اقتصاد

World Bank agrees to lend Jordan $85 million to develop industries

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Al-Anbat -

Translated by - Noor Alsaleh.

The World Bank has agreed to provide Jordan with a loan of $85 million to finance a project that supports the Industries Development Fund, from which at least 500 companies are scheduled to benefit in developing their industries and promoting their products.

The project aims to "help industrial companies accelerate and diversify their exports by supporting the activation of the Industry Development Fund and the implementation of its programs", as the fund is considered part of the government's priority program for the period 2021-2023

The government is working to establish an "Industrial Development Fund" to finance the modernization and development of industrial companies, which will be implemented by the Ministry of Industry, Trade and Supply. The project will support the implementation of the Fund's basic programs, as well as develop its operational capacity to enable it to become an effective means of implementing industrial development programs.

The project, with a total value of 110 million dollars, will raise the level of industry and promote the development and promotion of exports; By providing grants to about 500 companies exposed to high commercial costs, and affected by the Corona pandemic in all governorates, as these grants will cover about 50 to 70% of the total implementation costs, with a ceiling of up to 100,000 dollars.

The Council of Ministers, in a session held last Sunday, chaired by Prime Minister Bishr Al-Khasawneh, approved the reasons for the draft system of the Industry Support and Development Fund for the year 2022, which aims to contribute to alleviating the burden of production costs and other costs that the national industry suffers from, in a way that enhances its competitiveness to enter the markets.

The Council of Ministers, in a session held last Sunday, chaired by Prime Minister Bishr Al-Khasawneh, approved the reasons for the draft system of the Industry Support and Development Fund for the year 2022, which aims to contribute to alleviating the burden of production costs and other costs that the national industry suffers from, in a way that enhances its competitiveness to enter new markets.

The system project contributes to diversifying the sources of national income, providing job opportunities, increasing exports and sales, and maximizing the benefit of the national economy in terms of giving Jordanian products a competitive advantage in the local and global markets.

Minister of Industry, Trade and Supply Youssef Al-Shamali, said during a previous meeting held at the Amman Chamber of Industry, that the government "will establish a fund to support the national industry, as allocations have been made for this within the state’s general budget for 2022.”

The data, also indicated that from the sub-outcomes of the proposed project at the level of results; Increasing revenues/exports, accessing new export markets, increasing new exportable products, increasing the number of male and female employees, increasing the level of productivity, and reducing carbon emissions.

The fund will provide similar grants to companies in the areas of modernizing production processes for manufacturing companies, enhancing their readiness to export, connecting to new markets and expanding into existing markets. It is expected that the fund's programs will support and stimulate the implementation of climate-smart solutions at the company level; to reduce the use of energy, water and raw materials.

The World Bank confirmed in the project data sheet, that the Jordanian economy weathered the Corona shock last year, better than many of its peers, but job creation has not yet been activated, explaining that Jordan’s real GDP recorded a strong recovery in the second quarter of 2021. (3.2% on an annual basis), however, labor market indicators for the second quarter of 2021 showed that the recovery did not enhance to create job chances.

And the bank indicated that the Corona shock affected the private sector, including the industrial sector, which is a major contributor to the exports of Jordanian goods, noting that the most important destinations for exporting Jordanian goods are the United States of America (mostly clothes), India (mostly chemicals) and the GCC countries. Gulf Cooperation (chemicals and agriculture), where chemicals and textiles constitute about 60% of Jordanian exports.

The bank stated that the manufacturing sector in Jordan will suffer from the effects of climate change in the coming decades, as the climatic risks that Jordan faces are significant increases in temperature, reduced rainfall, increased droughts and increased evaporation.

"Extreme heat and water scarcity increase energy demand, prices and financial burden; climate variability damages infrastructure and affects services, all of which are linked to industrial sector value chains, particularly when it comes to the already high water/energy insecurity,” the bank said, stressing that The financial situation in Jordan requires finding solutions from the private sector to these challenges, and motivating these solutions to build resilience and economic growth.


 
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