How will the World Bank Group program under preparation provide economic opportunities for both Jordanians and Syrians?
The $300 million Program for Results operation, scheduled for Board approval by end of September 2016, will support the Government of Jordan’s efforts to improve Jordan’s investment climate, attract investors, reform the country’s labor market and grant access to the Syrian labor force to contribute to Jordan’s economic growth. The project will also support trade facilitation and investment promotion especially in existing special economic zones and foster Syrian entrepreneurship activities. As part of the Program and in support of the Jordan Compact implementation, Syrian workers will receive work permits to be able to access formal jobs and the Ministry of Labor will establish employment facilitation services to implement the Work Permits reforms.
How does the World Bank Group program relate to the Jordan Compact announced at the London Syria Conference in February 2016?
The World Bank Group worked closely with the Jordanian Government, the UK’s DfID, the EU, USAID, and other donors on supporting the government in implementing the economic opportunities aspect of the Compact agreed on at the London conference of February 4, 2016. This involves attracting investments, creating jobs for Syrians and Jordanians and helping “incubate” the future post-conflict Syria reconstruction in Jordan. A set of key reforms of the investment climate are planned, including in the trade policy area to fully reap the benefits of the EU trade deal being currently negotiated with the Government of Jordan and which includes relaxation of the rules of origin and preferential access to the Common Market. The World Bank Group project fits into the Compact as it supports the implementation of key commitments of the London conference. The Bank Group is also working with a number of donors on a scale up of the Emergency Social Services and Resilience Project which will include labor intensive public work.
The Bank Group announced recently that 100,000 jobs will be created in Jordan in the next five years. Is that still the case?
There is no question that this is an ambitious target, but an ambitious target is needed as Jordan needs to create many more jobs to match the demand. This target is possible when you factor in all the ongoing efforts by the government and the expected reforms to boost job creation and investment.
In particular, the relaxation of work permit requirements alone has the potential to create 100,000 formal jobs by converting existing informal employment. Also, the economic multipliers – from the spending of wages to all the indirect links like truck drivers, building material manufacturers, etc., will create many jobs. Also, if the ambition of the Government of Jordan to significantly improve the investment climate materializes, this should attract new investments, in particular, but not only, in special economic zones which will be granted easier access to the EU market. Other opportunities may emerge, in particular in the construction sector as demand for construction in Jordan is rising and future reconstruction needs for Syria and other war-torn countries in the region will offer large opportunities to develop a construction industry. All these future market opportunities, if they materialize as the Government of Jordan implements its Compact and related economic reforms, will not only generate jobs for Syrians, but for a substantial number of Jordanians as well.
Are short-term job programs being planned until jobs are created and work permits are granted?
The overall program is being mutually reinforced with the immediate provision of work permits and cash for work programs provided by donors such as Germany and DfID that will make an immediate difference and thus complement medium- and long-term measures that attract investment. Through the existing Emergency Social Services and Resilience Project, the World Bank Group and a number of donors will finance labor intensive public works which will provide short term job creation. Additional measures include the planned trade preferences provided by the EU, provision of serviced industrial land in a number of SEZs in Jordan and attractive investor incentives. As always, implementation will be the challenge.
What is the Jordanian government's policy on economic opportunities for Syrians and are they granting work permits to the refugees?
Recognizing that many Syrians do not hold valid passports, the government has removed these as requirements for obtaining work permits. As of March 1, 2016, a Ministry of Interior identification card serves as a substitute for the passport. The Government also recently issued a notice that work permits for Syrians would be issued free of charge for a 3-month period.
Information on policy changes has been slow to reach the relevant parties, but the number of Syrians applying for work permits has picked up considerably. About 10,000 work permits have been granted to Syrians as of early June 2016. A variety of other policy options are currently being evaluated and discussed. There are many Syrians working in traditionally informal sectors including agriculture and construction (as well as services and manufacturing).
Where will the zones that benefit from the EU market preference be located and who will be employed there?
There are 11 zones identified by the Government which are located near most of the main population centers in Jordan. The firms that the government aims to attract in these zones are expected to employ a mix of Jordanians and Syrians. The development of the zones is led by Jordanian owned zone-specific authorities, in particular the Jordanian Investment Commission (JIC). The World Bank Group, as part of the Program for Results Economic Opportunities for Jordanians and Syrian Refugees, will support investment facilitation reforms and investment promotion of JIC, as well as other measures to attract investors. It will however not invest directly in the Zones infrastructure—these already exist. In that sense, this is not an SEZ operation, but rather one that supports economy-wide investment climate reforms in Jordan that should benefit businesses of all types and sectors, inside and outside these zones.
What is the World Bank Group doing to ensure that labor conditions meet international standards especially in light of recently reported labor disputes?
The preliminary view is that Jordan has one of the better track records in this area. As a result of scrutiny a decade ago – A Better Work Program (a joint IFC ILO initiative which has been running for some years) is in place which focuses on developing standard contracts and ensuring a good working environment. As part of the Program for Results preparation, we are doing a social and environmental assessment and, disbursements will be conditional on transparency regarding compliance with good practice of labor standards.
The Assessment proposes establishing worker’s centers at the special economic zones level to provide a bundle of services including: information on social and environmental standards, preventative medical check-ups, legal advice, and a secure grievance redress system for workers.
For more information contact:
In Washington: Lara Saade
Tel: +1 (202) 817-0243;
lsaade@worldbank.org