During the nineties, Jordan adopted ambitious economic reform and structural adjustment programs aimed at rectifying the structural imbalances of the economy. The country's economic and legal environment had been adjusted, and continues to adjust, in order to create a more open market-oriented economy conducive to foreign investments and to activate the market forces. Such economic measures aimed at liberalizing the economy, making it more competitive at the regional and international levels while integrating it with the world economy.
These reform initiatives also set the country ready for globalization as Jordan has made remarkable endeavors towards accessing global markets through concluding a number of Trade and Investment agreements including signing a bilateral investment agreement with the USA, and concluding an association agreement with the EU in 1997; moreover, Jordan is a member of the World Trade Organization (WTO), and opted to implement the Greater Arab Free Trade Area. Furthermore, Jordan signed in October 2000, an agreement for the establishment of a free trade area with the USA. Parallel to the economic stabilization and liberalization efforts, a set of legal measures has been implemented to modernize existing laws in addition to introducing new laws.
Moreover, and in order to further liberalize the economy and improve its competitiveness, Jordan embarked on an ambitious privatization program. At the outset , privatization in Jordan has not been an end in itself, but rather a catalyst for change to sustainable economic development leading to economic prosperity. Launched in 1996, endorsed in the National Privatization Strategy of August 1999 and enshrined in the Privatization Law no. 25 of July 2000, the program’s main objectives are summarized as follows: (1) raising efficiency and productivity in a competitive manner; (2)increasing private investment in infrastructure; (3) developing domestic capital market and consolidating public finance;(4) attracting local and foreign investments, technology and know-how; and (5) Alleviating the debt burden off the Treasury.
“Jordan’s privatization program ranks as one of, if not the most, successful programs in the Middle East region”. Acknowledged as such by regional and international specialized agencies, Privatization in Jordan recorded a number of socio-economic benefits through the completion of around 71 transactions yielding over $2.6 billion in proceeds that have been utilized, in accordance with the Privatization Law, to reduce the Government debt; to settle debts of privatized enterprises; to finance feasible socio-economic development projects; as well as funding retrospective subscriptions to the Social Security Corporation on behalf of employees of privatized enterprises. Most important of all, privatization has had a significant beneficial effect on employment, creating new direct and indirect jobs in the restructured sectors and privatized entities. Furthermore, these formerly State-owned companies are no longer, as some of them were, a continuous drain on the national budget, with the taxpayer financing their losses, they rather contribute to the national budget in the form of taxes. Political support, integrity, transparency and efficiency are the main criteria behind the witnessed success while safeguarding the rights of consumers and investors.
As privatization in Jordan is phasing out, it is worth mentioning that the main objective of enhancing the role of the private sector had been achieved by stimulating and encouraging the private sector in assuming its natural role in the economic activity which is the cornerstone of the concept of privatization.