Imad Fakhoury, Chairman
and CEO of Aqaba Development Corporation |
Perhaps nowhere in the Kingdom of Jordan are the
reforms initiated by His Majesty King Abdullah II
II more tangible than in the renaissance taking
place in Aqaba, a port city located on a sliver
shaped gulf of the same name. Although an important
asset for Jordan, this languishing port, established
in the 1950s, under the authority of the Al Aqabah
Ports Corporation, part of the Ministry of Transportation,
was best known as one of the few lifelines to the
outside world for Iraq during its war with Iran.
In the mid 1980s perhaps as much as 70 percent of
Aqaba’s total cargo capacity was devoted to
transit trade with Iraq.
"Aqaba is an interesting model to look at
in terms of change brought on by His Majesty,"
said Imad Fakhoury, Chairman and CEO of the Aqaba
Development Corporation. According to Fakhoury,
the king asked an important question early on in
his reign—how do we bring economic growth and
prosperity to the people of Jordan, despite the
fact that Jordan is a country that lives in a neighborhood
where you don’t have the luxury to focus internally
and ignore what’s going on outside your borders?
Among the reforms to emerge was the creation of
a free trade zone in Aqaba.
The city had tremendous tourism potential, as well
as a remarkable logistical potential; but unfortunately,
said, Fakhoury, remained a sleepy port town for
over forty years, essentially booming little bit
when there was regional activity and sliding into
recession when there was little traffic. "It
followed the economic cycle rather than actually
helping to lead," said Fakhoury, "and
in tourism it proved quite lacking in comparison
to what it could be."
Aqaba officials hope
commerce and tourism will come to the port city
just as these rare sea turtles do. |
Within the vision of pushing Jordan into the world
economy…it’s accession to the WTO, the
free trade agreements with the United States and
Europe, strides in education, as well as judicial
and political reforms, "His Majesty understood
that for reform to work it had to be comprehensive,"
said Fakhoury. "All of these building blocks
together will create the critical mass to unlock
the potential of the economy and raise the standards
of living for the people and enabling the economic
growth to move forward. Aqaba is but one brick in
that total puzzle."
Aquaba encompasses the entire coastline of Jordan,
all 20 miles of it. In order to assess its potential
as an engine of growth a Royal Commission was set
up, of which Fakhoury was a member. Included in
the analysis were the insights of entities such
as the World Bank, and USAID. "We looked at
the advantages of turning Aqaba into a free port
or special economic zone," said Fakhoury. "The
results were—we have a lot to gain, very little
to lose."
What materialized was a decentralized district
both financial and fiscal. Even the tax collection
was decentralized from the federal government. An
area of about 200 square miles was demarcated, and
an institution was created called the Aqaba Special
Economic Zone Authority (ASEZA), to manage and regulate
the zone. Fakhoury likens it to the New York/New
Jersey Port Authority in terms of management, or
Puerto Rico in regards to economic regime.
"We wanted to turn Aqaba from this sleepy
port town into a leading business and leisure destination,"
said Fakhoury. Instead of serving merely Jordan,
the Aqaba port is being set up to service the entire
Middle East, and handle trade incoming from Asia.
"It would make a lot of sense for that cargo
to come into Aqaba rather than go all the way around
through the Suez Canal," Fakhoury claims.
With an incredibly ambitious tourism, commercial/industrial,
and residential revitalization agenda, including
plans for a desalinization plant, natural gas pipelines,
and downstream exploitation of Jordan’s phosphate
and potash reserves in collaboration with American
chemical companies, an obvious question emerges—is
Aqaba physically large enough to handle such an
all-inclusive design? Fakhoury believes the answer
is yes. "We believe the current location can
absorb six to eight billion dollars of investment.
I think we are nearing about three billion dollars
of commitments right now." The borders of the
zone can be expanded in the future.
Best-practices are an important part of the development
plans. Fakhoury claims the environmental protection
regulations are probably the best in the Middle
East. Several projects have been rejected as not
being environmentally sound. A long- term master
plan for growth was adopted, ensuring investors
that the conditions under which they come in today
remain the same on down the road. "Aqaba is
small enough to be a model," said Fakhoury.
"We had a lot of ministries and municipalities
immediately imitate or adopt what we are doing in
Aqaba after we proved that it could be successful."
Such success takes more than foresight and planning,
however. It also takes, for a small country like
Jordan, a lot of support, much of which has come
in the form of the US taxpayer by way of USAID.
It’s a commitment for which Fakhoury says is
owed a lot of gratitude. The American people should
know that their investment is well spent.
|
Jordan 
