2013 to USD380.9mn (JOD270.4mn) in 2018. In per capita terms, the market is projected to rise from an estimated USD33.5 (JOD23.7) per capita in 2013 to an estimated USD47.9 (JOD34.0) per capita in 2018.

  • ...

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Pharmaceuticals & Healthcare

Jordan Pharmaceuticals & Healthcare

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BMI View: Jordan's government is attempting to achieve universal healthcare coverage, which we believe will become increasingly possible following the decision to no longer provide free medical treatment to Syrian refugees in Jordan. The government will have more funds to invest in the development of the public healthcare sector, which was previously overburdened with refugees, though regional instability will continue to weigh on Jordan's attractiveness as a medical tourism destination.

Headline Expenditure Projections

  • Pharmaceuticals: JOD664mn (USD935mn) in 2014 to JOD711mn (USD1.00bn) in 2015; +7.2% in local currency terms and US dollar terms. Forecast in line with Q115.

  • Healthcare: JOD2....

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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 the government is not inclined to reduce taxes or reinstate subsidies given its weak fiscal position.. In this set of circumstances, network operators must find new ways to generate revenue and reduce operating expenses. Zain launched Jordan's first 4G LTE network in February 2015 and Orange is likely to launch its network within 2015. BMI...

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