Two days ago I was ranting on about the ‘Culture of Shame’ in Jordan and its negative effects on unemployment in the country, especially in the face of national companies employing foreign labor instead of the domestic alternative. Natasha has an interesting post on the recent plan to ‘Jordanize’ the labor force that’s worth reading. It basically involves applying “a significant increase on the fees levied on foreign workers applying for annual work permits” as well as training Jordanian workers to better compete in the market. This is the kind of plan I was talking about earlier that has a multiple solution approach. It’s not exactly the best of plans but it’s a start, it does send the message that the government is getting serious about the issue and I just hope they continue on this path.
But while our labor force is being Jordanized our publicly owned companies are being privatised, and quite possibly all at the same time. It’s kind of an economic rarity to see a country with traditionally publicly owned companies all being privatised in a small time frame. All of a sudden you get competition, generally lower prices, the introduction of more efficient technologies, relieving national debt and of course profits.
The list of companies on the list is rather interesting (and impressive)Ã¢?Â¦
Jordan is expected to raise at least $1bn this year by selling sizeable holdings in state assets, with heightened interest coming from Gulf Arab investors, the Privatisation CommissionÃ¢??s head has said. Mohamed Abu Hammour, the head of JordanÃ¢??s Executive Privatisation Commission, said privatisation would bring much needed investment and expertise to upgrade public utilities.
Ã¢??The proceeds from these projects should not be less than a billion dollars this year. This will lessen the burden on the treasury and cut debt instead of financing projects by resorting to the treasury,Ã¢?Â Abu Hammour said.
The commissionÃ¢??s evaluation process has also been streamlined to accelerate major sales in the pipeline. The largest sale that could be concluded soon is that of the governmentÃ¢??s remaining 41.5% in the countryÃ¢??s sole fixed-line operator Jordan Telecom, in which France Telecom bought a 40% stake in JordanÃ¢??s biggest privatisation to date in 2000.
An industry source said the sale could be within weeks. The sale of up to 49% of the state carrier Royal Jordanian (RJ) to an interested financial investor could be concluded by the end of the year or early in 2007, Abu Hammour said.
Other privatisations lined up for full or partial privatisation include up to 51% in the fully state-owned Central Electricity Generation Company (CEGC) and 100% of the state owned Jordan Electricity Distribution Company (EDC), along with over 20 smaller companies. [source]
Queen Alia Airport might also become a Build Operate Transfer, a “concession worth between $400mn to $500mn”. This basically means a private company will run the airport for (according to Abu Hammour) 20 or more years. So we’ll finally see some much needed improvements on the airport as well as the RJ airline (you might actually get a bread roll with that meal).
It’s also good to see that there is a move to attract Arab investors instead of relying on foreign control of these national companies. I think the privatisation of Jordan Telecom was one of the best moves in recent years and the difference has been noticeable. I hope the same will happen with the rest of these companies but I also hope the revenue will be put to good use by the government.