July 2000

Jordan Update Memo

The following report outlines new developments in the past three months and the state of on-going developments.

1. Introduction and Summary

King Abdallah intends on turning the Kingdom into a regional centre for information technology firms and he chaired an international forum on the issue in March to examine how to achieve this goal.Urged on by the King, Jordanian experts chalked out an Information Technology (IT) development plan to turn Jordan's budding computer industry into the Kingdom's third largest source of hard currency after minerals and tourism. According to a recent Jordanian study, 2307 people a year earn diplomas in the field of IT in Jordan, but experts have said that only a few are really qualified to enter the highly competitive market. The plan, known as the Reach Initiative, aims to make 150 million dollars in foreign investment by 2004, to create 30,000 jobs and provide Jordan with 550 million dollars from IT-related exports.

2. Information Society Policy

His Majesty King Abdallah II is determined to exert all efforts needed to establish an efficient infrastructure in Jordan for successful Information Technology industries in the future. During a two-day meeting at the Dead Sea (24-25 March), King Abdallah stressed on the need to combine the efforts of the public and private sectors in the Kingdom and provide all the facilities to utilise the Jordanian capacities and establish a framework for a better IT infrastructure.

King Abdallah, in his speech, said that: "IT is the future, the goal for our country. We are serious because this is our principal chance to get Jordan to be a very special country in this part of the world and I believe we can do it. All the hard work that we have exerted over the past six or seven months in trying to get this industry moving in the right direction has accumulated in this forum that we have today. We have to concentrate on the year 2000, so that in 2001 Jordan is the place to be. The government will provide all the support needed to put in place the right legislation and infrastructure. I will be working very closely with the government to make sure that this happens."

King Abdallah told IT experts that there are three main issues they should tackle in their efforts to improve IT industries in Jordan. These are developing an IT infrastructure, implementing administrative reforms and judicial reforms. He pointed out that the private sector is the prime mover of the economy. The King said that the government needs to hear from the private sector on what sort of infrastructure and capabilities are required to make Jordan a better place for IT industries.

2.1 Government and administration (national, regional, local)

2.1.1 Jordan Investment Board (JIB) launches web site to facilitate investment promotion activities

Local and foreign investors seeking information about investment opportunities in Jordan can soon avoid the hassle of going to the headquarters of the Jordan Investment Board (JIB) to obtain needed facts about the country's business environment. Potential investors can access the domain name www.jordaninvestment.com on the WWW and learn basic facts about the investment climate in Jordan.

Investors often have to undergo a series of bureaucratic procedures that takes them month in order to secure several licences and needed permits. But last year the JIB, in its attempts to facilitate procedures in a bid to attract foreign investments, has formed an ad hoc committee to pool investment resources and to avoid overlapping of licensing procedures. Now investors can fill in an application form on site, which then will be referred to an investment promotion committee that will look into it. The site was developed in March and it recorded some 50,000 hits in its trial period (June 2000).

The site will provide potential investors with 90 per cent of the information they usually seek and will constantly be updated. It provides investors with information about the government, quality of life, an outlook of the country's economy and the financial and banking sectors. Among other things, the site gives investors reasons on why should they invest in Jordan, the different types of business entities, costs of setting up businesses and site maps and business sectors that enjoy certain exemptions. According to the 1995 Investment Promotion Law, the mining, industry, hotels and hospitals enjoy a 15 per cent exemption on income tax. The insurance and financial institutions are exempted by 35 per cent, and all other companies are exempted by 25 per cent.

2.2 Telecommunications and Internet

2.2.1 JTC offers full telecommunications services to clients

Jordan Telecom (JTC) is moving ahead to develop the telecommunications sector in the Kingdom. The company intends to spend JD 60 million on various investments to develop the telecommunications sector in Jordan, having six priorities for the upcoming two years.

These include: building a data transmission network, becoming a data and Internet Service Provider, giving satisfaction to its customers, decreasing tariffs, building an international hub in Jordan and developing the quality of voice-network for subscribers.

The company is working on a comprehensive data network to serve as the backbone of JTC's services in Greater Amman. This is expected to be complete by December 2000. The network aims to cover most of the major cities around the Kingdom by March 2001.

Half of the funding for this upgrade (JD 30 million) has already been allocated to the capital of its subsidiary, MobileCom. JTC will improve its performance by offering an efficient cost-effective, high quality telecommunications service and related value-added services to meet market requirements and anticipate future evolution. JTC aims to be the biggest Internet Service Provider (ISP) within the coming two years and the company will provide the service in both Arabic and English. The launch of the English version of the Internet portal will take place in October, while the Arabic version will be available in early 2001. Internet prices will be cut by 25 percent as of the end of this year while other price-cuts on all services will also witness a decrease. These include supplementary services and the integrated service digital network. JTC will delay its announcement about details of the upcoming price-cuts because of its discussions with the Jordan Telecommunications Regulatory Commission over JTC's future plans.

2.2.2 MobileCom underpins new value GSM network with massive build-out

MobileCom, Jordan's new GSM mobile communications operator, has begun surveying work for the planned build out of its GSM mobile network with initial assessment work beginning in Amman. MobileCom plans to have its network infrastructure established throughout all of the major cities of Jordan by the time its service is launched.

MobileCom is the new Jordanian public mobile telephone network operator, and is the operator of the mobile communications license granted to Jordan Telecom. The company combines local Jordanian capability with the technological advantages and network management / operation experience of one of the world's leading telecommunications operators, France Telecom. The company is to build a new, highly advanced, mobile communications network to serve Jordan, and has announced that it anticipates full public service in the fourth quarter of 2000.

MobileCom surveyors, technicians and engineers have already begun to identify key locations for the construction of radio base stations (RSBs) from building rooftops to ensure the highest level of service quality while taking into account the care and safety of the environment. The massive build-out of the advanced telecommunications infrastructure will be ready to support users when the services launch to the public in the fourth quarter of 2000.

2.2.3 Jordan Mobile Services Co. (Fastlink) expands their operation network

Jordan Mobile Services Co. (Fastlink) is working on a JD 30 million-project to expand its operation network to include more than 500,000 customers by the end of this year. Currently, the company has more than 150,000 customers. Meanwhile, Fastlink will expand its range of services by June. It will start providing a "Short Messages Service," and an Internet-linked service.

2.2.4 New licenses for Data Networks

Three new licenses have been issued from TRC (Telecommunications Regulatory Commission) for the private sector to the following companies:

• Global Internetworks Co.
• Amoun Telecommunication & Investment L.L.C
• Emirate International Trading L.L.C. (Info-Cell)

(See Appendix for more information)

2.3 Electronic Commerce

2.3.1 Commerce One to establish business site in Middle East

Commerce One Inc., a builder of Internet market places where business suppliers and buyers conduct commerce, reached an agreement with a group of Middle Eastern investors to expand into the region. Commerce One Middle East, is expected to provide businesses in fourteen nations in the region - Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey, United Arab Emirates and Yemen - with a system conduct commerce on the Internet. It will be based in Dubai, United Arab Emirates.

Mark Hoffman, Commerce One chairman and chief executive, said in a statement: "The launch of Commerce One Middle East is a very important opportunity for us to develop e-commerce throughout the Middle Eastern marketplace. We believe that there are large efficiencies to be gained by everyone and we are delighted to be extending the Global Trading Web to this region." (Source: Reuters)

2.3.2 Seminar on e-business held by STS Group

The Specialised Technical Services (STS) Group, one of the leading IT professional services providers in Jordan, organised a seminar on e-business at the Jordan Intercontinental Hotel. Speakers from six leading international companies in the e-business arena gave presentations on the significance of e-business.

Humam Mufti, GM of STS Group, introduced the speakers to the audience and stressed on the importance of introducing e-business in the country and the region. Mufti said that with the world rapidly moving into globalisation, open markets and free trade we in Jordan and the region need to be ready and well equipped with e-business tools to compete with others in the world. He said that STS would be able to provide total solutions to the Jordanian and Arab market for their e-requirements through the companies present at the event.

2.4 Education and research

2.4.1 Computer network development

The Ministry of Education will allocate JD 22 million to develop a computer network in its public schools. The Ministry will launch the three-year plan next September. In addition, it will spend JD 1.97 million to promote the teaching of the English language in its schools.

MobileCom partners with Princess Sumaya University for student development initiatives

MobileCom, Jordan's new GSM mobile communications operator, announced signing an agreement with the Princess Sumaya University College for Technology (PSUCT) that will see students receiving technical training and hands-on experience from MobileCom, paving the way for students who are looking for an exciting career at MobileCom.

The agreement is the first of its kind in Jordan, while MobileCom plans to extend the same agreement to several universities in Jordan, ensuring that an increased transfer of knowledge and skills is accomplished. MobileCom and the University will work together on organizing information and recruitment events, creating specialized seminars and workshops for the future and arranging students' visits to MobileCom premises as well as offering internships to undergraduate students to build up their skills during the education process.

Bank contributes $35,000 for technology labs in Jordan River Foundation

Her Majesty Queen Rania Al Abdullah received Citibank Jordan's General Manager Suhair Al Ali who delivered to the Queen a cheque of $35,000 in support of three technology labs for the Jordan River Foundation (JRF) to cater to underprivileged children.

The Citibank-JRF pilot project, which comes in recognition of the importance of computers and the Internet as a major educational tool in the 21st century, is entitled "Child and Technology." Under this project, three technology labs funded by the Citigroup Foundation will be placed in three JRF community centres in various parts of the Kingdom.

The grant is in line with His Majesty King Abdullah and Queen Rania's active drive towards the computerisation of schools and centres across the Kingdom, as well as the introduction of the usage of information technology into school curricula. The grant is also in line with the Citigroup Foundation's Global Technology Initiatives, which focuses on utilising information technology in assisting to educate underprivileged children around the world.

The Jordan River Foundation, a non-governmental non-profit organisation established by the Queen in 1995, is committed to work at the grassroots level and to assist underprivileged sectors of Jordan's society through sustainable micro-finance and income-generating projects. In 1997, the foundation also established the first child abuse prevention project in the Arab world. Through various community centres in less privileged areas of the Kingdom, the foundation offers its services to those in need, with particular emphasis on women and children. The Citibank technology labs will be placed in three of these community centres.

Students to get e-proficiency at new computer lab of the Amman Training Centre

Students at the Amman Training Centre have a better chance to be e-proficient with a new computer network lab equipped with high-tech machines installed in their centre. The U.S. Ambassador to Jordan William Burns inaugurated the 26-PC lab, funded with an American grant of $1 million.

"As the King has noted many times, the high-tech field holds great promise for Jordan. Certainly as we look around the world, those countries that have made an effort to teach their young people the latest computer skills are front and centre among emerging strong economies. I am happy that the U.S. can help in providing these training opportunities for Jordanians," Burns told students sitting on the newly installed computers. Director UNRWA (United Nations Relief and Works Agency) Jordan Gunnar Lofberg expressed his gratitude for the U.S. donation to UNRWA especially, he said, that it comes amid mounting financial pressures on the agency. (Source: Jordan Times, 10 May 2000)

After functioning for 28 years, the Amman Training Centre, run by United Nations Relief and Works Agency, still provides services to beneficiaries of Palestinian refugee students. This year, UNRWA's budget deficit was estimated at $34 million. It provides services to more than 3.6 million Palestinian refugees. The U.S. contributed $80 million to UNRWA's general fund for the year 2000 providing assistance for UNRWA's core services in education, health and social services.

According to a press release issued by the U.S. embassy, the U.S. is also investing $1.3 million in UNRWA's vocational training team in order to:

• Provide training for instructors and administrators
• Update and improve curriculum development,
• Track career placement of vocational training graduates
• Build strong relationships between UNRWA's vocational training centres and local employers in the private sector.

2.5 Copyright, intellectual property rights

2.5.1 U.S. removes Jordan from Special 301 Watchlist

United States Trade Representative, Charlene Barshefsky confirmed that both the United Arab Emirates (UAE) and Jordan have been removed from the USTR's Special 301 Watchlist. The news was announced with the release of the results of the USTR's 2000 "Special 301" annual review, a report that examines the adequacy and effectiveness of intellectual property protection in over 70 countries, according to a press release from Spot on Public Relations.

According to Ashok Sharma*, Middle East director for the BSA (Business Software Alliance), "Both the UAE and Jordan have made great strides forward in the protection of intellectual property rights, particularly in the reduction of software piracy. Both these countries are focused on building the infrastructure and creating the environment to encourage the IT sector and ensure that they take their own place in the global information economy."

Mr. Ashok Sharma* added "The USTR's recognition of the progress made by Jordan in fighting copyright piracy is also excellent news. Jordan, under the leadership of His Majesty King Abdullah, has committed to a far-reaching policy of creating a friendly environment for the IT industry and protecting intellectual property rights, which has already received recognition from the IT industry".

(* Source: Interview with Jordan Times)

3. International relationships and agreements

The Information Technology Conference at the Dead Sea MÖVENPICK Resort

More than 400 businessmen and senior officials took part in the forum representing 150 local and international computer companies. The meeting focused on the current situation of the computer industry in Jordan and possible ways of improving it. Responding to the King's call, five international computer companies decided to launch investment and training programs in Jordan to promote IT infrastructure. These are Sun Microsystems, Oracle, Cisco, Intel and Boscan Group.

In addition, the forum witnessed the signing of co-operation agreements between local and international companies. One of these was between the Bahraini Betlco Company and the two Jordanian Internet companies, FirstNet and Nets. While the other is between Maktoub and the Egyptian Hermes for e-mail services, in which the two companies agreed to form a $20 million fund to support the IT educational programs in the Kingdom. Experts believe that the two agreements are expected to attract more investment in Jordan, something that will certainly open new markets for local computer companies.

Jordan joins WTO as 136th member

On April 11, Jordan became the 136th member of the World Trade Organisation (WTO), leaving only six of the 12 Arab states of the Middle East region outside the Geneva-based body. Jordan's entry came just over six years after the Kingdom began negotiations to join the organisation's predecessor, the GATT. Jordan's accession was originally set to be approved by existing member countries in Seattle, but was finally agreed at a meeting of the WTO's ruling General Council on Dec. 17.It went into effect after final formalities, including ratification of the entry agreement by Parliament in Amman, had been completed.

Jordanian officials hailed the entry agreement as a turning point for development of the nation's economy, which over recent years has moved towards domestic liberalisation and freer trading with the outside world. Envoys from existing WTO member states welcomed Jordan's agreement to implement all its pledges on opening markets for goods and services without the phase-in period sought by many other developing countries applicants.

Jordan has also signed on (two so-called plurilateral WTO accords) agreements between some but not all member countries on government procurement and trade in civil aircraft. Other Middle Eastern states, apart from Israel, already in the body are Bahrain, Egypt, Kuwait, Qatar and the United Arab Emirates. Four more — Lebanon, Oman, Saudi Arabia and Yemen — are currently negotiating entry.

(Source: Reuters)

Jordan Telecom agreement with Fibre Optic Link Around the Globe (FLAG)

Jordan will be linked to the US through a super highway of fibre optic cables thanks to a $6.5 million agreement signed between Jordan Telecom and Fibre Optic Link Around the Globe (FLAG). The new link will boost Jordan's telephone and Internet capacity to the United States eight-fold as it is now with the European, Middle Eastern and Asian countries. The link to the US will be established through a FLAG cable circuit from Aqaba to New York via Britain. With this agreement Jordan will be completely linked to the whole world, from East to West.

The agreement will provide end users in Jordan with high quality and affordable Internet access service. The arrangement will facilitate end-to-end reliable and diversified conductivity from the Internet service provider sites in Jordan to the global Internet network and submarine capacity of 45 megabytes per second and satellite capacity of 16mbps, which will be available with interchangeable back up. It will also ensure adequate capacity to satisfy current and future needs of the ISPs and other broadband service providers. The circuit will be ready for commercial use by the end of July but additional work is needed with regard to the conductivity level. For this purpose Jordan Telecom has floated a request for peering and international connectivity with the global Internet, and the project will be completed in September this year.

The undersea cable is owned by FLAG telecommunications. Regional countries such as the Palestinian National Authority, Syria and Iraq are expected to tap into the cable's services via Jordan's $18 million bandwidth. FLAG comprises three sections: FLAG Euro-Asia which links Western Europe to the Middle East and Asia, FLAG Atlantic connecting New York to London and Paris and FLAG Pacific which stretches from Japan to the US and Canada. In 1998, Jordan became a landing party of the FLAG Europe-Asia cable system with a landing point to Aqaba from Asia.

IT training agreement between IBM and the Jordanian government

The Jordanian government and IBM have reached an agreement to develop an IT training programme for graduates in Jordan. The parties have agreed to set up a joint task force immediately to put in place a detailed program, that will focus on helping graduates to develop a complete set of IT capabilities, from basic IT skills to application and advanced web development. The agreement was made in Amman in a meeting between Prime Minister Abdel Al Raouf Al Rawabdeh and J. Michael Lawrie, general manager, IBM Europe, Middle East and Africa.

The program will include the agreement of criteria for selecting candidate graduates, the selection of up-to-date training curricula and details on how the training will be conducted. This follows an announcement by IBM recently of an agreement signed with the Egyptian government to train 15,000 graduates over five years. There, IBM has committed to offer an additional six months' training for the top 300 performers each year in its software labs in the UK and the US.

5. Market: Privatisation, foreign investment, mergers, acquisitions, call for tenders

Kuwaiti computer company intends to invest $40 million in a Jordanian Internet network

A Kuwaiti computer company intends to invest $40 million in a Jordanian Internet network. Yousef Mansour, president of the Jordan Telecommunications Regulatory Commission, said the company submitted its application to the IT conference, held last month at the Dead Sea. Mr. Mansour refused to name the company.

Appendix

Licenses issued from TRC

(Source TRC http://www.trc.gov.jo/category.htm)