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	Jordan		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Investment Issues Privatization General The government of Jordan has embarked on a privatization program that is to include most public sector enterprises. This program is supervised by the Cabinet Committee on Privatization, recently created by the Council of Ministers. The Committee is responsible for setting broad policy and guidelines for the privatization program. The government of Jordan will carry out its privatization program through three distinct methods. The government will sell its shares in existing companies; it will incorporate existing state economic enterprises as a first step towards their privatization and the eventual sale of their shares; the government will also sanction the licensing of private investment in various activities, mainly utilities, that have previously been controlled by government monopolies. The Telecommunications Law (No. 13 of 1995) created a committee with the authority to license private sector projects. In the electricity sector, the recently enacted General Electricity Law (No. 10 of 1996) permits the licensing of independent power producers and independent power distributors. The General Electricity Law also allows industrial enterprises to set up their own power generating facilities and allows them to exchange their electricity with other independent power producers. Jordan's Telecommunications Corporation (TCC) and the Jordan Electricity Authority have both been commercialized. The government has already announced its intention to sell a 26 percent stake in the TCC, and new telecommunications services are open to the private sector. The Jordan Investment Corporation (JIC) plans to sell shares in a number of public companies, including a 33 percent stake in the Jordan Cement Factories Company (JCFC). There has also been discussions regarding the privatization of Jordan's national airlines, Royal Jordanian. In November 1996, the Jordanian Transport Ministry invited international consultants to submit detailed proposals to assist it in the privatization of the Aqaba Railways Corporation (ARC). Consultants on this project include Coopers & Lybrand and Booz, Allen & Hamilton, both of the US; Mercer Management Consultants of the UK; Canada's CPCS; and Padeco of Japan. Fourteen companies submitted preliminary proposals in September. Sale The JIC functions as the investment arm of the Jordanian government. It has already concluded a number of sales of its shareholding in Jordanian private and public shareholding companies, mostly in the hotel and tourism sector. Incorporation The 1989 Companies Law allows for the transformation of state economic enterprises into public shareholding companies. Initially, such companies are to be owned by the government. They may be sold at a later stage, in whole or in part. The Jordan Electricity Authority which was incorporated in the form of a public shareholding company as of September 1996 was the first such enterprise to be incorporated. Next was the Telecommunications Corporation which was incorporated as of January, 1997. Similar plans are underway regarding the Royal Jordanian Airlines, Aqaba Railway Corporation, Public Transport Company, Aqaba Port and Queen Alia International Airport. Licensing In order to license private investments in government controlled sectors, legislative amendments and reforms are required. This task has already been accomplished for the telecommunications and electricity sectors. Stock Exchange The Amman Financial Market (AFM) is a credible and regulated market that is one of the largest Arab stock markets. The AFM is open to foreign investors who may own up to 50 percent of any listed public shareholding company. Bonds and shares of Jordanian public shareholding companies, government and municipal bonds may be traded on the AFM. Over-the-counter trades, options, futures and other derivative trading, however, are prohibited. The new Securities Law, described above, provides for the establishment of a Securities Commission that would supervise all securities transactions. The new law would allow for the establishment of a Securities Market and Central Depository. In addition, it would relax some of the restrictions on futures and options trading. Previous Chapter Contents Menu Next Chapter

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