ASSESSMENT REPORT ECONOMIC GROWTH AND … · quality control measures 137. coding. 138 data entry...

DISCLAIMER THE AUTHOR’S VIEWS EXPRESSED IN THIS PUBLICATION DO NOT NECESSARILY REFLECT THE VIEWS OF THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT OR THE UNITED STATES GOVERNMENT

ASSESSMENT REPORT

ECONOMIC GROWTH AND COMPETITIVENESS ASSESSMENT

MORGANA WINGARD FOR USAID

1 | ECONOMIC GROWTH ASSESSMENT USAID.GOV

TABLE OF CONTENTS

ACRONYMS 6

TABLE OF FIGURES 7

TABLE OF TABLES 8

EXECUTIVE SUMMARY 9 ASSESSMENT QUESTIONS 9 ASSESSMENT METHODLOGY 10 TIMELINE 10 APPROACH TO ANSWERING THE QUESTIONS 10 DATA COLLECTION 11 ASSESSMENT FINDINGS & CONCLUSIONS 11 GROUP 1 FINDINGS: SITUATIONAL ANALYSIS (AQ1 AND AQ2) 11 GROUP 1 CONCLUSIONS: SITUATIONAL ANALYSIS (AQ1 AND AQ2) 13 GROUP 2 FINDINGS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4) 13 GROUP 2 CONCLUSIONS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4) 15 GROUP 3 FINDINGS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6) 17 GROUP 3 CONCLUSIONS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6) 17 KEY THEMATIC FINDINGS 18 RECOMMENDATIONS LIST 19

INTRODUCTION 22 PURPOSE 22 ASSESSMENT QUESTIONS 22

ASSESSMENT METHODLOGY 23 TIMELINE 23 APPROACH TO ANSWERING THE QUESTIONS 24 GROUP 1: SITUATIONAL ANALYSIS (ASSESSMENT QUESTIONS 1 AND 2) 24 GROUP 2: UNDERSTANDING THE IMPLICATIONS (ASSESSMENT QUESTIONS 3 AND 4) 24 GROUP 3: THE PROGRAMMATIC RESPONSE (ASSESSMENT QUESTIONS 5 AND 6) 24 DATA COLLECTION METHODS 25 PRIMARY DATA COLLECTION 25 SECONDARY DATA SOURCES 26 DATA ANALYSIS PROCEDURES 26 STUDY LIMITATIONS 27

ASSESSMENT FINDINGS & CONCLUSIONS 28 GROUP 1 FINDINGS: SITUATIONAL ANALYSIS (AQ1 AND AQ2) 28 MACROECONOMIC ENVIRONMENT 28 EXPORTS AND INVESTMENT 31 DEMAND 32 FISCAL REFORMS 33


SECTORS 34 GROUP 1 CONCLUSIONS: SITUATIONAL ANALYSIS (AQ1 AND AQ2) 37 GROUP 2 FINDINGS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4) 38 GROUP 2 FINDINGS: AQ3 STAKEHOLDER PRIORITIES 38 GOJ PRIORITIES 39 DONOR AND INTERNATIONAL INSTITUTION PRIORITIES 40 PRIVATE SECTOR PRIORITIES 41 GROUP 2 CONCLUSIONS: AQ3 STAKEHOLDER PRIORITIES 45 GROUP 2 RECCOMENDATIONS: AQ3 STAKEHOLDER PRIORITIES 46 GROUP 2 FINDINGS: AQ4 KEY CHALLENGES AND OPPORTUNITIES 46 CROSS CUTTING CHALLENGES AND OPPORTUNITIES 46 WOMEN’S PARTICIPATION IN THE WORKFORCE 49 COORDINATION 53 KEY ASSESSMENT AREAS CHALLENGES AND OPPORTUNITIES 54 GOVERNMENTAL EFFECTIVENESS 60 GROUP 2 CONCLUSIONS: AQ4 KEY CHALLENGES AND OPPORTUNITIES 64 GROUP 2 RECOMMENDATIONS: AQ4 KEY CHALLENGES AND OPPORTUNITIES 65 GROUP 3 FINDINGS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6) 65 GROUP 3 FINDINGS: AQ5 DONOR INTERVENTIONS AND APPROACHES 65 CONTEXT 67 DONOR LANDSCAPE 68 APPROACHES 70 GROUP 3 CONCLUSIONS: AQ5 DONOR INTERVENTIONS AND APPROACHES 73 GROUP 3 RECOMMENDATIONS: AQ5 DONOR INTERVENTIONS AND APPROACHES 74 GROUP 3 FINDINGS: EDE PORTFOLIO 74 JOB CREATION AND EMPLOYMENT 76 TARGETS 77 EMPLOYMENT APPROACHES 79 ACCESS TO FINANCE 81 GENERAL PORTFOLIO CHALLENGES AND OPPORTUNITIES 85 EFFECTIVENESS OF APPROACHES 85 GROUP 5 CONCLUSIONS: AQ 6 EDE PORTFOLIO 88 GROUP 5 RECCOMENDATIONS: AQ 6 EDE PORTFOLIO 88

INSIGHTS AND RECOMMENDATIONS 90 KEY THEMATIC INSIGHTS– BACKGROUND AND RATIONALE 90 EMPOWERING WOMEN 90 ALIGNING OBJECTIVES AND APPROACHES 91 STABILIZING THROUGH DEMAND-DRIVEN STIMULUS 93 FACILITATING INCLUSIVE MARKET SYSTEMS 94 INTEGRATING POLITICAL ECONOMY 95 EFFECTS ON BUSINESS ENVIRONMENT REFORM 96 PROGRAMMATIC APPROACHES 97 CULTIVATING CONNECTEDNESS 98 CRAFTING EFFECTIVE STRATEGY 99


KEY THEMATIC RECOMMENDATIONS 100

ANNEXES 102 ANNEX A: BALANCING URGENCY AND COHERENCE: A CASE STUDY 102 1. IS IT REASONABLE TO EXPECT A NEWLY FORMED GOVERNMENT ENTITY TOBECOME OPERATIONALLY EFFECTIVE WITHIN THREE YEARS? 102 2. ARE THERE REASONS TO EXPLAIN JIC’S LACK OF PROGRESS WITH EXPORTPROMOTION? 103 3. WILL SPINNING IT OUT ACTUALLY SOLVE THE PROBLEM? 104 ANNEX B: FACILITATING MOVEMENT TOWARDS CONSENSUS 104 EXPORT POTENTIAL 104 EMPLOYMENT POTENTIAL 105 ANNEX C: ECONOMIC GROWTH INTERVENTIONS 106 ANNEX D: HUMANITARIAN INTERVENTIONS – SYRIAN REFUGEE RESPONSE 127 ANNEX E: PRIVATE SECTOR TECHNICAL REPORT 128 STUDY OBJECTIVES 129 STUDY OVERVIEW 129 RESPONDENTS 129 SAMPLING 130 SAMPLING FRAME 131 SAMPLE DESIGN AND SELECTION 131 REPLACEMENT PROCESS 132 RESPONSE RATES 133 QUESTIONNAIRE REVIEW: 134 TRANSLATION PROCESS: 134 SCRIPTING PROCESS: 135 INTERVIEWERS AND TRAINING 135 FIELD TEAM COMPOSITION 136 QUALITY CONTROL MEASURES 137 CODING 138 DATA ENTRY AND PROCESSING 138 PROJECT SCHEDULE 139 A SPECIAL NOTE ON FIELDWORK CHALLENGES 140 APPENDIX A: IN-FIELD QUALITY CONTROL – BACK CHECK CHECKLIST 142 APPENDIX B: IN-FIELD QUALITY CONTROL – QC SUPERVISOR REPORTS 144 APPENDIX C: POST-FIELD DATA PROCESSING AND QUALITY CONTROL PROCEDURE CHECKLIST 146 DATA QUALITY/CLEANING CHECKLIST 146 APPENDIX D: STUDY’S QUOTAS VS. ACHIEVED 148 GOVERNORATE TARGETS: 148 TOURISM SECTOR TARGETS: 148 COMPANY SIZE TARGETS: 149 ISIC TARGETS: 149 ANNEX F: PRIVATE SECTOR SURVEY QUESTIONNAIRE 154 SCREENING QUESTIONS 155


COMPANY INFORMATION 156 THE BUSINESS AND SOCIAL ENVIRONMENT 161 COMPANY PERFORMANCE 168 ACCESS TO FINANCE 171 WORKFORCE AND EMPLOYMENT 175 “CONNECTEDNESS” 180 ANNEX G: ASSESSMENT STATEMENT OF WORK 183 INTRODUCTION 183 PURPOSE OF THE ASSESSMENT 183 ASSESSMENT QUESTIONS 183 ECONOMIC GROWTH AND COMPETITIVENESS ASSESSMENT QUESTIONS 183 ASSESSMENT DESIGN AND METHODOLOGY 184 PHASE 1: DESK REVIEW 184 PHASE 2: DATA COLLECTION 185 ASSESSMENT TEAM COMPOSITION 186 DELIVERABLES AND TIMELINE 187 ANNEX H: ASSESSMENT DESIGN WITH DATA COLLECTION INSTRUMENTS 188 DEVELOP THE DATA COLLECTION INSTRUMENTS 199 COLLECT AND ANALYZE THE DATA 199 INITIAL DOCUMENT REVIEW AND DONOR MAPPING 201 DATA COLLECTION 201 ANALYSIS 202 REVIEW OF THE EDE’S PORTFOLIO 203 GENDER AND SOCIAL INCLUSION 206 DOCUMENT REVIEW AND SECONDARY DATA ANALYSIS 207 PRIMARY DATA COLLECTION AND ANALYSIS 207 CAPTURING THE INFORMAL ECONOMY 207 ASSESSMENT, CONCLUSIONS AND RECOMMENDATIONS 208 WORKPLAN 208 ANNEXES 210 ANNEX I: BASIC CONCEPTS 210 ANNEX II: JORDAN ECONOMIC SECTOR DATABASE 213 ANNEX III: TWELVE PILLARS OF COMPETITIVENESS 214 ANNEX IV: GETTING TO ANSWERS (GTA) 215 ANNEX V: QUALITATIVE INTERVIEWS / INITIAL CONTACT LIST 219 ANNEX VI: SAMPLE QUESTIONS FOR QUALITATIVE INTERVIEWS 226 STANDARD INTRODUCTION 226 QUESTIONS FOR JORDANIAN GOVERNMENT INSTITUTIONS 227 QUESTIONS FOR USAID AND US GOVERNMENT 228 QUESTIONS FOR PROJECT IMPLEMENTERS 232 MORE SPECIFIC QUESTIONS BY COMPONENT OR ACTIVITY 233 QUESTIONS FOR THE PRIVATE SECTOR 236 QUESTIONS FOR GENDER AND SOCIAL INCLUSION (GESI) INFORMANTS 238 ANNEX VII: ROLES AND RESPONSIBILITIES 246 ASSESSMENT TEAM MEMBERS AND DESIGNATED TASKS 246


ANNEX VIII: PRIVATE SECTOR SURVEY: SAMPLING PLAN 1 INTRODUCTION 1 PROBABILITY-BASED SAMPLING 1 NON-PROBABILITY SAMPLING 1 SAMPLING UNITS 2 SAMPLING FRAMES 3 SAMPLE SIZE 6 SAMPLE QUOTAS 6 TOURISM SECTOR SEGMENTATION 7


ACRONYMS AFD French Agency for Development BEE Business Enabling Environment BEST Building Economic Sustainability through Tourism CBJ Central Bank of Jordan CDCS Country Development Cooperation Strategy DANIDA Danish International Development Agency DOS Department of Statistics EDE Economic Development and Energy ESCB Energy Sector Capacity Building FDI Foreign Direct Investment FGD Focus Group Discussion FRPFM Fiscal Reform and Public Financial Management FTEs Full-Time Employees GAC Global Affairs Canada GBD General Budget Department GDP Gross Domestic Product GIZ Deutsche Gesellschaft fur Internationale Zusammenarbeit GNP Gross National Product GoJ Government of Jordan GTA Getting to Answers GVCs Global Value Chains HLS Healthcare and Life Sciences IFC International Finance Corporation ILO International Labor Organization IMF International Monetary Fund IRC International Rescue Committee ISIC International Standardized Industrial Classification System JICA Japanese International Cooperation Agency JCP Jordan Competitiveness Program JLGF Jordan Loan Guarantee Facility KII Key Informant Interviews KOICA Korea International Cooperation Agency LENS Local Enterprise Support Project MESP Monitoring and Evaluation Support Project MOIT Ministry of Industry and Trade MOF Ministry of Finance MOPIC Ministry of Planning and International Cooperation MSME Micro Small Medium Enterprises SCHEP Sustainable Cultural Heritage Through Engagement of Local Communities Project SOW Statement of Work UNDP United Nations Development Program USAID United States Agency for International Development UNICEF United Nations Children’s Fund WEF World Economic Forum


TABLE OF FIGURES Figure 1: Annual percent GDP Growth in Jordan 2000-2016 ............................................................... 29 Figure 2: Regional Benchmarks: Annual Percentage Growth Rate in GDP for 2014-2016 ... 30 Figure 3: Foreign Direct Investment - Net Flows ....................................................................................... 31 Figure 4: Trends in the Components of Demand ....................................................................................... 32 Figure 5: Sectoral Share of GDP ......................................................................................................................... 34 Figure 6: Business Outlook by Sector .............................................................................................................. 36 Figure 7: Projected Business Performance .................................................................................................... 36 Figure 8: Primary Business Financing Means ................................................................................................ 42 Figure 9: Financial Health ....................................................................................................................................... 42 Figure 10: Impact of Business Revenues and Profits by Sector ........................................................... 43 Figure 11: Percentage of Businesses Exporting ........................................................................................... 44 Figure 12: Firm Aspirations by Sector ............................................................................................................. 44 Figure 13: Perception of the Impact of Refugees on Businesses ......................................................... 48 Figure 14: Threats of Terrorism and the Costs on Businesses by Sector ...................................... 49 Figure 15: Business Hiring Trends...................................................................................................................... 50 Figure 16: Employment Trends in the Private Sector - Youth and Women ................................ 51 Figure 17: Main Challenges in Hiring and Retaining Women .............................................................. 51 Figure 18: Challenges in Hiring and Retaining Women .......................................................................... 53 Figure 19: Availability of Required Skills to Fill Vacancies, by Sector .............................................. 56 Figure 20: Availability of High Quality Professional Training Services by Sector ...................... 57 Figure 21: Reduction of Incentives to Invest due to Taxes, by Sector ............................................. 58 Figure 22: Importance of Access to Finance to Business Performance and Growth ............... 59 Figure 23: Extent of Perceived Government Favoritism ........................................................................ 61 Figure 24: Business Connectedness, by Sector ............................................................................................ 62 Figure 25: Formal Agreements ........................................................................................................................... 63 Figure 26: Availability of Business Services ................................................................................................... 63 Figure 27: Job Creation Achievements vs. Targets ................................................................................... 77 Figure 28: Reported Firms Access to Finance ............................................................................................. 82 Figure 29: Reported Number of Women-Owned Businesses Financed.......................................... 84


TABLE OF TABLES Table 1: Assessment Timeline ............................................................................................................................. 23 Table 2: Analysis Framework ............................................................................................................................... 24 Table 3: Interviews by Respondent Types ...................................................................................................... 25 Table 4: National Unemployment rate (%) ................................................................................................... 30 Table 5: Jordan Exports in USD .......................................................................................................................... 31 Table 6: Fiscal Balance ............................................................................................................................................. 33 Table 7: Public Debt as a Percentage of GDP .............................................................................................. 33 Table 8: Government of Jordan's target Sectors with Value Added and Growth Targets ... 35 Table 9: Developments and Achievements ................................................................................................... 37 Table 10: Donor Priorities ..................................................................................................................................... 66 Table 11: Overview of USAID EDE Areas of Focus .................................................................................. 76 Table 12: Reported Progress on Policy Reform Indicators (2017) .................................................... 80 Table 13: Overview of Key Opportunities for Sustainability in the EDE Portfolio .................... 88


EXECUTIVE SUMMARY The USAID/Jordan Economic Development and Energy (EDE) team requested the USAID Monitoring and Evaluation Support Project (MESP) to undertake a broad-spectrum Economic Growth and competitiveness Assessment. As part of this assessment, the MESP team was also requested to identify the interventions and approaches that have had a positive impact on competitiveness and economic growth in Jordan, whether implemented as part of the USAID EDE portfolio or implemented by other actors, such as other donors and/or the Government of Jordan (GoJ).

This assessment serves as a follow-up to the 2012 Jordan Economic Growth Assessment to critically examine Jordan’s economic growth trajectory and competitiveness, as well as major challenges and opportunities to inform USAID’s understanding of economic growth and employment strategies for the country. Specifically, the assessment will examine and present changes, opportunities, challenges, lessons learned, donor mapping, and specific recommendations at two levels:

1. Sectors of the Jordanian economy (those examined by the 2012 Assessment)

2. Jordan’s macroeconomic situation

With an emphasis on learning to inform future programming, the assessment will also focus on identifying and understanding the most effective interventions, especially as they relate to competitiveness and economic growth.

ASSESSMENT QUESTIONS

In addressing the stated purpose, the assessment will explicitly answer the following questions.

AQ1 How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

o What are the key growth (identified by trend analysis in terms of revenue generation, employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan, particularly over the next 3-5 years?

AQ2 How has the macroeconomic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment and MSME growth) changed since the 2012 Economic Growth Assessment?

o What are the effects of these changes, both at the firm and at the national level?

AQ3 What are the priorities within the Private Sector and key stakeholders (GoJ, subject matter experts, donors etc.), as they relate to competitiveness and economic growth? Why?

AQ4 What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders (subject matter experts, GoJ, donors etc.), when it comes to the following key areas:

o Business Enabling Environment

o Investment Promotion and Facilitation

o Exports Promotion and Facilitation

o Employment

o Micro, Small and Medium Enterprise (MSME) Growth

AQ5 What types of interventions and approaches are being implemented (across all donors, GoJ) to support economic growth and competitiveness in Jordan?


o What have been some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan?

AQ6 To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness?

o Which of these interventions and approaches (for example cluster/ecosystem approach versus a sector-focused approach) are more effective when it comes to promoting economic growth and competitiveness? Why?

o Which of these interventions and approaches are more likely to sustain without additional support? Why?

ASSESSMENT METHODLOGY

TIMELINE

The assessment began with preliminary meetings with USAID EDE office team members in August 2017. On September 10, the assessment team officially convened to kick off the assessment. Building on the initial meetings with USAID, the assessment team finalized the assessment design and submitted to USAID at the beginning of October. Primary data collection began that same month with key informant interviews and continued through December. The Private Sector Survey was designed during September and October and officially launched in mid-November.

APPROACH TO ANSWERING THE QUESTIONS

To more effectively address the assessment questions, the assessment team created an analysis framework that included grouping the assessment questions into three separate buckets.

Group 1: Situational Analysis (assessment questions 1 and 2)

To develop a clear understanding of Jordan’s current level of growth and competitiveness, key trends that have already unfolded, and new patterns that are now emerging, the assessment team developed a situational analysis of the macroeconomic environment.

Group 2: Understanding the Implications (assessment questions 3 and 4)

The second part of the methodology focused on clarifying how the present status and trends in Jordan’s economic growth and competitiveness are impacting performance, decision-making, and strategy among relevant stakeholder groups that include the private sector, the GoJ, and donors. Through this understanding, the assessment team developed a clearer picture of what each stakeholder group viewed as a challenge or opportunity.

Group 3: The Programmatic Response (assessment questions 5 and 6)

As part of question 5, the assessment team gathered information to create an inventory of interventions and approaches being implemented by the larger donor community to support economic growth and competitiveness. Through this process, the team identified challenges and opportunities regarding the development and implementation of interventions from the perspective of the donors and facilitated learning around these experiences.

The team used a similar approach to address question 6 as they did for question 5 but focused more intensely on EDE activities to understand their efficacy and sustainability.


DATA COLLECTION

Secondary Data Sources

Major secondary sources consulted for this assessment include assessments, evaluations, research papers, activity documents and news articles produced by a range of stakeholders such as the GoJ, donors, USAID, think tanks, media outlets, and subject matter experts.

Primary Data Collection

The assessment team collected data from a variety of stakeholders through in-depth interviews. In total, the team conducted 68 interviews, developing and utilizing specific instruments for each set of stakeholders. Interviews were conducted with GoJ officials, donor representatives, USAID implementing partner staff, private sector actors and US government officials.

Private Sector Survey

To better ascertain the perspective of private sector entities in Jordan regarding existing challenges and possible opportunities, the assessment team developed and implemented a survey of businesses operating in the country. The assessment team used the KINZ database which contains 80,000 registered businesses in Jordan create a sampling frame and survey 1,870 companies throughout Jordan.

Study Limitations

Given the timeframe of the assessment, the team attempted to interview all relevant stakeholders. Nevertheless, conducting interviews with every relevant informant was unfeasible due to time constraints, political reasons, or logistics. Specifically, in relation to assessment question six, the team was unable to conduct extensive interviews with EDE beneficiaries from all activities. Additionally, informal businesses are not included in the KINZ database. As such, the team was unable to capture the perspectives of informal businesses in the private sector survey.

ASSESSMENT FINDINGS & CONCLUSIONS

GROUP 1 FINDINGS: SITUATIONAL ANALYSIS (AQ1 AND AQ2)

Macro environment

From 2000-2009, economic growth in Jordan appeared relatively strong with an average growth rate of 6.5 percent. Beginning in 2010, Jordan’s economy entered a period of economic deceleration.

Real GDP growth for 2017 is expected to increase to 2.1 percent, mostly as a result of robust performance in tourism, which remains a critical sector of the economy.


Since 2012, the labor market has faced a rate of unemployment that has increased from 12.2 percent to 18.1 percent in the first half of 2017. 1 The poverty rate has also increased from 14.4 percent in 2010 to an estimated 20 percent in 2016.2 This is largely connected to the Syrian refugee influx into Jordan.

A closer examination of the unemployment rate show that there remains a stark divide between male and female employment. According to the department of statistics and the World Bank, unemployment for males is around 13.7 percent and 33.5 percent for females.

Exports and investment

Exports have experienced stagnation in growth since 2012, in large part because of disruptions along historic trade routes with Syria and Iraq. There are some bright spots looking forward with predicted growth in mining and quarrying.

To bolster Jordan’s overall competitiveness, the government has also developed a Human Resource Development Strategy, aimed at ensuring Jordanians are able to develop appropriate skills for employment through education and to increase Jordan’s competitiveness.

Jordan also recently ratified the WTO Trade Facilitation Agreement (TFA). The TFA contains provisions for expediting the movement, release, and clearance of goods.

As part of the Jordan Compact’s incentives to business, the EU has relaxed the rules of origin starting in July 2016 and will be valid until the end of 2026. The rules of origin have been applied to exports of Jordanian origin that are manufactured in designated development zones and industrial estates in Jordan including 50 harmonized system non-agricultural chapters.

Demand

There has been a decline in demand from 2012 to 2016. During this period, Jordan generally managed to maintain macroeconomic stability while undertaking significant policy reforms and regional instability. In fact, the GoJ improved its fiscal position by reducing the budget deficit from 8.3 percent in 2012 to 3.2 percent by 2016.

Given the government’s fiscal situation, in August 2016, Jordan agreed to a USD 723 million Extended Fund Facility (EFF) with the IMF with the objective of bringing down Jordan’s debt-to-GDP ratio to 77 percent by 2021.

Sectors

Since 2012, the public sector has been the largest contributor to national GDP. Nevertheless, the government’s sectoral share of GDP relative to the private sector is declining. Agriculture, utilities, finance and insurance, real estate and other services have seen consistent growth.

Drawing from the private sector survey, respondents operating in the financial and insurance sector appeared to be quite optimistic with 70 percent reporting they thought their sector was headed in the right direction. Respondents in public administration/health/education sector were also optimistic, with 69 percent reporting a positive outlook.

1 The 2017 figure represents the results of a new unemployment counting methodology adopted by DoS starting in the first quarter of 2017 2 Jordan Economic Growth Plan 2018-2022


On the other end of the spectrum, respondents in the mining and quarrying, real estate, and construction sectors, were either pessimistic or reported not knowing

GROUP 1 CONCLUSIONS: SITUATIONAL ANALYSIS (AQ1 AND AQ2)

Conclusion 1 - Jordan’s economy has experienced a downward trend in the period from 2012-2016 as key output indicators have steadily decreased and unemployment has increased.

Conclusion 2 - The disparity between male and female unemployment has been and will most likely continue to be a major challenge to economic growth.

Conclusion 3 - The government continues to be the largest employer; however, fiscal consolidation efforts will present challenges for the government’s ability to supply stable jobs moving forward. Opportunities for public private partnerships (PPPs) will increase.

Conclusion 4 - Despite the general economic downward trend, there is room for some optimism. Tourism has shown some resilience with leisure tourism increasing for the first time since 2010 and international demand for potash on the rise.

Conclusion 5 - Refugees from Syria have been a significant issue for the Jordanian economy. Their integration into the formalized labor force has been supported by the international community, including USAID, however the uptake in work permits has been slower than expected.

Conclusion 6 - Market forces are not the only drivers in the economy. As indicated by the JEGP, the government has identified target sectors. Given the size and influence of the public sector in the economy, any action or targeted support to specific sectors or actors by the government (i.e. significant government investment, subsidies, deregulation, etc.), will have an oversized effect on growth.

GROUP 2 FINDINGS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4)

AQ3 Findings: stakeholder priorities

Data revealed myriad priorities, at times complementary and at times competing, related to economic growth and competitiveness amongst the GoJ, the private sector, and donors. Tensions between priorities of fiscal reform, inclusive employment and the handling of refugees, government intervention, and increasing local market demand have created a number of different uncoordinated streams of growth and competitiveness programs across Jordan.

The priorities of the Government of Jordan are outlined by the Jordan Economic Growth Plan (JEGP) 2018 -2022 which serves as a road map for how the government will accomplish a five percent (5%) growth rate by 2022. The JEGP outlines five (5) overarching high-level priorities including macroeconomic stability, increased competitiveness, sector development, social development and gender.

International Finance Institutions, led by the International Monetary Fund, are strongly focused on fiscal reforms and on decreasing Jordan’s rising debt to GDP ratio.

For the private sector the major priorities center on a need for an increase in sales and revenues and to drive demand in the local and domestic Jordanian market.


The major priority of the donor community lies in increasing employment and job creation. However, there is a split amongst donors over whether to focus on refugee employment or Jordanian employment. The assessment found that many donors including DFID and the EU were currently re-evaluating their economic growth portfolios and priorities are looking to USAID’s strategy to help them shape their own portfolios.

AQ4 Findings: Challenge and Opportunities:

Cross Cutting Challenges and Opportunities

The largest perceived cross-cutting challenge to economic growth found by the assessment team was the ongoing regional turmoil created by the wars in Syria and Iraq. Challenges can be broadly broken into two major categories: the impact of the influx of refugees, and increased fears of instability and violence within Jordan.

Women’s participation in the formal economy is one of the most well documented challenges in Jordan and was perceived to be a major cross-cutting challenge by the private sector and key stakeholders. The assessment found that one of the largest challenges to women’s participation in the workforce were biases and perceptions of women’s unsuitability for work in the private sector. Beyond negative perceptions around the roles and skills of women, the assessment found that physical and economic barriers continue to hamper women’s participation in the labor force including transportation.

A lack of coordination between and amongst key stakeholders in the Jordanian economy was found to be another cross-cutting challenge to growth. Interviewees from USAID, implementing partners and the private sector reported that a lack of coordination between the government and the private sector has hampered efforts to promote economic growth

Key Assessment Areas Challenges and Opportunities

The assessment found among key stakeholders interviewed, Jordan’s rising unemployment rate was one of the most critical and complex issues facing Jordan’s economic growth and stability. The relative instability in growth in the private sector was perceived by key stakeholders to be a driving factor of the rising unemployment rate. The exception to this is in the public sector, which continues to be one of the largest employers in Jordan, especially for women.

Government of Jordan respondents, USAID respondents, and implementing partners reported that in some sectors - particularly in energy, IT, and manufacturing - there is a general lack of capacity among workers. There was a perception among stakeholders interviewed that current training programs and Technical Vocational Education Training (TVET) programs are ineffective in addressing this skill gap.

USG stakeholders and GoJ stakeholders reported that cultural biases against working in “low class” jobs are another contributing factor to the misalignment between the supply of labor and the demands of the private sector.

Outside of employment, factors relating to the businesses enabling environment in Jordan were perceived by the private sector and key stakeholders as key barriers to growth and competitiveness in Jordan. The assessment found five key areas in the business enabling environment that were perceived to pose the biggest challenges to Jordan’s economy. Key areas identified were a lack of a stable policy environment, over regulation and high taxes, high fixed costs, access to finance, and governmental effectiveness (bureaucracy, capacity and favoritism).

Interview respondents suggested process reform and the implementation of E-Government solutions as one of the largest opportunities to decrease the challenges in the business enabling environment.

Reopening of borders with Syria and Iraq could have a positive benefit on trade.


GROUP 2 CONCLUSIONS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4)

Conclusion 7 - Competing priorities amongst stakeholders make it difficult to execute an effective strategy for growth. A growth strategy must be strategic and targeted to be effective. The competing priorities amongst key stakeholders create a challenge to economic growth in Jordan.

• The priorities of GoJ are too widespread to be either strategic or targeted• There is a large conflict between the priorities of fiscal austerity and reform, and the priorities

pushed forth by the donor community and some of the stated priorities of the GoJ

• The priorities of USAID and the GoJ, particularly around exports, do not appear to be in linewith the realities of the majority of businesses in the private sector in Jordan

Efforts should be made where possible to streamline priorities and work to ensure that different stakeholder priorities work in concert with each other.

Conclusion 8 - Donors are waiting for USAID to take a lead in setting economic growth priorities. The donor community is looking to USAID to provide leadership in setting economic growth priorities. Seen as a leader in economic growth programing and implementation in the region, USAID proactively steps into this leadership role. It may be able to work to help mitigate the issue of competing strategies and priorities towards economic growth.

Conclusion 9 - Fiscal reform as pushed by the IMF may, in the short term, make the situation worse for small businesses who depend on local demand for revenue. The majority of the Jordan private sector is made up of small to medium sized enterprises. According to the findings in the survey, the majority of these businesses are in poor financial health and are heavily reliant on local and domestic markets for sales and revenue. As the Jordanian economy has contracted in recent years and unemployment has risen, these MSMEs have seen decreases in revenue from local markets. As fiscal reforms are enacted that will raise the cost of living in Jordan, these markets will most likely shrink further, and in turn, will likely affect the health of MSMEs in the short-term. In order to maintain a focus on fiscal reform and still balance the issues for the MSMEs, alternative policies to cost of doing business should be explored.

Conclusion 10 – The importance of gender has not been internalized by key donors and institutions. Gender is an official stated priority of all donors and the GoJ. However, in interviews with key stakeholders from the government and the donor community, only those respondents who were working on issues of gender named gender as a priority within their institutions. The priority of gender and economic growth must be better understood and mainstreamed by key institutions and donors in Jordan.

Conclusion 11- Regional tensions and concerns of instability will continue to be a major factor in economic growth. The effects of the conflicts in Iraq and Syria will continue to affect Jordan in the near and mid-term. The effects of the refugee crisis and concerns about stability both within the region and within Jordan itself are expected to continue even after the end of the major conflicts within Syria and Iraq. This complex environment must continue to be considered when determining economic growth strategies and implementing economic growth programs and activities.

Conclusion 12 - Lack of female participation in the workforce is a major factor in economic growth stagnation. The lack of women’s participation in the economy is a major factor in the stagnation of growth in Jordan. With over 80 percent of women in Jordan excluded from the workforce the country


is losing out on a major productive resource. Currently women’s economic empowerment is still mainly seen as a social problem rather than an economic opportunity.

Conclusion 13 - Employment is a demand driven challenge, and without an increase in demand, unemployment is not expected to change in a meaningful way. Increases in sales and revenue among firms in the private sector were viewed as the best way to increase employment in the private sector in Jordan. Firms are not expected to increase hiring in a sustainable way without a corresponding increase in revenue.

Conclusion 14 - Capacity building remains a challenge but has yet to be overcome by current workforce development programs. The main reason for the lack of success of donor and government implemented capacity training programs was a mismatch between the training programs offered and the skills needed by the private sector.

Conclusion 15 - There is a lack of mutual understanding between the GoJ and the private sector. There is a strong disconnect between the GoJ and the private sector. There is a distinct lack of coordination and collaboration between the private sector which drives ill-targeted governmental interventions and feelings of mistrust towards the government from the private sector. Additionally, the changing and often opaque regulatory environment set forth by the GoJ has deterred the private sector from increasing investments in Jordan. Private sector actors note that the regulatory environment at local and national levels is oftentimes unclear. This ultimately provides a disincentive for potential investors.

Conclusion 16 - Taxes will continue to be high, other cost saving areas for businesses should be pursued. Given the need for the government to make up for shortfalls in their operating budget, it is expected that taxes will remain high if not increased in the short-term.

Conclusion 17 - Access to credit and financial services continues to be a challenge for the private sector in Jordan. Low appetites for risk among financial service providers and a lack of incentives for financial institutions to offer products targeted to MSMEs are key barriers to access to finance in Jordan.

Conclusion 18 - Streamlining processes is critical to addressing issues of corruption, capacity and bureaucratic barriers to economic growth. Process reform, namely automation and digitalization of existing processes, offer a quick and sustainable way of increasing the effectiveness of the business enabling environment in Jordan.

Conclusion 19 - The effects of the crisis in Syria and Iraq on export and trade will be long lasting, alternative trade partners should be prioritized. Private sector and governmental actors believe that once the conflicts are mitigated and the borders are reopened in Iraq and Syria, trade will resume and exports will rise to levels near those previous to 2011. However, the complete destruction of many areas of Syria and the massive displacement of people and businesses in Syria and Iraq may have permanently destroyed many of the pre-existing trade linkages between the three countries.

Conclusion 20 - There is a distinct lack of connectedness, formality and service provision in the private sector in Jordan. Many businesses do not collaborate with other businesses. Additionally, a significant amount of businesses do have formal contracts with their suppliers or clients.


GROUP 3 FINDINGS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6)

AQ5 Findings: Donor Landscape

Donor coordination has not caught up with complex landscape.

MOPIC has dedicated leadership but may not have the capacity to manage such a large and complex donor landscape.

Having realistic expectations for results and allowing implementers sufficient room to pilot various approaches and adjust is seen as critical.

Interventions with a smaller number of beneficiaries have allowed for more targeted use of resources and have shown positive results.

Co-funding programs is a way to leverage resources and incentivize coordination amongst donors.

Cost-shares with beneficiaries have proven successful on a small scale.

Significant room to support PPPs at all levels of government.

AQ6 Findings: EDE Portfolio

The assessment reviewed achievement under eight USAID activities: Jordan Loan Guarantee Facility (JLGF), Workforce Development Program (WFD), Energy Sector Capacity Building (ESCB), Fiscal Reform and Public Financial Management (FRPFM), Building Economic Sustainability through Tourism (BEST), Sustainable Cultural Heritage Through Engagement of Local Communities Project (SCHEP), Jordan Competitiveness Project (JCP), and Local Enterprise Support Project (LENS).

All activities have an objective of job creation and addressing some area of the business-enabling environment in Jordan. Five out of the eight activities reviewed were focused on increasing access to finance. All activities had some measure of gender targets, while three had specific objectives to improve access to productive resources for vulnerable or marginalized groups, including women.

Of the four key areas identified, the assessment found that, on the whole, the EDE portfolio had the most success in achieving its targets for interventions focused on the business enabling environment; had limited success in interventions focusing on increasing access to finance; and struggled to perform on job creation and inclusion. The assessment found that while activity interventions are not isolated and are crosscutting, the interaction/support amongst activities is insufficient and with a few exceptions, is not comprehensive nor strategic.

The assessment found few activities and interventions judged to be sustainable without funding from USAID or other donors. The major challenge around sustainability was a general lack of capacity among partner organizations (governmental and non-governmental) to carry on interventions after activities end.

GROUP 3 CONCLUSIONS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6)

AQ5 Conclusions: Donor Interventions and Approaches

Conclusion 21 - There is a definite need for greater coordination at the activity and the strategy level among different donors. The donor landscape is extremely complex and will most likely only increase in complexity over the next several years and there are many opportunities to enhance synergies and communication between donors.


Conclusion 22 - With a growing population and a limitation on resources within the government, there will be growing opportunities for donors to support public-private partnerships.

Conclusion 23 - MOPIC will continue to play a critical role in overseeing donor activity within Jordan. As such, donor support to MOPIC over the next several years will be crucial to manage the donor landscape.

Conclusion 24 - A number of donors are experimenting with demand driven innovative approaches that emphasize flexibility and realistic targets in the realm of economic growth programming. It will crucial to keep abreast of these programs and try to capture lessons learned as well as to learn how greater flexibility and learning can be incorporated into USAID programs, while still maintaining accountability.

AQ 6 Conclusions: EDE Portfolio

Conclusion 25 - USAID and EDE growth portfolio lacks a clear strategy.

Conclusion 26 - Unrealistic and unsuitable targets are hampering activities efficacy.

Conclusion 27 - Employment is demand driven, current targets do not reflect this.

Conclusion 28 - A major challenge facing EDE implementing partners was a lack of flexibility in their design.

Conclusion 29 - A lack of coordination and synergy among EDE activities impacted the effectiveness of some interventions.

Conclusion 30 - Market Systems Approaches, as seen in the LENS program design, are the best approaches to facilitate inclusive growth.

Conclusion 31 - Finding champions in key institutions and businesses is key for any approach or intervention sustainability.

KEY THEMATIC FINDINGS

Empowering Women

USAID TRANSFORMS, the new USAID communications campaign rolled out in January 2018, features “Empowering Women and Girls” as one of the campaign’s five cross-cutting themes.

Aligning Objectives and Approaches

The performance of the EDE portfolio since the start of the Arab Spring provides strong evidence that attempting to conflate stabilization and development can undermine progress on both.

Stabilizing Through Demand-Driven Stimulus

The Buyer Led model can have a direct and cost-effective impact on job creation in the MENA region.

The USAID AMEG Project was unable to find other approaches that demonstrated similar cost-effectiveness in creating jobs and attributing them directly to program activities.


Several members of the EDE team expressed discomfort with the idea of sharing costs with established, well-functioning firms to help achieve stimulus objectives related to job creation.

Facilitating Inclusive Market Systems

Inclusive growth is best achieved through the use of “market systems” approaches that seek to genuinely transform the capabilities and incentives of permanent players within a system through market facilitation techniques.

The literature generally supports the idea that the most effective way to engage the informal sector in the design of development strategies is through local economic development (LED) approaches such as the design of the LENS project.

Integrating Political Economy

Continued frustration across the donor community with Jordan’s capacity to decisively address challenges in the enabling environment.

There are significant political economy issues involved in EDE work that are particularly challenging in Jordan.

Big-bang policy reform programs rarely work; best successes involve incremental thinking and developing multiple tracks of influence.

Successful programs tackling enabling environment reforms enable IPs to shift investments between transaction/firm-level and institutional/regulatory level activities and allocate some funding towards activities to build broad based support for specific reforms.

Cultivating Connectedness

The private sector survey results show that there are very low levels of connectedness in Jordan. The LENS Program recognizes that the lack of connectedness is an issue and is making efforts to address it.

Crafting Effective Strategy

The trajectory and composition of Jordan’s future economic growth will be largely determined by its ability to make and attract new investments. The rationale for this is simple; of the three demand-side components of GDP (Consumption, Investment and Government Spending) investment is the most plausible path of new influence.

RECOMMENDATIONS LIST

The following recommendation list is organized by assessment question.

AQ3:

1. Conduct in-depth stakeholder analyses and implement concerted efforts of stakeholderengagement, to streamline and align the growth priorities of the GoJ, the donor community andthe private sector and to create buy-in on agreed upon priorities amongst different types ofstakeholders. Where possible activities and strategies should be designed to work in concert toachieve agreed upon goals and priorities.

2. USAID should take a leadership role within the donor community in setting growth priorities inJordan. If USAID more proactively steps into this leadership role, it may be able to work to helpmitigate the issue of competing strategies and priorities towards economic growth.


3. Implement policies and programs aimed at decreasing costs incurred by businesses to mitigate the effects of fiscal reform initiatives on MSMEs

4. The priority of gender in economic growth must be better mainstreamed by key institutions and

donors in Jordan. AQ4:

1. Gender needs to be prioritized as a means of economic growth and productivity, not as purely a social issue.

2. Strategies to address unemployment should be rooted in strategies to expand markets and increase sales and revenues for firms in the private sector

3. Capacity building programs must be reflective of private sector-identified demands in order to be effective.

4. Increase emphasis on public private partnerships to work to bridge the disconnect between the private and public sector.

5. PPP programing should contain interventions aimed at overcoming negative perceptions of government effectiveness in the private sector.

6. Programs aimed at decreasing non-tax related costs for businesses will help free up resources for the private sector to enable them to grow, add employees and invest in new products, market research, and better materials.

7. Addressing the risk appetite for banks will be key in increasing financial inclusion.

8. The donor community should consider supporting the Government of Jordan regarding the priorities identified in the Jordan Economic Growth Plan (JEGP). For example, donor support to the move to e-Government, which is an identified priority, should be considered.

9. There must be increased focus on building and expanding trade linkages for Jordan outside of the MENA region.

AQ5:

1. USAID should support public-private partnerships by helping to ensure that government actors at all levels have the capacity to negotiate and manage them.

2. USAID should continue to support MOPIC by reinforcing PMU funding to ensure adequate capacity within the Ministry.

3. USAID should emphasize flexibility in activity implementation.

4. USAID should explore ways to enhance donor coordination.

5. USAID should keep an eye on demand driven interventions being implemented by other donors to capture lessons learned.

AQ6:

1. USAID and EDE need to clarify their overall objectives and goals (inclusive growth, growth etc.).

2. Inclusive growth approach will probably yield the most stability friendly results in the short to mid-term.

3. USAID must work to ensure that activity interventions and their targets reflect overall strategy and are based on evidence.


4. Employment targets should be set as indicators of increases in demand/revenue not as primary measures of success.

5. Anticipate where the pressure points will be in terms of unemployment (i.e. not necessarily in manual labor) and work to design programs that either are focused on “acceptable employment options” or that address the gap in perceptions about suitability and status of certain types of jobs.

6. Where possible, flexibility should be encouraged by USAID and incorporated into implementing partner’s program design, so programs are responsive to the complex environment in which they operate.

7. In order to help facilitate coordination and collaboration (or at least avoid conflict) among activities USAID and EDE should internally improve the synergies between activities (strategy, design, implementation).

8. Activity designs should take sustainability into greater account and should actively work to find key sustainability champions in partner institutions early in program implementation

Key Thematic Recommendations

1. Incorporate gender considerations into every activity across the portfolio and earmark significant funds for this purpose within activity budgets.

2. Prioritize the use of approaches that demonstrate the value-add to business in terms of their bottom line or other priorities.

3. Clarify and prioritize specific development objectives for the EDE portfolio by developing an objective-level budget.

4. EDE should employ the “Buyer Led Approach to Enterprise Competitiveness” for all stabilization-oriented investments that target increased sales, job creation and export growth

5. From a benefit/cost perspective, established and successful local firms are the most appropriate and desirable platforms for USAID to leverage stimulus-oriented funding focused on opening new markets, showcasing demonstration effects, and driving rapid job creation.

6. Ensure that PMPs for activities using market systems approaches focus on collecting evidence of genuine changes in the incentives and capabilities of permanent players in the market system.

7. Leverage and scale the LENS program approach to address inclusive growth objectives at the local level.

8. Sector orientation may be more important where inclusive objectives are prioritized.

9. To the extent possible, focus on reform measures that have direct relevance to beneficiaries supported through the EDE portfolio and reasonable evidence that GoJ can be influenced to support the reform measures.

10. Identify and evaluate options for utilizing EDE funds for activities and investments that can strengthen incomes and impact beneficiaries across both public and private sector such as transformation of the residential finance system.

11. Should USAID decide to design and award a cross-cutting enabling environment reform activity, it should emphasize the role of contractor past performance in selection criteria and verify planned involvement of key personnel from previous program successes. Success with enabling environment reform is challenging. Those missions that have been successful have generally used a political economy based approach and understanding – so it would be a good idea to make sure that anyone who is selected for implementing an enabling environment reform activity has


used a modern PE based approach with success, and that the individuals who were involved in those past successes will also be involved in a substantial way i.e. just because an organization has that experience doesn’t mean they can replicate it without the key individuals that were involved.

12. Interventions in the EDE portfolio should be designed to improve connectedness among MSMEsbroadly, and within production systems specifically.

INTRODUCTION

PURPOSE

The USAID/Jordan Economic Development and Energy (EDE) team requested the USAID Monitoring and Evaluation Support Project (MESP) to undertake a broad-spectrum Economic Growth and competitiveness Assessment. As part of this assessment, the MESP team was also requested to identify the interventions and approaches that have had a positive impact on competitiveness and economic growth in Jordan, whether implemented as part of the USAID EDE portfolio or implemented by other actors, such as other donors and/or the Government of Jordan (GoJ).

This assessment serves as a follow-up to the 2012 Jordan Economic Growth Assessment to critically examine Jordan’s economic growth trajectory and competitiveness, as well as major challenges and opportunities to inform USAID’s understanding of economic growth and employment strategies for the country. Specifically, the assessment will examine and present changes, opportunities, challenges, lessons learned, donor mapping, and specific recommendations at two levels:

1. Sectors of the Jordanian economy (those examined by the 2012 Assessment)2. Jordan’s macroeconomic situation



In addressing the stated purpose, the assessment will explicitly answer the following questions.

AQ1 How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

o What are the key growth (identified by trend analysis in terms of revenue generation,employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan,particularly over the next 3-5 years?

AQ2 How has the macroeconomic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment and MSME growth) changed since the 2012 Economic Growth Assessment?

o What are the effects of these changes, both at the firm and at the national level?

AQ3 What are the priorities within the Private Sector and key stakeholders (GoJ, subject matter experts, donors etc.), as they relate to competitiveness and economic growth? Why?


AQ4 What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders (subject matter experts, GoJ, donors etc.), when it comes to the following key areas:

o Business Enabling Environment

o Investment Promotion and Facilitation

o Exports Promotion and Facilitation

o Employment

o Micro, Small and Medium Enterprise (MSME) Growth

AQ5 What types of interventions and approaches are being implemented (across all donors, GoJ) to support economic growth and competitiveness in Jordan?

o What have been some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan?

AQ6 To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness?

o Which of these interventions and approaches (for example cluster/ecosystem approach versus a sector-focused approach) are more effective when it comes to promoting economic growth and competitiveness? Why?

o Which of these interventions and approaches are more likely to sustain without additional support? Why?

ASSESSMENT METHODLOGY

TIMELINE

The assessment began with preliminary meetings with USAID EDE office team members in August 2017. On September 10, the assessment team officially convened to kick off the assessment. Building on the initial meetings with USAID, the assessment team finalized the assessment design and submitted to USAID at the beginning of October. Primary data collection began that same month with key informant interviews and continued through December. The Private Sector Survey was designed during September and October and officially launched in mid-November. Table 1 below illustrates the assessment timeline, including the main assessment phases.

TABLE 1: ASSESSMENT TIMELINE

Table 1: Assessment Timeline

PHASE DATES

Inception Phase August 2017 – October 2017

Data Collection Phase October 2017 – December 2017

Private Sector Survey November 2017 – December 2017

Analysis Phase December 2017 – January 2018

Briefings and Reporting Phase January – February 2018



This section describes the overall methodology that was used to answer the assessment questions. The assessment team used a set of interrelated methodologies pertinent to answering each of the assessment questions. To more effectively address the assessment questions, the assessment team created an analysis framework that included grouping the assessment questions into three separate buckets (Table 2).

Table 2: Analysis Framework

GROUP 1: SITUATIONAL ANALYSIS (ASSESSMENT QUESTIONS 1 AND 2)

To develop a clear understanding of Jordan’s current level of growth and competitiveness, key trends that have already unfolded, and new patterns that are now emerging, the assessment team developed a situational analysis of the macroeconomic environment that includes official statistical data, the standard, periodic indices and reports, and other relevant research and literature prepared by national institutions, multinational organizations, and subject matter experts.

GROUP 2: UNDERSTANDING THE IMPLICATIONS (ASSESSMENT QUESTIONS 3 AND 4)

The second part of the methodology focused on clarifying how the present status and trends in Jordan’s economic growth and competitiveness are impacting performance, decision-making, and strategy among relevant stakeholder groups that include the private sector, the GoJ, and donors. Through this understanding, the assessment team developed a clearer picture of what each stakeholder group viewed as a challenge or opportunity.

GROUP 3: THE PROGRAMMATIC RESPONSE (ASSESSMENT QUESTIONS 5 AND 6)


As part of question 5, the assessment team gathered information to create an inventory of interventions and approaches being implemented by the larger donor community to support economic growth and competitiveness. Using this inventory, the assessment team assembled lessons learned from the various types of interventions and approaches. Through this process, the team identified challenges and opportunities regarding the development and implementation of interventions from the perspective of the donors and facilitated learning around these experiences.

The team used a similar approach to address question 6 as they did for question 5 but focused more intensely on EDE activities to understand their efficacy and sustainability.

DATA COLLECTION METHODS

PRIMARY DATA COLLECTION

In-depth Interviews

The assessment team collected data from a variety of stakeholders through in-depth interviews. In total, the team conducted 68 interviews, developing and utilizing specific instruments for each set of stakeholders. Interviews were conducted with GoJ officials, donor representatives, USAID implementing partner staff, private sector actors and US government officials. A complete list of interviewees and interview protocols is included in Annex G. Table 3 illustrates the breakdown by respondent type of interviews conducted by team.

Table 3: Interviews by Respondent Types

STAKEHOLDER GROUPS #INTERVIEWS

Multilateral & Bilateral Donors 17

GoJ 11

Private Sector (Associations) 14

USAID EDE Staff 8

USAID Implementers 14

Other USG 4

Total 68


Private Sector Survey

To better ascertain the perspective of private sector entities in Jordan regarding existing challenges and possible opportunities, the assessment team developed and implemented a survey of businesses operating in the country. To develop a sampling frame, the team utilized the KINZ database, which represents the most comprehensive, accurate and current data source for business intelligence in Jordan.

To conduct the survey, the assessment team enlisted MESP’s local data collection partner Mindset to conduct face-to-face as well as phone interviews with registered businesses. For this survey the assessment team opted to achieve a 95 percent level of confidence with a 5 percent margin of error (+/- 2.5 percent). Based on the 80,000 registered companies in the KINZ database and using the stated confidence level, the minimum sample size for this survey was determined at 1,505 registered businesses. In total, Mindset surveyed 1,870 companies throughout Jordan.

The survey employed a quota sampling method – a non-probability sampling approach in which three categories of sampling units: (i) location of business; (ii) industry of business; and (iii) size of business were selected. These sampling units defined the segmentation approach for sub-groupings of the overall population of registered Jordanian businesses. The quota-based sampling approach was designed to enable analysis of the population overall, as well as the subgroups.

To ensure quality, the Mindset team conducted back-checks and consistency tests and required field supervision and supervisor accompaniment for enumerators. The survey began in late October 2017 and concluded in January 2018. For a full description of survey sampling plan, see Annex E.

SECONDARY DATA SOURCES

Major secondary sources consulted for this assessment include assessments, evaluations, research papers, activity documents and news articles produced by a range of stakeholders such as the GoJ, donors, USAID, think tanks, media outlets, and subject matter experts.

DATA ANALYSIS PROCEDURES

During the analysis phase, the assessment team conducted content and trend analysis on secondary data sources and in-depth interviews to identify relevant and recurrent themes. For the survey, the team used the raw dataset of quantitative responses and coded responses of open ended questions to generate frequencies and relevant cross-tabulations to provide a more detailed picture of opinions within specific respondent segments.

Information generated from content analysis was triangulated with survey results to create a comprehensive set of findings. Triangulation of the two sets of data enabled assessment team members to identify areas of convergence and disparity in findings, providing a deeper explanation of results and prospects for inclusive economic growth in Jordan.

Data Storage and Transfer

Data storage procedures for this assessment are governed under the provisions set out in the MESP contract signed by USAID and MSI. Survey data collected for this evaluation will be cleaned for submission to the Development Data Library in a machine-readable format. Respondent-identifying information has been redacted in accordance with MSI and MESP ethical guidelines.


STUDY LIMITATIONS

Given the timeframe of the assessment, the team attempted to interview all relevant stakeholders. Nevertheless, conducting interviews with every relevant informant was unfeasible due to time constraints, political reasons, or logistics. Specifically, in relation to assessment question six, the team was unable to conduct extensive interviews with EDE beneficiaries from all activities. Additionally, informal businesses are not included in the KINZ database. As such, the team was unable to capture the perspectives of informal businesses in the private sector survey. For a complete list of challenges regarding survey implementation, please see Annex E.


ASSESSMENT FINDINGS & CONCLUSIONS

GROUP 1 FINDINGS: SITUATIONAL ANALYSIS (AQ1 AND AQ2)

AQ1: How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

What are the key growth (trend analysis in terms of revenue generation, employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan, particularly over the next 3-5 years?

AQ2: How has the macroeconomic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment, and MSME growth) changed since the 2012 Economic Growth Assessment?

To answer assessment questions one and two, the team collected data from macroeconomic literature, conducted interviews with key stakeholders, and generated data from the private sector survey. The findings for assessment question one and two are presented together in the following section. The section first covers findings on general macroeconomic trends in Jordan since 2012, then moves on to findings on the trends and status of the key economic indicators of trade and investment, demand and fiscal reform. The section closes with findings on trends in sector growth in Jordan and sector outlooks and forecasts as reported in the private sector survey.

MACROECONOMIC ENVIRONMENT

Beginning in 2012, Jordan’s economy entered a period of economic deceleration. This slowdown was exacerbated by several external shocks that include a financial crisis within the Gulf Cooperation Council countries, which began in 2008. During this period, the financial positions of gulf governments were adversely affected by a decline in oil prices and demand, resulting in tightened liquidity and reduced investor confidence in the region3.

Given Jordan’s close economic ties with the gulf region, the crisis’s effects rippled throughout a number of Jordan’s key sectors. While Jordan has been able to benefit from decreased oil prices, the resultant slowdown in gulf economies has suppressed demand for Jordanian exports, decreased tourism, and stalled remittances and financial inflows from the region.4

3 Khamis, May and Senhadji, Abdelhak, “Impact of the Global Financial Crisis on the Gulf Cooperation Council Countries and Challenges Ahead: An Update,” International Monetary Fund 2010. 4 Jordan Economic Monitor: Fall 2017. World Bank


Additionally, the eruption of the civil war in Syria resulted in the influx of 655,624 officially registered Syrian refugees into the Jordan to date.5 Estimates of unregistered refugees, many of whom are living outside of the refugee camps, put this figure even higher. The war in Syria also led to the closing of the border. The border with Iraq has similarly been closed until fall of 2017. Such tenuous border relations has had a significantly negative impact on the Jordanian economy, as both countries have provided historical trade routes and destinations for Jordanian goods.

Figure 1 illustrates GDP growth in Jordan from 2000-2016. From 2000-2009, economic growth appeared relatively strong with an average growth rate of 6.5 percent. However, as illustrated by the graph, growth experienced a significant slowdown beginning in 2010. Between 2010 and 2016, growth averaged only 2.5 percent annually. Real GDP growth for 2017 is expected to increase to 2.1 percent, an increase of 0.1 percent from 2016. According to World Bank data, services continue to be the principal driver of GDP growth in 2017.6 Over the past year, there has been robust performance in tourism, which remains a critical sector of the economy. Jordan’s industrial sector is expected to regain momentum based on a recovery in mining and quarrying as the effect of the drop-in potash prices starts dissipating.

Figure 1: Annual percent GDP Growth in Jordan 2000-2016

Benchmarking Jordan’s economic performance against regional neighbors provides a greater contextual understanding of Jordan’s economic growth. Figure 2 below illustrates the overall economic performance in terms of GDP growth relative to regional neighbors. An examination of the data shows significant variation and fluctuations in GDP growth rates between 2014-2016 in Lebanon and Morocco and a general upward trend in Egypt during the same time period. On the other hand, Jordan has experienced steady and consistent decline during the same period.

5 UNHCR Data Portal - Jordan 6 Jordan Economic Monitor: Fall 2017. World Bank


Figure 2: Regional Benchmarks: Annual Percentage Growth Rate in GDP for 2014-2016

Source: World Bank

A review of key economic indicators shows trends that mirror the decline in GDP growth. One example is the unemployment rate. Since 2012, the labor market has faced a rate of unemployment that has increased from 12.2 percent to 18.1 percent in the first half of 2017. 7 The poverty rate has also increased from 14.4 percent in 2010 to an estimated 20 percent in 2016.8 This is largely connected to the refugee influx in Jordan.

Table 4: National Unemployment rate (%)

Source: World Bank Economic Monitor Fall 2017 A closer examination of the unemployment rate show that there remains a stark divide between male and female employment. According to the department of statistics and the World Bank, unemployment for males is around 13.7 percent and 33.5 percent for females, a differential of 19.8 percentage points. Additionally, Jordanians holding a university degree are experiencing unemployment at a 23 percent rate. For the Jordanian youth, the unemployment rate for those between the ages of 15-19 is 39.5 percent and for those aged 20-24, the rate is 35.4 percent. According to the Department of Statistics, the government continues to be the largest employer in Jordan. In 2016, 26 percent of people who were employed worked in the public sector.9

7 The 2017 figure represents the results of a new unemployment counting methodology adopted by DoS starting in the first quarter of 2017 8 Jordan Economic Growth Plan 2018-2022 9 Ibid.

UNEMPLOYMENT RATE

2012 2013 2014 2015 2016 2017 (first half)

12.2% 12.6% 11.9% 13.1% 15.3% 18.1%

https://www.focus-economics.com/country-indicator/jordan/unemployment

https://www.focus-economics.com/country-indicator/jordan/unemployment


As part of the Jordan Compact, the GoJ is supposed to issue a total of 200,000 work permits for Syrian refugees with 50,000 being issued in the first year. According to the International Rescue Committee, only about 37,000 permits have been issued to refugees in its first year. Challenges related to the application process, fear on the part of the refugees that they will lose benefits if they are formalized, and the fact that the permits are tied to single employers have been key challenges to the formalization of Syrians into the labor force.

EXPORTS AND INVESTMENT

Exports have also experienced stagnation in growth since 2012, with the exception being in 2014. This trend is in part a result of the fact that the trade routes with Syria are closed and those with Iraq have just recently reopened. Additionally, decreased oil prices have resulted in a deceleration in GCC economies, which has led to decreased exports from Jordan to those counties. Over the past decade, exports to the GCC countries (Saudi Arabia being the largest market for Jordanian goods) have amounted to almost 20 percent of Jordan’s total exports. Additionally, Jordanian exports to Qatar have also been hit with the closing of the country’s borders with its neighbors.

Table 5: Jordan Exports in USD

Along with a stagnation in exports, there has been a decrease in foreign direct investment. Figure 3 illustrates the decline in net inflows starting in 2010 and a trend of stagnation since 2014.

Figure 3: Foreign Direct Investment - Net Flows

Source: Tradingeconomics.com/CentralBankofJordan

There are some bright spots looking forward. There seems to be a slight recovery in mining and quarrying. This most likely reflects increased international demand for Jordan’s potash.

EXPORTS (USD BILLIONS)

2012 2013 2014 2015 2016

7.9 7.9 8.4 7.8 7.5


To bolster Jordan’s overall competitiveness, the government has also developed a Human Resource Development Strategy, aimed at ensuring Jordanians are able to develop appropriate skills for employment through education and to increase Jordan’s competitiveness.

Additionally, Jordan also recently ratified the WTO Trade Facilitation Agreement (TFA). The TFA contains provisions for expediting the movement, release, and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other relevant authorities on trade facilitation and customs compliance issues. In addition, it contains provisions for technical assistance and capacity building.

As part of the Jordan Compact’s incentives to business, the EU has relaxed the rules of origin starting in July 2016 and will be valid until the end of 2026. The rules of origin have been applied to exports of Jordanian origin that are manufactured in designated development zones and industrial estates in Jordan including 50 harmonized system non-agricultural chapters.

DEMAND

There has been a decline in demand from 2012 to 2016. As illustrated in Figure 4 below, this is a result of a decline in the major component parts of demand. These components include government spending, which flattened largely as a result of fiscal consolidation efforts. Investment dropped roughly three percentage points since 2012 and domestic consumption reduced by four points.

Figure 4: Trends in the Components of Demand


Source: Government of Jordan Department of Statistics

However, in 2017, there has been evidence of an improvement in the mining and quarrying sector as a result of demand for Jordan’s potash. Additionally, tourism arrivals have showed a slight rebound as indicated by visits to Petra which have increased from 410,371 in 2015 to 464,154 in 2016.

In terms of policy, in 2017, the Ministry of State for Investment Affairs announced an investment map for governorates. The investment map aims to specify investment opportunities in the economic, industrial, agricultural, tourism and services sectors that would contribute to job-creation in each governorate. It is also designed to make the governorates an attractive destination for local and foreign investments, ensure a better use and distribution of available economic resources, and promote investment opportunities in each governorate. The most important outputs of the investment map were preparing 120 feasibility studies for investment projects and opportunities in the Kingdom's governorates with a total cost of JOD300 million (USD 422 million). The Ministry estimates that these investment opportunities have the potential to create around 3,800 jobs.

FISCAL REFORMS

Between 2012-2015, Jordan successfully implemented a Stand-by Arrangement program with the International Monetary Fund (IMF). During this period, Jordan generally managed to maintain macroeconomic stability while undertaking significant policy reforms. The government did this amid a difficult external environment and the hosting of many Syrian refugees. In fact, the GoJ improved its fiscal position by reducing the budget deficit from 8.3 percent in 2012 to 3.2 percent by 2016.

Table 6: Fiscal Balance

However, despite fiscal consolidation efforts from the government, the international community recognized that a number of critical challenges remained. According to the IMF, economic growth was performing below potential, unemployment continued to be high especially among youths and women, the refugee crisis was straining the economy and public finances, and the current account deficit was high. As indicated in Table 7 below, Jordan’s debt-to-GDP ratio saw steady increases to just above 95 percent in 2016 from 80.2 percent in 2012.

Table 7: Public Debt as a Percentage of GDP

Given the government’s fiscal situation, in August 2016, Jordan agreed to a USD 723 million Extended Fund Facility with the IMF with the objective of bringing down Jordan’s debt-to-GDP ratio to 77 percent

FISCAL BALANCE (% OF GDP)

2012 2013 2014 2015 2016

-8.3 -5.5 -2.3 -3.5 -3.2

PUBLIC DEBT (%OF GDP)

2012 2013 2014 2015 2016

80.2 86.7 89.0 93.4 95.1

https://www.focus-economics.com/country-indicator/jordan/fiscal-balance


by 2021. The IMF program which was mutually endorsed by the Kingdom and Jordan’s international partners in 2016 rests on reducing public debt while maintaining essential social spending. The program will also promote structural reform measures that increase labor force participation of women and youth, reduce economic informality, enhance the business environment, ensure sustainability in the energy and water sectors, and improve public accountability and good governance.10

SECTORS

Since 2012, the public sector has been the largest contributor to national GDP. Nevertheless, the government’s sectoral share of GDP relative to the private sector is declining. Agriculture, utilities, finance and insurance, real estate and other services have seen consistent growth. Figure 5: Sectoral Share of GDP

The Jordan Economic Growth Plan (JEGP) 2018-2022 calls for stimulating targeted economic sectors. According to the JEGP, a 5 percent growth in GDP equals USD 1.8 billion in increased output. The table

10 IMF Press Release No.16/381

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Government ServicesOther Services

Real EstateFinance And Insurance

Transport plus ICTHospitality

Trade (W&R)Construction

UtilitiesManufacturing

MiningAgriculture

Sectoral Share of GDP

2012 2014 2016


below illustrates by how much each sector must grow to achieve 5 percent GDP growth throughout 2018 - 2022. (Total: USD 1.8 billion.)

Table 8: Government of Jordan's target Sectors with Value Added and Growth Targets

Sector Outlook

Drawing from the private sector survey, when businesses were asked if they thought their sector was moving in the right or wrong direction (see Figure 6). Respondents operating in the financial and insurance sector appeared to be quite optimistic with 68 percent reporting they thought their sector was headed in the right direction. Respondents in public administration/health/education sector were also optimistic, with 68 percent reporting a positive outlook. On the other end of the spectrum, respondents in the industrial mining and quarrying, information and communications and construction sectors, were either pessimistic or reported not knowing.

Surveyed businesses had varied responses to their outlook on own business profits in the next 12 months (see Figure 7). Businesses in in agriculture, manufacturing were the most optimistic about profits and those in manufacturing were among the least optimistic. Interestingly, while businesses in the public administration were more likely to report improvements in the sector over the last year, they were also among the least optimistic about their business performance in the coming year.

# TARGETED ECONOMIC SECTOR V.A. INCREASE (AGGREGATE)

GROWTH RATE (ANNUAL)

1 Agriculture 113 % 10 %

2 Manufacturing Industry 530 % 10 %

3 Electricity and Water 128 % 13 %

4 Construction 254 % 15 %

5 Hospitality 169 % 5 %

6 Transportation 334 % 12 %

7 Information and Communication Technology 222 % 12 %


Figure 6: Business Outlook by Sector

Figure 7: Projected Business Performance


Table 9: Developments and Achievements

GROUP 1 CONCLUSIONS: SITUATIONAL ANALYSIS (AQ1 AND AQ2)

Conclusion 1 - Jordan’s economy has experienced a downward trend in the period from 2012-2016 as key output indicators have steadily decreased and unemployment has increased.

Conclusion 2 - The disparity between male and female unemployment has been and will most likely continue to be a major challenge to economic growth.

Conclusion 3 - The government continues to be the largest employer; however, fiscal consolidation efforts will present challenges for the government’s ability to supply stable jobs moving forward. Opportunities for public private partnerships (PPPs) will increase.

Conclusion 4 - Despite the general economic downward trend, there is room for some optimism. Tourism has shown some resilience with leisure tourism increasing for the first time since 2010 and international demand for potash on the rise. The government has taken a proactive role in attempting to spur investment, support export promotion, and build national capacity. However, continued fiscal consolidation will pose challenges in terms of government capacity.

Conclusion 5 - Refugees from Syria have been a significant issue for the Jordanian economy. Their integration into the formalized labor force has been supported by the international community, including USAID, however the uptake in work permits has been slower than expected.

THEMATIC AREA DEVELOPMENTS / ACHIEVEMENTS

Macro/Fiscal Policy IMF Fiscal Reform Program

MoF receptive to PFM support from USAID

Capital Markets receptive to Jordanian bonds

Investment Promotion & Facilitation Completed OECD Investment Policy Review in 2013

Passed the new Investment Law in 2014

JIC receptive to professional & management support from USAID

Investment Map has been completed

Export Promotion & Facilitation Consolidation of Export and Investment Promotion under JIC

Relaxed EU Rules of Origin (EBA equivalent, July 2016)

Ratification of the WTO Trade Facilitation Agreement (2017)

Analyses of other foreign markets ongoing

Employment National Strategy for Human Resource Development (2016 to 2025)

Permit Processes for Syrian Refugees

MSME Growth Accelerate with JEDCO Program

SME support funds disbursed through EU-funded JEDCO Programs


Conclusion 6 - Market forces are not the only drivers in the economy. As indicated by the JEGP, the government has identified target sectors. Given the size and influence of the public sector in the economy, any action or targeted support to specific sectors or actors by the government (i.e. significant government investment, subsidies, deregulation, etc.), will have an oversized effect on growth.

GROUP 2 FINDINGS: UNDERSTANDING THE IMPLICATIONS (AQ 3 AND AQ4)

GROUP 2 FINDINGS: AQ3 STAKEHOLDER PRIORITIES

AQ3: What are the priorities within the Private Sector and key stakeholders (GoJ, Subject Matter Experts, Donors etc.), as they relate to competitiveness and economic growth. Why?

In order to answer assessment question three, the assessment team looked at program documents from USAID, the donor community and the government of Jordan, interviewed key stakeholders from the donor community (including USAID), the government of Jordan and the private sector, and conducted a survey of the private sector in Jordan. The data was analyzed and synthesized to determine key priorities across actors in the Jordanian economy.

Key stakeholders are generally committed to increasing Jordan’s economic growth and raising the Kingdom’s competitiveness. However, the data revealed myriad priorities, at times complementary and at times competing, related to economic growth and competitiveness amongst the GoJ, the private sector, and donors. Tensions between priorities of fiscal reform, inclusive employment and the handling of refugees, government intervention, and increasing local market demand have created a number of different uncoordinated streams of growth and competitiveness programs across Jordan.

• The priorities of the Government of Jordan are outlined by the Jordan Economic Growth Plan(JEGP) 2018 -2022 which serves as a road map for how the government will accomplish a fivepercent (5%) growth rate by 2022. The JEGP outlines five (5) overarching high-level prioritiesincluding macroeconomic stability, sector development, and social development and within thesefive areas, 19 areas of priority government interventions to improve the business enablingenvironment and spur growth.

• International Finance Institutions, led by the International Monetary Fund, are strongly focusedon fiscal reforms and on decreasing Jordan’s rising debt to GDP ratio.

• For the private sector the major priorities center on a need for an increase in sales andrevenues and to drive demand in the local and domestic Jordanian market.

• The major priority of the donor community lies in increasing employment and job creation.However, there is a split amongst donors over whether to focus on refugee employment orJordanian employment. Beyond job creation and employment, the donor community expressedprioritization in increasing exports, enhancing the water sector, and improving Jordan’s criticalinfrastructure. The assessment found that many donors including DFID and the EU werecurrently re-evaluating their economic growth portfolios and priorities are looking to USAID’sstrategy to help them shape their own portfolios.

The following sections lay out the detailed findings on the priorities in economic growth and competitiveness by each stakeholder group: Government of Jordan, donor community, and the private sector.


GOJ PRIORITIES

According to the JEGP, the GoJ is aiming for a five percent growth rate by 2022. The GoJ has announced 19 priority areas and over 200 individual interventions to achieve this goal. The following reflects the GoJ’s priority areas as outlined by the JEGP:

Public Policy and Macroeconomic Stability

• Fiscal Policy: “Flexible” and “effective” fiscal policy that reduces the size of the deficit and reduces debt by shrinking the public sector; pushing to increase domestic state revenues to cover the majority of the cost of government expenditures

• Monetary Policy: Maintain monetary stability through ensuring the convertibility of the Jordanian Dinar, working to enhance the resilience of the banking system and offset known banking risks to increase the banking sector’s appetite for risk and increased money lending.

Competitiveness and Investment

• Investment Policy: The JEGP recognizes the private sector as the key driver of investment and prioritizes the government’s role in removing barriers to investment and promoting the simulation of economic activities that will employ a large number of Jordanians. Such objectives focus on methods thatare energy efficient, promote inclusive growth, and foster the redistribution of development benefits. ICT Sector: Stimulate the ICT sector to increase the competitiveness of Jordan by digitizing the Jordanian government and the Jordanian economy.

Public Sector Development: Improve the quality and efficiency of public services to the private sector to reduce barriers to invest. Infrastructure and Economic Sectors of Focus

• Water Sector: Sustainability and cost efficiency within the water sector, as well as increase access to and supply of water services.

• Energy Sector: Achieve energy security. • Transport Sector: Improve the existing transportation infrastructure, networks and

modalities and to create a public transportation system. • Industry Sector: Expand the industrial manufacturing base, improve and expand service

sectors, create job opportunities for Jordanians, and promote private public partnerships (PPPs). • Trade Foreign Sector: Increase Jordanian exports. • International Trade and Supply Sector: Strengthen food security in Jordan.

• MSME sector: Increase job creation and increase incomes related to MSME growth. • Professional Services: Increase the supply and quality of professional services aimed at

efficiency and the promotion of exports. • Tourism Sector: Ensure the tourism sector is regionally and internationally competitive. • Construction and engineering sector: Increasing the growth of the construction sector.

The JEGP has a target of 15% growth in the sector by 2022. • Agricultural Sector: Enhancing food security is the major priority outlined in the JEGP for the

agricultural sector.


Social Development

• Education and Human Resource Development: The JEGP prioritizes educational reforms to enhance learning

• Healthcare Sector: Improve public health • Labor Sector: Implement flexible national labor policies that promote technical and vocational

education and training to ensure that Jordanians are well equipped for labor market needs.

Gender

• Gender and inclusion of women are prioritized across all sectors. • Increase women’s labor participation rate to 26 percent by 2022.

Within these reform areas the JEGP has identified 95 individual policy interventions, 85 new government projects, and 27 individual private sector investment opportunities and interventions. The priorities outlined by the JEGP are numerous and widespread. Some priorities can also be contradictory. For example, economic activities that promote inclusive growth and redistribution of benefits across governorates may not, by their very nature, promote large scale Jordanian employment. Likewise, fiscal reforms that result in an increased cost of living amongst Jordanians and thus a decreased spending power may result in lower revenues for the private sector in the short term and decrease the private sectors ability to spur investment.

In addition, there appears to be a lack of prioritization in the JEGP. One reason for this lack of prioritization identified by the assessment was the socio-political reality in which the government operates. The assessment found that stability and the resilience of the monarchy is the top priority of the GoJ. It is this priority that drives all government action, be it in the economy, social policy, or international relations. Critical to this is maintaining a delicate balance among interest groups and stakeholders within Jordan. As many key informants from the government, private sector and USAID implementing partners highlighted, actors outside any area of prioritization stand to lose influence based on the government’s priorities. Additionally, the changing dynamics in the regions and fears of domestic instability have forced the government to take a reactive approach to their policies, particularly when it comes to economic growth where short-term gains in stability (such as employment programs via government jobs) are pursued vs. more strategic policies focused on long term growth.

DONOR AND INTERNATIONAL INSTITUTION PRIORITIES

Given the comprehensiveness of the JEGP, almost all of the priorities of the donor community fall in line with at least one of the areas of focus of the Jordanian government. However, the assessment also found competing and complementary priorities amongst and within the donor community. As with the government, the donor community was found to be split in their prioritization of economic growth strategies between long term strategic growth – focused on macroeconomic reforms, direct foreign investment, exports and employment – and short-term stabilization and crisis response strategies focused on the absorption of refugees (mainly Syrian) and the employment and increased livelihoods of vulnerable Jordanian populations (such as young poor men and women).

Fiscal Reform and Debt Reduction

The major priorities of international institutions, such as the IMF, are macroeconomic stability and external viability, reducing the fiscal deficit, maintaining prudent monetary policy, and ensuring a sound financial system. The IMF reform priorities are key drivers to the macroeconomic priorities outlined in


the JEGP. While the IMF is one of the donors with the clearest strategies and prioritizations, the IMF also stresses boosting investment and productivity and enhancing inclusive growth, which can run contrary to their goals of fiscal reform.

Employment

The assessment found that bilateral donors, including the US, have a major focus on employment and job creation. While this priority had been primarily focused on Jordanian employment, in recent years many bilateral donors shifted their focus to the absorption of refugees and employment of Syrians. This is a particularly important priority for UK and other European donors and is growing in importance for USAID. The signing of the Jordan Compact and USAID’s facilitation of the Program Management Unit (PMU) within the Ministry of Planning and International Cooperation (MOPIC) is evidence of this priority.

Exports and Trade

Increasing trade and the promotion of investment is a major priority of USAID. Despite the reforms and trade mechanisms designed in the Jordan Compact, export promotion was not found to be a perceived priority among other bilateral donors. While other donors may have programs or interventions that have a focus on export promotion and facilitation, these approaches were not among the top priorities discussed in donor interviews.

Gender

In their official documents and strategies, all donors, multilaterals and International Financial Institutions (IFIs) place a strong priority on gender, promoting women in the economy, and increasing women’s participation in the formal workforce. Despite this, issues of gender or increasing women’s participation in the workforce and women’s economic empowerment were rarely mentioned as a priority during the key informant interviews in the donor community. The few respondents who did highlight gender as a priority were those whose primary function was as gender advisors.

USAID’s Role in Setting Priorities

Through the key informant interviews with bilateral donors the assessment found that many donors will or are in the process of reassessing their economic growth priorities and programs. Chief among those donors are the Canadian Government, the U.K. Government, and the French Agency for Development (AFD). In these interviews, respondents highlighted that their various governments were looking to use USAID priorities to guide the formulation of their own economic growth strategies.

PRIVATE SECTOR PRIORITIES

Through interviews and the private sector survey, the assessment found increasing revenue and sales were the key priorities among businesses in the private sector. Furthermore, findings from the private sector survey indicate that the target market for most Jordanian businesses is local and that relatively few businesses reported prioritizing expanding to non-local markets.


Figure 8: Primary Business Financing Means

Source: Private Sector Survey

As illustrated in Figure 8, the majority of businesses surveyed reported being financed through revenue generation. This finding was consistent across all sectors. For these businesses, the decision to increase employees, or expand in markets or services is dependent on having adequate revenue to cover increased operational costs.

Figure 9: Financial Health



Figure 10: Impact of Business Revenues and Profits by Sector


As illustrated in Figure 9, the majority of businesses reported poor financial health. Additionally, in Figure 10, nearly half of respondents reported they struggle to get by in their daily lives with the income generated from their businesses, indicating businesses are operating within very tight profit margins. With a reliance on self-generated revenue, this suggests that few businesses have adequate capital to invest in added inputs to help facilitate growth.

While businesses reported increased financing as a key opportunity to growth, only 25% have formally applied for a loan (a full explanation of the challenges related to access to finance can be found in the following section). The findings from the survey therefore suggest that the priorities for growth within the private sector still rely heavily on increasing sales and revenue.


Figure 11: Percentage of Businesses Exporting


While donors, particularly USAID, international institutions and the government are looking at increasing exports and investment as a way to increase demand and revenue, the assessment found that the majority of the private sector is focused on sales within local and national markets. Only 11% of surveyed businesses are currently exporting. Of those, the majority export their goods within the region.

Figure 12: Firm Aspirations by Sector


For most Jordanian businesses, goals are domestic: to provide stable incomes for their families and to become well-known suppliers in Jordan. Only 16 percent of businesses surveyed reported aspiring to expand into non-Jordanian markets.


Within the domestic focus and despite the tight operating margins, the assessment found the private sector has some interest growing their businesses. In the next 12 months, businesses are prioritizing inputs and supply-side improvements in the following areas:

• Marketing campaigns (30%) • Increase the number of workers (41%)

• Remodel or expand the size of the shop (37%)

Fourteen percent of business reported having no plans for purchasing or expanding in the future.

GROUP 2 CONCLUSIONS: AQ3 STAKEHOLDER PRIORITIES

AQ3 What are the priorities within the Private Sector and key stakeholders (GoJ, Subject Matter Experts, Donors etc.), as they relate to competitiveness and economic growth. Why

Conclusion 7 - Competing priorities amongst stakeholders make it difficult to execute an effective strategy for growth. A growth strategy must be strategic and targeted to be effective. The competing priorities amongst key stakeholders create a challenge to economic growth in Jordan.

• The priorities of GoJ are too widespread to be either strategic or targeted • There is a large conflict between the priorities of fiscal austerity and reform, and the priorities

pushed forth by the donor community and some of the stated priorities of the GoJ • The priorities of USAID and the GoJ, particularly around exports, do not appear to be in line

with the realities of the majority of businesses in the private sector in Jordan

Efforts should be made where possible to streamline priorities and work to ensure that different stakeholder priorities work in concert with each other.

Conclusion 8 - Donors are waiting for USAID to take a lead in setting economic growth priorities. The donor community is looking to USAID to provide leadership in setting economic growth priorities. Seen as a leader in economic growth programing and implementation in the region, USAID proactively steps into this leadership role. It may be able to work to help mitigate the issue of competing strategies and priorities towards economic growth.

Conclusion 9 - Fiscal reform as pushed by the IMF may, in the short term, make the situation worse for small businesses who depend on local demand for revenue. The majority of the Jordan private sector is made up of small to medium sized enterprises. According to the findings in the survey, the majority of these businesses are in poor financial health and are heavily reliant on local and domestic markets for sales and revenue. As the Jordanian economy has contracted in recent years and unemployment has risen, these MSMEs have seen decreases in revenue from local markets. As fiscal reforms are enacted that will raise the cost of living in Jordan, these markets will most likely shrink further, and in turn, will likely affect the health of MSMEs in the short-term. In order to maintain a focus on fiscal reform and still balance the issues for the MSMEs, alternative policies to cost of doing business should be explored.

Conclusion 10 – The importance of gender has not been internalized by key donors and institutions. Gender is an official stated priority of all donors and the GoJ. However, in interviews with key stakeholders from the government and the donor community, only those respondents who were working on issues of gender named gender as a priority within their institutions. The priority of gender


and economic growth must be better understood and mainstreamed by key institutions and donors in Jordan.

GROUP 2 RECCOMENDATIONS: AQ3 STAKEHOLDER PRIORITIES

AQ3: What are the priorities within the Private Sector and key stakeholders (GoJ, Subject Matter Experts, Donors etc.), as they relate to competitiveness and economic growth. Why?

1. Conduct in-depth stakeholder analyses and implement concerted efforts of stakeholderengagement, to streamline and align the growth priorities of the GoJ, the donor community andthe private sector and to create buy-in on agreed upon priorities amongst different types ofstakeholders. Where possible activities and strategies should be designed to work in concert toachieve agreed upon goals and priorities.

2. USAID should take a leadership role within the donor community in setting growth prioritiesin Jordan. If USAID more proactively steps into this leadership role, it may be able to work tohelp mitigate the issue of competing strategies and priorities towards economic growth.

3. Implement policies and programs aimed at decreasing costs incurred by businesses to mitigatethe effects of fiscal reform initiatives on MSMEs

4. The priority of gender in economic growth must be better mainstreamed by key institutionsand donors in Jordan

5. Implement policies and programs aimed at decreasing costs incurred by businesses to mitigatethe effects of fiscal reform initiatives on MSMEs.

GROUP 2 FINDINGS: AQ4 KEY CHALLENGES AND OPPORTUNITIES

AQ4: What are the key challenges and opportunities, as perceived by the private sector and key stakeholders when it comes to the following key areas:

• Business enabling environment• Investment promotion and facilitation• Export promotion and facilitation• Employment• Micro, small and medium enterprise (MSME) growth

The assessment team interviewed stakeholders from the Jordanian private sector, GoJ, the international donor community, USAID, and USAID implementing partners (IPs) to gain a better understanding of the particular challenges and opportunities in each of the growth areas covered in the assessment. In addition, the assessment included a survey of private sector businesses to gain greater insights into growth challenges and opportunities as perceived by the private sector. The interview and survey data yielded insights into each key assessment area, and highlighted major cross-cutting challenges. The findings for AQ4 are therefore divided into findings on cross-cutting challenges and opportunities, including regional crisis, women’s participation in the workforce, and coordination, followed by key assessment area findings.

CROSS CUTTING CHALLENGES AND OPPORTUNITIES

Regional Crisis


The largest perceived cross-cutting challenge to economic growth found by the assessment team was the ongoing regional turmoil created by the wars in Syria and Iraq. Every respondent interviewed from the GoJ, USAID, and the private sector highlighted the negative effect these crises have had on the economy of Jordan, as well as the severe challenges they have had on efforts to stimulate growth. The major cross-cutting challenges, as reported through the key informant interviews, can be broadly broken into two major categories: the impact of the influx of refugees, and increased fears of instability and violence within Jordan. While all sectors reported being affected by the regional situation, the tourism sector in particular was perceived to be the hardest hit.

Refugees

According to the government at the time of the assessment, Jordan was hosting over 1.3 million refugees from Syria, of which only around 650,000 were registered.11 Among government respondents, there was a strong perception that the government’s need to respond to the refugee crisis was diverting resources away from programs and policies aimed at long and medium-term economic growth. There was also a strong perception among government respondents that a shift in priorities from international donors towards the employment and integration of Syrian refugees in Jordan was hampering efforts to reduce Jordanian unemployment and foster growth and competitiveness in Jordanian industries.

International donors, including USAID, similarly perceive the refugee crisis as a major challenge to Jordan’s economic growth. Respondents from the donor community highlighted the impact of the refugees on potential internal instability in Jordan and the cost of the refugees to the Jordanian government as challenges to Jordan’s economic growth and competitiveness. International donors also indicated that a shift in their home countries priorities in Jordan, from general development of the Jordanian economy to the absorption of the refugee population, was also exacerbating these challenges.

11 UNCHR Persons of Concern figure


Figure 13: Perception of the Impact of Refugees on Businesses


The refugee crisis was also seen to be a major challenge to the private sector. The majority (60 percent) of businesses surveyed perceived the increasing presence of refugees as a challenge to their businesses. This finding was universal across sectors and governorates.

Fears of Instability

The final grouping of challenges associated with the regional crisis found by the assessment was perceived fear of instability within Jordan itself. The pressure to maintain stability within Jordan was perceived by stakeholders as a key challenge to the Jordanian government. This challenge was also seen to be one of the driving priorities of economic growth policies and programs within the government, often at the expense of enacting “best practice” policies of growth.

The fear of political instability/increase in violence was a key challenge identified by the private sector survey. The majority of businesses (79%) reported the potential for terrorism as a major challenge to their business. There were no major differences between sectors and location in the perceptions of the challenge of terrorism.


Figure 14: Threats of Terrorism and the Costs on Businesses by Sector


The assessment found that there was a perception that the challenges associated with regional and potential internal instability heavily impacted the tourism sector in particular. Respondents from within the tourism sector and USAID indicated that the Syrian crisis, the rise of ISIS and incidents of domestic terrorism within Jordan have had a very negative effect of on the tourism sector. Despite this, findings from a recent evaluation of the USAID Building Economic Sustainability through Tourism (BEST) activity indicated that there has been a slight uptick in the arrivals to major tourism sites in 2017.

WOMEN’S PARTICIPATION IN THE WORKFORCE

Women’s participation in the formal economy is one of the most well documented challenges in Jordan and was perceived to be a major cross-cutting challenge by the private sector and key stakeholders. According to the 2017 Gender Gap Index Report from the World Economic Forum, Jordan ranks 138 out of 144 countries worldwide on women’s economic participation.12 Despite a high rate of women’s education and literacy, especially in comparison to other countries in the region, Jordan had one of the lowest labor participation rate of women in the world. Women currently make up a mere 12 percent of the workforce, a figure that is matched only by Iraq. The assessment found several factors that are keeping women out of the workforce, including: strong cultural biases on the appropriateness of women working outside the home and the types of work in which women should participate physical and cost barriers, such as low economic incentives driven by high costs of child care relative to wages; as well as lack of safe and reliable transportation. Additionally, while there is evidence from past studies of women

12Global Gender Gap Report, 2016, World Economic Forum,


being active in the informal economy, mainly through home-based businesses,13 there remain barriers and weak incentive structures for women to formalize these activities.

Challenges to Women’s Workforce Participation

The assessment found that one of the largest challenges to women’s participation in the workforce were biases and perceptions of women’s unsuitability for work in the private sector. From the private sector survey, 49 percent of businesses reported they do not hire women. The hiring trends reported in the private sector survey further highlight underlying biases against hiring women, as compared to youth or other historically disenfranchised groups.

Figure 15 shows the overall reported hiring trends among surveyed businesses. Most businesses reported hiring erratically with no clear increase or decrease, a hiring pattern that is reflective of erratic or unsteady revenue trends. Figure 15 shows the report hiring trends of youth compared to women across all surveyed businesses. Youth hiring trends closely follow the overall hiring patterns, suggesting that youth employment is dictated by revenue trends and market needs rather than preference or bias for/against younger workers. The hiring patterns for women, on the other hand, show a different pattern with businesses more frequently reporting that they do not hire women. This suggests that unlike youth, women’s employment is dictated by preferences and biases more than market forces or revenue trends.

Figure 15: Business Hiring Trends


13 Ibid

47%

5%

20% 20%

9%

Erratic - no clearpattern

Large increase everyyear- More by more

than 30%

Gradual increaseevery year- More by

1-%-29%

Gradual reductionevery year- Less by

1%-29%

Large reductionevery year- less by

more than 30%

Business Employment Trends in the Last Three Years(Shown: Percent buisness surveyed, n=1830)


Figure 16: Employment Trends in the Private Sector - Youth and Women


The survey findings confirm what past studies and gender assessments, such as the 2014 World Bank Gender Assessment of Jordan, have found: preferences to not hire women and attitudes among business owners that women are not suited for work continue to be major barriers to women’s participation in the workforce and to women’s economic empowerment.

Figure 17: Main Challenges in Hiring and Retaining Women


Chief among those attitudes is the belief that women do not have the right skills or education needed for employment. This perception remains strong, despite Jordan having near parity between men and women on most global education indicators. One contributing factor to the negative perception of women’s skills and education is women in Jordan are often more educated in “soft” fields (e.g., education, humanities, and communications); and are less represented in science, engineering and vocational training (e.g., plumbing, information technology, electrician, and construction), thus excluding them from employment in major sectors of the economy. While engaging women in science,


technology, engineering, and math (STEM) and in other traditionally male fields may help alleviate this perceived skill gap, the data from the private sector survey and from the KIIs suggest there are deeper gender biases preventing business owners from seeing the potential of women in the workforce. For example, perception that women also do not have the necessary skills or education is strong across sectors, including sectors suited to soft skills such as administration. Interviews with gender advisors in the government, USAID, and USAID implementing partners highlighted that strong cultural norms shape how Jordanians view the aptitude of women in areas that fall outside of traditional roles of caretakers and homemakers. A general perception of women as only skilled in homemaking is perceived to be creating a negative bias among employers of the skills of potential women workers relative to men in the same position. Changing this stereotype of women was perceived to be a critical challenge and opportunity to increasing women’s employment.

Beyond negative perceptions around the roles and skills of women, the assessment found that physical and economic barriers continue to hamper women’s participation in the labor force. The role of transportation in women’s economic empowerment was mentioned by both private sector and USAID respondents as a key challenge, with one activity gender advisor naming it as one of the top two factors that, if addressed correctly, could greatly facilitate an increase in women’s employment and economic participation. Jordan has limited public transportation, and what little public transportation exists is centered in Amman. According to interviews from gender advisors in USAID implementing partners and the donor community, the use of nearly all forms of public and semi-public transportation is heavily dominated by men. Buses, mini-buses, and even taxis were reported to be spaces where harassment of women happened frequently and with impunity. The lack of safe and accessible transportation to major employment hubs affects all women, but is even more of a barrier for poor women, who often live further from economic centers and simply do not have a way to travel to and from work. A perceived lack of interest by the government for reforming the transportation sector was seen as a major challenge for activities and donors to enact programs to address the lack of transportation for women. In interviews with the USAID LENS Activity, respondents shared that they had received multiple grant applications for MSMEs focused on providing a women-to-women ride share program that had the potential of alleviating the transportation gap for working /middle class women. Program staff at the Local Enterprise Support Project (LENS) activity were frustrated that they could not endorse this business, nor give them funding, due to the government’s ban on ride share services.

The findings from KIIs also confirm that poor incentive structures, both real and perceived, for employers and employees were another key barrier to women’s participation in the workforce. On the supply-side, the cost of childcare was perceived to be a key factor in keeping women out of the workforce in Jordan. Women often work in lower-wage industries (e.g., administration vs. medicine) and are paid at a lower rate than men, particularly at the start of their careers. This also typically coincides with the start of their families. In addition to the monetary costs associated with childcare, the interviews and literature review pointed to a social cost for women who opt to work instead of staying at home full-time with their children. The relatively low entry-level wages for women and the social and monetary cost of outsourcing childcare was highlighted in the KIIs and in the literature as a potential reason for why women do not participate in the formal workforce.

On the demand-side, the KIIs and the private sector survey confirm findings in the literature that there is a perceived (and in some cases real) higher cost to businesses to hiring women. In past studies, such as the Jordan Enterprise Survey, the cost of maternity leave and the loss of productivity associated with female employees’ “family obligations” (for example, not working long hours, leaving early to take care of children) were perceived by businesses to increase the costs of female workers relative to men. In the last 10 years the GoJ has enacted a number of policies aimed addressing this issue. A major change was the amendment to the Social Security Law, which established a universal contribution scheme to fund


maternity benefits and take the pressure off of businesses. While, these programs were seen as positive steps by interview participants, the private sector survey data suggest that perceptions around the cost and lack of productivity around maternity leave and childcare is still challenging in women’s employment.

Figure 18: Challenges in Hiring and Retaining Women


Opportunities in Women’s Participation in Workforce

Despite the relatively grim picture of women’s economic empowerment, the assessment also identified a number of areas of opportunities in women’s workforce participation. Based on the interview data from the GoJ, USAID and USAID implementing partners the following areas were perceived to have the highest opportunity for improving the situation of women in the workforce in Jordan:

– Creating incentives for companies that hire women to offset perceptions of higher costs ofwomen workers

– Expansion of safe transportation options that target both middle income and lower incomewomen.

– Increase awareness and education around existing legislation around family leave andchildcare

– Formalization and expansion of home-based businesses– Increasing the number and level of professionalism in women’s business associations

COORDINATION

A lack of coordination between and amongst key stakeholders in the Jordanian economy was found to be another cross-cutting challenge to growth. Interviewees from USAID, implementing partners and the private sector reported that a lack of coordination between the government and the private sector has hampered efforts to promote economic growth.

“There is a clear disconnect between the GoJ and the private sector.”

– USAID Interview Respondent


The major perceived challenge with this disconnect was that policies and programs pushed forward by the government did not match the needs or capabilities of the private sector.

USAID respondents and GoJ respondents reported believing that Public Private Partnerships (PPPs) are a key opportunity to increasing coordination between the private sector and the government. Indeed, respondents from USAID and the GOJ indicated that increasing PPPs was a key priority for economic growth strategy moving forward. Perhaps unsurprisingly, given the disconnect between the government and the private sector, private sector stakeholders did not have as positive a view of PPPs. The shared perception found among private sector respondents was that the government was too cumbersome and at the time too corrupt to work with in a way that would be beneficial to businesses. Respondents reported that government motivations and priorities were often at odds with private sector demands and lacked the flexibility to adjust to changes in the market or to take advantage of unforeseen opportunities.

Interview findings also highlighted a lack of coordination between and amongst the donor community and the GoJ as a major challenge to economic growth in Jordan. Interviews from the donor community and the GoJ reported that intra-donor coordination and donor coordination with the GoJ has not caught up with the increasingly complex landscape and context. Interview respondents from JCP and the EU, for example, perceived the role of MOPIC as a key opportunity to alleviate the challenge of intra-donor and donor and government coordination. Interviews from USAID and the private sector stakeholders, however, were less optimistic about the capacity of MOPIC to be able to work efficiently to increase effective coordination.

KEY ASSESSMENT AREAS CHALLENGES AND OPPORTUNITIES

Employment

The assessment found among key stakeholders interviewed, Jordan’s rising unemployment rate was one of the most critical and complex issues facing Jordan’s economic growth and stability. In the first quarter of 2017, the unemployment rate had risen to over 18%, the highest recorded unemployment in recent years. Unemployment trends were worse among youth and women. The assessment found that beyond hampering economic growth, unemployment was perceived to be a one of the major concerns for the ongoing stability in Jordan. The concern over the importance of employment was also reflected in the prominence of increasing employment in the key priorities of the GoJ and the donor community.

USAID and international donor interview respondents highlighted the perception that employment in Jordan is driven by demand in the private sector. This was also reflected in the findings from the private sector survey. The data from the survey showed that nearly half of businesses reported having erratic patterns of hiring over the last five years, suggesting that employment is dictated by businesses having the need and means to take on extra workers. The relative instability in growth in the private sector was perceived by key stakeholders to be a driving factor of the rising unemployment rate. More simply put, as businesses have seen their revenues shrink their appetite to take on more workers has likewise decreased. The exception to this is in the public sector, which continues to be one of the largest employers in Jordan, especially for women. Interview respondents expressed concern, however, that the implementation of the IMF reforms targeting the downsizing of the public sector may cause an increase in unemployment as the private sector, in its current state, was not perceived to be able to absorb displaced public-sector workers.


Despite agreement between the donor community and private sector that employment is a demand-driven problem, the majority of governmental and donor interventions are focused on tackling issues in the supply of labor. As one respondent from USAID’s EDE team stated, “We are implementing supply-side programs for demand-side problems.” Interview respondents, particularly within USAID, highlighted this misalignment as a key challenge in tackling unemployment. The assessment found that respondents felt that without addressing issues of demand in the private sector even the best workforce development programs will come up short in their goals of increasing employment.

This is not to say that respondents did not see supply-side challenges to employment in Jordan. Even in instances where businesses have sufficient needs and means to take on new workers, the assessment found ongoing challenges. The interviews of USAID, international donors, and private sector stakeholders reflected a common perception that a lack of alignment between the demands of the private sector and the current supply of labor in Jordan was a challenge in employment in Jordan. This lack of alignment was found by the assessment to manifest itself in two major ways: inadequate skills and training for the jobs in high demand by the private sector and cultural biases towards certain types of employment.

Skills and Training

Government of Jordan respondents, USAID respondents, and implementing partners reported that in some sectors - particularly in energy, IT, and manufacturing - there is a general lack of capacity among workers. There was a perception among stakeholders interviewed that current training programs and Technical Vocational Education Training (TVET) programs are ineffective in addressing this skill gap because they are not training workers or potential workers with the skills that are needed by the private sector. Additionally, the assessment found that without commitments to hire or strong inputs from local businesses, most trainings do not end up resulting in a job for the trainees.


Figure 19: Availability of Required Skills to Fill Vacancies, by Sector


The results from the private sector survey mirrored the findings from the KIIs. Among surveyed businesses, 35 percent reported having difficulty finding workers with the right skills or experience. The response varied among sectors with the construction and manufacturing sector reporting the most difficulty in finding skilled workers.


Figure 20: Availability of High Quality Professional Training Services by Sector


Despite the considerable number of training programs implemented by the GoJ and the donor community, 83 percent of businesses reported that high quality trainings were not available from the government and 87 percent reported that high quality trainings were not available from the international donor community. This suggests either a lack of awareness of the trainings implemented by the government and the donor community or that the trainings provided are not targeted to or valued by the private sector.

Cultural Biases

USG stakeholders and GoJ stakeholders reported that cultural biases against working in “low class” jobs are another contributing factor to the misalignment between the supply of labor and the demands of the private sector. Through the interviews, key stakeholders reported that many Jordanian families pressure their children to take jobs with high social status and capital, such as managerial positions in office work, and that they actively discourage work in construction, manual labor, and the service industry. Large family networks provide monetary support to unemployed youth, rather than having members work in menial jobs, thus further decreasing the incentives for unemployed Jordanians to look for employment outside of white collar industries.

Business Enabling Environment

“Jordan is a great place to live but a terrible place to do business”

– USG key informant interview

Outside of employment, factors relating to the businesses enabling environment in Jordan were perceived by the private sector and key stakeholders as key barriers to growth and competitiveness in Jordan. The assessment found five key areas in the business enabling environment that were perceived


to pose the biggest challenges to Jordan’s economy.

Lack of Stable Policy Environment

Data from the interviews and survey indicate that a lack of a stable legislative and business environment is a key challenge. Forty-four percent of businesses surveyed reported that they didn’t believe that the government provides a stable policy environment. USAID implementing partners and the private sector stakeholders reported that this lack of a stable and predictable policy environment was a key challenge in private sector growth generally, and in increasing investment and trade specifically. Regulatory and tariff uncertainty and bureaucratic disorganization were perceived to dissuade private investors from entering the market and to dissuade foreign importers from opening up their markets to Jordanian goods.

Over Regulation and High Taxes

Interviewed respondents from the private sector and the donor community highlighted over-regulation as one of the key challenges in the business enabling environment in Jordan. Cumbersome and inefficient regulations, coupled with the instability in regulatory policy, were perceived to be major deterrents for Jordanians to open new businesses, to expand into new markets, and to formalize existing informal businesses.

High taxes on the private sector were also seen as a key regulatory challenge. High taxes were perceived by interview respondents to decrease the investment appetite in Jordan, and to decrease incentives to formalize business registration or start new businesses.

Figure 21: Reduction of Incentives to Invest due to Taxes, by Sector


Data from the private sector survey align with the findings from the interviews with 79 percent of businesses reporting that taxes somewhat to severely decreased incentives to invest. The challenge of


the high tax rates was found to be further compounded by the fact that the GoJ was perceived to be under pressure to increase taxes to make up for budget shortfalls as part of their overall macroeconomic reform priorities.

High Fixed Costs of Business

In addition to high taxes, the fixed costs incurred by businesses in Jordan are very high. These costs are seen by stakeholders to make Jordanian businesses less competitive in the global market (see manufacturing annex) and to hurt the ability for businesses to grow and expand domestically. Specifically, respondents reported that high property registration fees (currently 9 percent of property value) and high energy costs are bogging down the private sector and stymieing growth and competitiveness. Respondents from the Energy Sector reported that the costs of petrol-based generation are far higher in Jordan compared to regional benchmarks and that in order to maintain subsidies at the retail level, utilities are charging much higher rates to commercial users. This was seen to have significant impact on the competitiveness of Jordan’s industrial/manufacturing output.

Access to Finance

Increasing the access to finance was perceived to be a challenge, priority and opportunity to fostering economic growth and competitiveness in Jordan.

Figure 22: Importance of Access to Finance to Business Performance and Growth


Over half of businesses surveyed in the private sector survey reported that access to finance is very important to growth; however, only 22 percent reported applying for a loan in the last 12 months. Among those who did not apply for loan, lack of need (48 percent), religious restrictions (17 percent), and fear of being unable to pay (14 percent) were the top three reasons cited. Among those businesses that did apply for a loan, 80 percent were approved. The highest reason for the rejection of a loan application reported by surveyed businesses was a lack of collateral or a lack of a guarantor (49 percent).


The data from the survey indicates that while there is a clear understanding of the importance of access to finance amongst the private sector, this has not translated into any real demand for formal credit. The key informant interviews suggested that this lack of demand is driven in part by lack of targeted products offered by the financial sector. This perception was also found in the private sector, with only 20 percent of surveyed businesses reporting that the financial sector offered a sufficient range financial products and services.

Interview respondents from the private sector, government, and USAID reported that a general lack of interest on the part of the financial sector in providing loans to the private sector was a key driver in the limited supply of products and services. Interviews from USAID JLGF and BEST activities highlighted a very low appetite for risk within the financial sector as a large challenge to increasing the number of products and services offered to MSMEs in Jordan. Services and products that target the MSME market typically must have lower criteria for approval, including lower collateral requirements and lower criteria on credit history and income, thus increasing their risks to banks. Furthermore, data from financial inclusion studies (FINDEX, FII, UNCDF) show that in many countries with low access to finance, there is a perception within the financial sector that MSMEs will more frequently default on their loans, despite data showing higher repayment rates among MSMEs. Interview respondents from the BEST and SCHEP Activities noted that this perception of MSME defaults was a major challenge in improving access to finance in tourism-related MSMEs.

The assessment found that, in addition to the issue of risk, there was a perception in the financial sector that offering financial services and products to MSMEs was not economically viable. The amount of credit sought by MSMEs is typically much smaller than that of large businesses or government. Twelve percent of businesses surveyed who did not get approved for a loan reported that the reason for their rejection was that the amount they request was too small for the banks current offerings. Given the volume of high value loans from government and large companies, the assessment found that banks did not see the any value in opening themselves up to the perceived risks of extending small amounts of credit to MSMEs.

GOVERNMENTAL EFFECTIVENESS

The last challenge in the business enabling environment highlighted by the private sector and key stakeholders was governmental effectiveness. The assessment found three key challenges to government effectiveness: bureaucracy, capacity, and favoritism.

Bureaucracy

Interview respondents from USAID and the private sector described the bureaucracy in the GoJ as intensely complicated and convoluted. The deep-seated bureaucracy in the government was seen as one of the largest setbacks to Jordanian competitiveness by private sector stakeholders. Private sector interview respondents also reported that the high level of bureaucracy in the government is a key deterrent to the private sector engaging in PPPs.

Capacity

A general lack of capacity within the GoJ was one of the challenges mentioned by key stakeholders in the private sector and donor community. The capacity gap, as perceived by the donor community, manifested itself in two major ways:

1. Impeding the ability to implement projects


2. Raising doubts about the sustainability of activities post USAID or foreign donor funding

"The ministries say the right thing but don’t have the capacity to take over our initiatives when we finish.”

USAID EDE Interview Respondent

The challenge of capacity was also mentioned in terms of workforce capacity and institutional capacity (i.e. outdated systems and technology, limited budgets). Respondents from USAID reported that despite the best intentions and efforts of the government, staff in the majority of government ministries lack the capacity to effectively carry out initiatives. Respondents reported that this issue was compounded by the fact that most ministries are underfunded and under resourced. For example, USAID implementing partners reported the Ministry of Finance was using Excel to complete and track its budget because it lacked the funds to secure budget planning software and staff resources to operate such software. Favoritism

Figure 23: Extent of Perceived Government Favoritism


The assessment found that there was a strong perception among surveyed businesses that the government showed favoritism when awarding contracts and deciding policies. This perception on favoritism in government was seen as a key barrier to growth by the private sector. While favoritism was seen as an issue in both the interviews and the survey, the assessment found bribery and outright corruption was not perceived as a major challenge to the private sector.


Opportunities – E Government

Interview respondents suggested process reform and the implementation of E-Government solutions as one of the largest opportunities to decrease the challenges in the business enabling environment. The assessment found that key stakeholders believed that the automation of processes would go far in addressing issues of bureaucracy, favoritism and lack of capacity within the government. A key example of the success of process reform found in the assessment was the automation of the Federal Drug Administration (FDA) drug registration process. The introduction of an online registration system reduced the time to market for new drugs by one year.

Trade

As mentioned in earlier sections, the closing of the Iraqi and Syrian borders was perceived by key stakeholders as a major challenge to trade growth and promotion. Historically Iraq and Syria had been two of Jordan’s most important trading partners and the closing of the borders hampered the growth of Jordanian trade and exports by cutting off important trade routes and disrupting trade linkages. Among the Jordanian private sector stakeholders and Jordanian government officials interviewed there was a perception that this challenge was temporary and would be alleviated once the borders reopened. However, the donor community was far less optimistic.

The assessment found USAID stakeholders and USAID implementing partners perceived the challenges to trade and exports due to the wars in Iraq and Syria were more complicated than just the closure of the borders. Respondents from these communities reported concerns that the level of destruction and population displacement in Syria in particular had forever changed, and in some cases destroyed, previous trade linkages that were vital to Jordanian exports. Respondents from USAID and USAID implementing partners highlighted the pressing need for Jordanian businesses to find alternative trade routes and linkages in order to grow exports and trade.

MSME Growth

As demonstrated in the below charts, findings from the private sector survey suggest that there is a distinct lack of connectedness, formality and service provision in the private sector. The weakness in the private sector ecosystem is one of the key challenges to MSME growth in Jordan.

Figure 24: Business Connectedness, by Sector



Overall, only 39 percent of survey respondents stated they always sign formal agreements or contracts with clients or suppliers. Thirty-two percent of businesses surveyed report they never sign contracts or formal agreements.

Figure 25: Formal Agreements


Figure 26: Availability of Business Services


The availability of business services was also reported by respondents as low, with almost half reporting low or no availability of services in the areas of research, business support, accounting, and marketing.


These gaps in the private sector environment also present key opportunities for donors and the GoJ. Efforts and programs designed at addressing these gaps may be very helpful to increasing MSME growth in Jordan.

GROUP 2 CONCLUSIONS: AQ4 KEY CHALLENGES AND OPPORTUNITIES

Conclusion 11- Regional tensions and concerns of instability will continue to be a major factor in economic growth. The effects of the conflicts in Iraq and Syria will continue to affect Jordan in the near and mid-term. The effects of the refugee crisis and concerns about stability both within the region and within Jordan itself are expected to continue even after the end of the major conflicts within Syria and Iraq. This complex environment must continue to be considered when determining economic growth strategies and implementing economic growth programs and activities.

Conclusion 12 - Lack of female participation in the workforce is a major factor in economic growth stagnation. The lack of women’s participation in the economy is a major factor in the stagnation of growth in Jordan. With over 80 percent of women in Jordan excluded from the workforce the country is losing out on a major productive resource. Currently women’s economic empowerment is still mainly seen as a social problem rather than an economic opportunity.

Conclusion 13 - Employment is a demand driven challenge, and without an increase in demand, unemployment is not expected to change in a meaningful way. Increases in sales and revenue among firms in the private sector were viewed as the best way to increase employment in the private sector in Jordan. Firms are not expected to increase hiring in a sustainable way without a corresponding increase in revenue.

Conclusion 14 - Capacity building remains a challenge but has yet to be overcome by current workforce development programs. The main reason for the lack of success of donor and government implemented capacity training programs was a mismatch between the training programs offered and the skills needed by the private sector.

Conclusion 15 - There is a lack of mutual understanding between the GoJ and the private sector. There is a strong disconnect between the GoJ and the private sector. There is a distinct lack of coordination and collaboration between the private sector which drives ill-targeted governmental interventions and feelings of mistrust towards the government from the private sector. Additionally, the changing and often opaque regulatory environment set forth by the GoJ has deterred the private sector from increasing investments in Jordan. Private sector actors note that the regulatory environment at local and national levels is oftentimes unclear. This ultimately provides a disincentive for potential investors.

Conclusion 16 - Taxes will continue to be high, other cost saving areas for businesses should be pursued. Given the need for the government to make up for shortfalls in their operating budget, it is expected that taxes will remain high if not increased in the short-term.

Conclusion 17 - Access to credit and financial services continues to be a challenge for the private sector in Jordan. Low appetites for risk among financial service providers and a lack of incentives for financial institutions to offer products targeted to MSMEs are key barriers to access to finance in Jordan.

Conclusion 18 - Streamlining processes is critical to addressing issues of corruption, capacity and bureaucratic barriers to economic growth. Process reform, namely automation and digitalization of


existing processes, offer a quick and sustainable way of increasing the effectiveness of the business enabling environment in Jordan.

Conclusion 19 - The effects of the crisis in Syria and Iraq on export and trade will be long lasting, alternative trade partners should be prioritized. Private sector and governmental actors believe that once the conflicts are mitigated and the borders are reopened in Iraq and Syria, trade will resume and exports will rise to levels near those previous to 2011. However, the complete destruction of many areas of Syria and the massive displacement of people and businesses in Syria and Iraq may have permanently destroyed many of the pre-existing trade linkages between the three countries.

Conclusion 20 - There is a distinct lack of connectedness, formality and service provision in the private sector in Jordan. Many businesses do not collaborate with other businesses. Additionally, a significant amount of businesses do have formal contracts with their suppliers or clients.

GROUP 2 RECOMMENDATIONS: AQ4 KEY CHALLENGES AND OPPORTUNITIES

1. Gender needs to be prioritized as a means of economic growth and productivity not as purely a social issue. Though many of the challenges surrounding gender and women’s economic empowerment are rooted in social constructs and cultural norms, economic growth programs should be more focused on increasing women’s participation in the workforce and correcting incentive structures for both women workers and employers.

2. Strategies to address unemployment should aim to expand markets and increase sales and revenues for firms in the private sector.

3. Capacity building programs must be reflective of private sector-identified demands in order to be effective.

4. Increase emphasis on public private partnerships to work to bridge the disconnect between the private and public sector.

5. PPP programming should contain interventions aimed at overcoming negative perceptions of government effectiveness in the private sector

6. Programs aimed at decreasing non-tax related costs for businesses will help free up resources for the private sector to enable them to grow, add employees, and invest in new products, market research, and better materials

7. Addressing the risk appetite for banks will be key in increasing financial inclusion. The donor community should consider supporting the Government of Jordan in regard to the priorities identified in the JEGP. For example, donor support to the move to e-Government, which is an identified priority, should be considered.

8. There must be increased focus on building and expanding trade linkages for Jordan outside of the MENA region.

GROUP 3 FINDINGS: PROGRAMMATIC RESPONSE (AQ5 AND AQ6)

GROUP 3 FINDINGS: AQ5 DONOR INTERVENTIONS AND APPROACHES

AQ5: What types of interventions and approaches are being implemented (across all donors, GoJ) to support economic growth and competitiveness in Jordan?


What have been some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan?

To address this question, the evaluation team conducted interviews with representatives from bilateral and multilateral donors as well as representatives of international financial institutions and the government of Jordan. Additionally, the team reviewed any relevant donor studies, evaluations, and programs documents.

Table 9 lists the donors that were engaged during this assessment. For this assessment, the donors are grouped into separate categories that include bilateral (small and large), multilateral, and international finance institutions. Small bilateral donors represent those donors that have less than USD 50 million in total active programming. Given their limited resources, small donors are generally focused on sectors where they feel that they have strong knowledge and experience. For example, the Netherlands generally focuses its programming around agriculture, given the country’s rich history in the sector and the amount of Dutch private and public actors who can provide expertise. Larger bilateral donors have significant focus on refugee opportunities. DFID recently returned to Jordan after almost a decade, specifically in response to the Syrian refugee crises. GIZ has focused on and will continue to focus significant resources to develop the water sector. However, the agency has recently started up education and economic development programs to better address the refugee crisis. Multilaterals have included support to refugees as part of their support to government institutions. International Finance Institutions (IFIs) are focused on supporting commercially viable interventions. These generally manifest in the form of infrastructure development within the energy and water sectors.

Table 10: Donor Priorities

DONOR / INSTITUTION CATEGORY FOCUS

World Bank (IBRD) Multilateral Policies / Institutions

European Union (EU) Multilateral Policies / Institutions

World Bank (IFC) IFI PPPs / Firms

European Bank (EBRD) IFI PPPs (infrastructure) / Firms

AFD (French) IFI PPPs (infrastructure) / Institutions

Japan (JICA) Bilateral Infrastructure

UK (UKAID) Bilateral Refugee Opportunities

German (GIZ) Bilateral Refugee Opportunities

Canada (GA Canada) Bilateral Women, Youth and Refugee Groups

Korea (KOICA) Bilateral (small) Health and Education

Netherlands Bilateral (small) Agriculture

Danish (DANIDA) Bilateral (small) Institutions / Firms


CONTEXT

The donor landscape in Jordan has changed dramatically since 2012. This change is due to the war in Syria and resulting refugees that have fled into Jordan. During remarks by His Majesty King Abdullah II at the “Supporting Syria and the Region Conference” in London in February 2016, he noted that, since 2011, half of the Syria’s pre-war population, a number around 11 million, have been killed or have fled their homes. According to the GoJ’s 2015 Population and Housing Census, Jordan alone has provided refuge to some 1.266 million Syrians, 655,833 of whom are registered as refugees. Of registered refugees, around 141,000 (21 percent) live in camp settings, while the vast majority lives in host communities in both rural and urban areas.

Given the large influx of Syrian refugees, pressure on natural resources and services such as education, healthcare, municipal management has increased dramatically. As a result, government at the local, governorate, and national levels have struggled to meet the needs of the population. There has been a notable decline in the quality of services, affecting both Syrians and Jordanian host communities. Schools are overcrowded with students and healthcare facilitates are unable to service a growing number of patients. Local governments are unable to send around 20% of newly generated solid waste to landfills due to a lack of capacity, while the demand for water resources has increased by as much as 40 percent in areas heavily populated by Syrians.14 This is of particular concern in the northern governorates where the share of Syrian refugees, and its pressure on local service delivery, natural resources and the labor market, are greatest.

Jordan Response Plan (JRP)

In 2015, Jordan moved to address the impact of the Syria crisis on the country by developing and implementing an approach that integrated humanitarian and development responses and resources to address the needs of both Syrian refugees and host communities. The JRP 2015 and JRP 2016-18 represented a paradigm shift in this respect by bridging the divide between short-term refugee and longer-term developmental response within a resilience-based comprehensive framework.

Presently, Jordan and the donor community are operating under the Jordan Response Plan 2017–2019. The current iteration of the JRP is a three-year rolling plan that seeks to address the needs and vulnerabilities of Syrian refugees and Jordanian people, communities and institutions affected by the crisis. The plan, which was developed through a multiple stakeholder consultation process facilitated by MOPIC included stakeholder workshops with other relevant line ministries, NGOs, UN agencies, and bilateral donors.

As a comprehensive approach, the JRP incorporates refugee and resilience responses into one comprehensive vulnerability assessment and one single plan for each sector, thereby placing the resilience of the people in need and of the national systems at the core of the response. The total budget for the JRP 2017-19 is USD 7.642 billion, including USD 2.962 billion for budget support, USD 2.182 billion for refugee-related interventions and USD 2.499 billion for resilience strengthening,

14 Government of Jordan, “National Water Strategy 2016 – 2025”, Ministry of Water and Irrigation.


including that of communities where both Jordanians and Syrians live. Below are the budget requirements laid out by the JRP 2017-2019.

Jordan Compact

In an ongoing effort to further improve its holistic response to the impact of the Syria Crisis, Jordan took yet another pioneering initiative by signing the Jordan Compact during the 2016 ‘Supporting Syria and the Region’ conference in London. Specifically, this approach is anchored on three interlinked pillars to support Jordan’s growth agenda whilst maintaining its resilience and economic stability:

1. Turning the Syrian refugee crisis into a development opportunity that attracts new investments and opens up the EU market with simplified rules of origin, creating jobs for Jordanians and Syrian refugees whilst supporting the post-conflict Syrian economy;

2. Rebuilding Jordanian host communities by adequately financing through grants the Jordan Response Plan 2016-2018, in particular the resilience of host communities; and Mobilizing sufficient grants and concessionary financing to support the macroeconomic framework and address Jordan’s financing needs over the next three years, as part of Jordan entering into a new Extended Fund Facility program with the IMF.

As part of the incentives to business, the EU has relaxed the rules of origin, starting in July 2016 through 2026. The rules of origin have been applied to exports of Jordanian origin that are manufactured in designated development zones and industrial estates in Jordan, including 50 harmonized system non-agricultural chapters.

As part of the Compact, donors have pledged over USD 1.8 billion to Jordan in grants and loans at concessionary rates. Donors will support job creation programs such as P4P for Syrian refugees and host communities. The Multilateral Development Banks have identified the potential to increase their financing from $800 million to $1.9 billion. As part of the compact, Jordan has provided 200,000 work permits for Syrians and expanded education services for Syrians.

DONOR LANDSCAPE

Donor coordination has not caught up with complex landscape.

Jordan currently represents an ever changing and complex operating environment for donors and their implementing partners. Regional instability, including the Syrian refugee crisis, has further complicated the environment as new actors have entered the scene and begun providing support to Jordan, while existing donors have increased the size and scope of programs to accommodate refugees and host communities. As a representative from UK’s Department for International Development (DFID) noted, DFID left Jordan in 2005, but returned to support Jordan with humanitarian programs in 2013 in the wake of the Syrian refugee crisis. The representative went on to report that DFID’s portfolio has grown in size and complexity since returning and will most likely continue on the same path for the foreseeable future. A representative from GIZ echoed this theme


saying that, in 2015, GIZ added education and economic growth programs to its overall portfolio, noting that, “we are newcomers to the fields of education and economic development.”

Given the current situation, representatives from donor agencies noted that there is a strong need for coordination between donors to enhance synergies, reduce replications and overlaps in programming, and that the overall donor and implementer community is able to adequately capture and share any lessons learned. Additionally, donors point to the fact that MOPIC is a critical player that needs to be an active participant within the community to facilitate implementation, provide host government oversight and transparency, and help ensure sustainability of donor programs and results.

In terms of on-the-ground coordination between donors, donor representatives indicated that within the water and education sectors, there is strong coordination and communication, mostly resulting from targeted technical working groups and established lines of communication between donors. However, most donors agree the rest of the donor landscape is extremely fragmented. With regards to other sectors, coordination appears to be achieved on a more ad hoc basis. A representative from an IFI noted that she is able to get most of the information that she needs through direct communication with her counterparts at other donor agencies. However, a number of donors, including many of the smaller bilateral ones, noted that direct communication, while more effective for communication between large donor agencies, is not an effective option for them. They often do not have the resources, staff or political clout to manage continuous communications with other donors. This point was supported by a program manager at a large bilateral donor who reported that his office has meetings with the largest bilateral and multilateral donors, but rarely go beyond that.

“We are sharing, others are not.” - Bilateral donor representative

“We [don’t want to be] surprised when USAID activities have an impact on our programs. We could be informed beforehand. We need [this information] to be selective compared to a donor six times larger.” - Bilateral donor

representative

Nevertheless, the majority of donors noted that large donors have the resources and clout to lead the way on donor coordination. Again, most agree that USAID is fundamental to the landscape. More than any other donor, USAID can set the tone due to their size and scope of programming. A number of donors indicated that they will be reviewing their agency priorities and strategies within the next year or two and that they will be factoring in how USAID programs its funds in its decisions.

MOPIC has dedicated leadership, but may not have the capacity to manage such a large and complex donor landscape. Donor representatives generally agreed that MOPIC is the most critical player in managing the donor landscape. MOPIC has the key role of ensuring host government buy-in and oversight.

“MOPIC is the entry point for every donor.” - Bilateral donor representative

Most donors report that MOPIC leadership is committed to providing guidance and oversight to the donor community. However, the strong commitments made by its leadership, most agree that the ministry may not have sufficient capacity to handle an oversight role due to the sheer number of donors and donor funded programs operating in the country. The lack of capacity is exacerbated by IMF Extended Fund Facility (EFF) program, which limits the amount of staff and resources that MOPIC currently has and will have in the short and medium-term.


“MOPIC does seem to be totally overwhelmed. The capacity is there, but there is a need for help.” – Donor representative

Donors noted the importance of having MOPIC as a strong partner. Having such a partner would allow for donors to articulate current priorities and more efficiently set new ones that are in line with the government’s needs. It would increase accountability and transparency of the significant amounts of donor funds being spent in the country. Donors also indicated the importance that the various ministries and agencies with the GoJ fully understand donor sponsored programs such as concessional financing, especially when they are linked to disbursement-based indicators.

“Really need to work to get the GoJ as a major stakeholder in every donor sector and leading the way in terms of coordination… coordination isn’t just good for programming, it is good for transparency” – Donor

representative

APPROACHES

Having realistic expectations for results and allowing implementers sufficient room to pilot various approaches and adjust is seen as critical.

Setting realistic expectations for results and creating space for implementing partners to experiment, fail, and learn is seen as crucial to success. As an example, one donor representative pointed to a vocational training program that was funded by his agency. The representative noted that they were relatively successful in this area in part because of realistic project targets, which helped to set an environment conducive to learning and flexibility. He elaborated that having massive targets often puts a significant burden on the implementing partner that reduces flexibility and hinders learning.

“They were meant to be realistic and set expectations. In this way, IP could test out different approaches without having the burden of managing toward a massive target. There is room to test things out.” - Donor

representative

In terms of skills development and employment, most donors agree that training is necessary, but alone not sufficient to generate employment. This is especially true with female graduates who face significant cultural and social barriers that hinder their ability to complete training programs and then find employment afterwards. Additionally, job placement has proven to be very difficult with many Jordanian beneficiaries as candidates face high rejection rates from employers. In the cases where candidates are hired, there have been high attrition rates. Even so, demonstrating a clear path to employment during training programs can help keep beneficiaries, both men and women, motivated and improve completion rates. This is especially critical with low income participants, who may decide that foregoing potential income to participate in skills training programs may not be worth it.


GIZ: Promotion of training to improve efficiency in the water and energy sector in Jordan (TWEED)

Budget: EUR 2 million (2013-2016)

Goal: To contribute to the more efficient use of water and energy by providing initial and continuing vocational training for experts in the water and energy industry and through support measures for self-employed people.

Approach: Program was designed based on an identified need within the sector and a coinciding opportunity within the labor market. The project sought the promotion of training to improve efficiency in the water and energy sector in Jordan by providing initial and continuing vocational training for experts in the water and energy industry and through support measures for self-employed people. At the same time the project supported the efforts of the Jordanian Government to reform the vocational training system, and promoted modular vocational training that is closely geared to labor market requirements.

Working with the VTC, GIZ sought to train 50 participants (20 percent female) in certified vocational training programs on Water Efficiency and Energy (WEE) with the goal of employing 50 percent of participants (25) in the sector. The program also seeks to reduce water and energy consumption by 10 percent in selected households. Additionally, the program seeks to make use of virtual ex-change and advisory platform to act as a repository for training material and as a platform for job placement.

Results: According to an evaluation of the program, it was deemed to be successful with all targets expected to be fulfilled by program end. The project encouraged the mainstreaming of competency-based training (CBT) in the VCT system and making a practical contribution to reforming the vocational training system and will lead to a clear improvement in the employability of WEE graduates.

In an attempt to approach the area of skills development and employment differently, a representative from DFID noted that they are currently in the process of developing their Jordan Labour Market Programme (JLaMP). The program will have two main approaches. One will be implemented by the IRC and is intended to implement and test three separate pilot projects to train and employ Syrian refugees and low-income Jordanians. During the pilot period, the implementer will assess which of the approaches are most effective and then create a plan for scaling them up for the remainder of the program period. The project is currently still in the inception phase, and will be rolled out in 2018. For the second approach, DFID will put out an open call to implementers and ask them to develop an approach to skills training and development. Implementers will be responsible for demonstrating that their approach is based on market demand and fits local contexts. In this way, DFID has not developed a prescriptive approach and does not wish to tell implementers what to do. The representative noted that DFID recognizes that there have been many failed and ineffective approaches implemented in Jordan over the last several years and wishes to encourage those with innovative approaches grounded in analysis to put forth their ideas. Once the project is underway, DFID will be in a position to capture lessons learned and hopefully share these with the larger donor community.

“Donors aren’t willing to accept failure. IRC program is meant to test different ideas and failure is expected” - DFID Representative


Interventions with a smaller number of beneficiaries have allowed for more targeted use of resources and have shown positive results.

A number of approaches were highlighted by respondents as being flexible and allowing for innovation. By focusing resources on a smaller number of committed beneficiaries, implementers could better focus their efforts.

UNDP 3x6 is a program that is focused on vulnerable Jordanians and Syrian refugees located in host communities. The program is founded on three separate phases, with each phase containing two steps. The first phase is the inclusion phase, which undertakes outreach and encourages individuals to apply to take part in the community projects for a pay. Of those who apply, less than 25% (around 400) are selected. In phase two, half of the participants from phase one are selected to participate. In this phase, groups and individuals are invited to present their business ideas to a committee that selects the most viable ones. Participants are encouraged to invest savings from the pay they receive for community projects into their businesses. In phase three, viable businesses are provided with support for integration into local markets and with additional financing from a microfinance institution. This approach is meant to be flexible and has proven successful in a number of regional contexts.

GIZ Econowin is a women’s economic empowerment program that has four separate components. Of the four components, one focuses on encouraging the private sector to better understand the benefits of hiring women. For this component, Econowin works with companies and their HR departments in an attempt to change the culture so that the company eventually internalizes the benefits of having a gender diverse workforce. Econowin hosts workshops and helps design and implement initiatives. Companies must apply and be willing partners. Presently, they are engaging with two companies, but four will eventually enter the program. Econowin co-shares the costs and tries to get participating companies recognized on a regional level. Using a regional approach is important because the companies receive good visibility amongst their peers and audiences familiar with them. Sometimes it is not easy, as there are significant fluctuations in business and companies cannot hire just anyone or easily adjust their workforce. Gender diversity training is all about changing cultures and attitudes.

Co-funding programs is a way to leverage resources and incentivize coordination amongst donors.

Donor representatives noted that co-funding projects and activities is an effective way of leveraging resources and ensuring collaboration between donors. Interview respondents reported that co-financing is very much accepted and encouraged by the Government. A representative from one agency noted that co-financing is crucial pointing to a collaboration between DFID and USAID to fund the PMU within MoPIC as a positive example. He also noted that DFID’s provision of funds to the World Bank as part of the results based financing for the GoJ. The representative went on to note that is crucial to leveraging resources, creating buy-in from multiple stakeholders and supporting direct collaboration. However, co-funding initiatives are a learning process. Creating working relationships between organizations takes time and donors need to take care so that beneficiaries do not feel that they are being pulled in different directions. Ultimately, taking a partnership approach is a great way to enhance synergies and leverage expertise and resources.

“Co-funded projects are good at ensuring cooperation from donors. [We] always takes a partnership approach. Leveraging funds and expertise is a more effective approach.” – IFI representative


Cost-shares with beneficiaries have proven successful on a small scale.

A number of bilateral donors indicated that to ensure buy-in from beneficiaries and to enhance sustainability, requiring beneficiaries to provide a portion of the funding for the goods and services they receive has proven effective. One program manager noted that in terms of a sustainable energy program, they provide PV panels for household water heating with the goal of reducing energy use and increasing savings within the household. To ensure a sense of ownership on the part of recipients, 50 percent of the panel’s costs are paid for by the household. The donor also provides capacity building on maintenance and operation as well. Prior to enforcing a cost-share, beneficiaries would often take solar panels and sell them on the secondary market. In this way, the donor can work with dedicated beneficiaries and reduce potential losses.

This approach is being emulated by another donor in the agriculture sector. The donor representative reported that they identify farmers that could benefit from enhanced agriculture technology and connect them with the relevant suppliers from the donor host country. If a farmer decides to purchase equipment, the Embassy provides 50 percent of the costs and the farmer provides the other 50 percent. The representative noted that, in some cases, it can be difficult for the farmers to provide adequate financing. However, employing this model ensures that they deal with only the most engaged recipient. The representative noted that this type of program is also successful because they can match farmers with people who can help them fill their need in a practical way. He highlighted that this is not a top down model, but rather a bottom-up where needs are identified and filled.

Significant room to support PPPs at all levels of government.

Moving forward, donors indicated that there will be a great deal of opportunities for PPPs. There continues to be a significant amount of pressure on government entities for large capital expenditures, especially with a growing population. Additionally, with the IMF’s EFF, there will be restrictions on the ability of government agencies to increase staffing. As a result, there is significant opportunity for PPPs to help provide necessary services and operate infrastructure projects. Donors pointed to a number of successful examples already undertaken at the national level, such as the construction of the Queen Alia Airport. Additionally, PPPs have been solidly established within the energy sector. However, PPPs are far less established in other sectors outside of energy. One donor representative noted that, outside of the energy sector, there is significantly less understanding of how PPPs could be employed. Government agencies, whether they are national, regional, or local, may not have the capacity to negotiate concession agreements. Also, government agencies that do not have a chance to engage with donors or international entities are usually not as familiar with international standards for infrastructure construction or social and environmental standards.

GROUP 3 CONCLUSIONS: AQ5 DONOR INTERVENTIONS AND APPROACHES

Conclusion 21 - There is a definite need for greater coordination at the activity and the strategy level among different donors. The donor landscape is extremely complex and will most likely only increase in complexity over the next several years. There are many opportunities to enhance synergies and communication between donors. This is especially true for smaller donors, which experience difficulty in communicating with larger donors. In addition, a number of donors will be reassessing their priorities and strategies over the next year or so. Given the current situation, USAID is uniquely positioned to lead that coordination effort and should explore ways to enhance its ability to foster coordination and collaboration within the donor community and to support a consolidated approach to development in


Jordan. There are models of coordination within the water and education sector. In those sectors, smart and targeted coordination meetings have yielded solid results.

Conclusion 22 - With a growing population and a limitation on resources within the government, there will be growing opportunities for donors to support public-private partnerships. Given this situation, it will be critical that that all that public actors have the capacity to negotiate and manage PPPs to ensure efficient operation and long-term sustainability.

Conclusion 23 - MOPIC will continue to play a critical role in overseeing donor activity within Jordan. As such, donor support to MOPIC over the next several years will be crucial to manage the donor landscape. Given constraints on capacity, it may be a struggle to keep a grasp on such a complex and dynamic operating environment. Support to structures such as the PMU will help facilitate adequate donor coordination and collaboration and help ensure transparency.

Conclusion 24 - A number of donors are experimenting with demand driven innovative approaches that emphasize flexibility and realistic targets in the realm of economic growth programming. It will crucial to keep abreast of these programs and try to capture lessons learned as well as to learn how greater flexibility and learning can be incorporated into USAID programs, while still maintaining accountability.

GROUP 3 RECOMMENDATIONS: AQ5 DONOR INTERVENTIONS AND APPROACHES

1. USAID should support public-private partnerships by helping to ensure that government actors at all levels have the capacity to negotiate and manage them.

2. USAID should continue to support MOPIC by reinforcing PMU funding to ensure adequate capacity within the Ministry.

3. USAID should emphasize flexibility in activity planning, budgeting and implementation. Given the challenging operating environment in Jordan, allowing IPs to make thoughtful changes or adaptations to the design and implementation of programs such as in adjustments in overarching strategies, encouraging iterative approaches and pilot testing, or permitting rapid reallocation of resources to more successful interventions can greatly enhance the possibility of achieving results by IPs.

4. USAID should explore ways to enhance donor coordination. Given the size and scope of its programming, USAID has a unique ability to shape on the donor landscape. Given this position, USAID can help bring all donors including smaller ones together by facilitating open lines of communication and supporting targeted coordination meetings.

5. USAID should keep an eye on demand driven interventions being implemented by other donors to capture lessons learned. For example, DFID’s Jordan Labour Market Programme (JLaMP) is a taking demand driven approach that emphasizes flexibility and learning in terms of skills training and employment. USAID will be able to gather valuable data from the programs pilot testing of approaches.

GROUP 3 FINDINGS: EDE PORTFOLIO

AQ6: To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness?


The Activities under the EDE portfolio are intended to contribute to the Mission’s USAID/Jordan Development Objective 1, Broad-based, Inclusive, Economic Development Accelerated, through the implementation of a unique model with several inter-related components designed to 1) enhance private sector competitiveness; 2) increase workforce development and opportunities for vulnerable groups, especially for the poor, women, and youth; 3) improve management of energy resources; and 4) improve fiscal stability & public financial management. To help attain its goals in DO1, USAID has partnered with the GOJ and private sector, and is implementing eight projects, related to, inter alia, fiscal reforms, promote trade, enhance competitiveness in the private sector, increase energy efficiency and improve workforce readiness. Specifically, the assessment reviewed achievement under eight USAID activities:

• Jordan Loan Guarantee Facility (JLGF) • Workforce Development Program (WFD) • Energy Sector Capacity Building (ESCB)

• Fiscal Reform and Public Financial Management (FRPFM) • Building Economic Sustainability through Tourism (BEST) • Sustainable Cultural Heritage Through Engagement of Local Communities Project (SCHEP) • Jordan Competitiveness Project (JCP)

• Local Enterprise Support Project (LENS)

The assessment looked at the broader successes and lessons learned in the EDE portfolio activities and is not an individual performance evaluations of the different activities.

In conducting the portfolio review, the assessment team considered the relationships among the components under each activity, and the effectiveness of approaches to address key challenges. All activities have an objective of job creation and addressing some area of the business-enabling environment in Jordan. Five out of the eight activities reviewed were focused on increasing access to finance. All activities had some measure of gender targets, while three had specific objectives to improve access to productive resources for vulnerable or marginalized groups, including women.

Of the four key areas identified, the assessment found that, on the whole, the EDE portfolio had the most success in achieving its targets for interventions focused on the business enabling environment; had limited success in interventions focusing on increasing access to finance; and struggled to perform on job creation and inclusion. The assessment found that while activity interventions are not isolated and are crosscutting, the interaction/support amongst activities is insufficient and with a few exceptions, is not comprehensive nor strategic.


Table 11: Overview of USAID EDE Areas of Focus

JOB CREATION AND EMPLOYMENT

Job creation and employment was the most challenging and least successful areas of focus in the EDE portfolio. The assessment found that nearly all activities reviewed struggled to meet their targets tied to employment and job creation. A review of activity data from DevResults in January 2018 showed that the EDE portfolio fell just over 8,000 jobs short of its 2017 job creation target of 9,888. Interviews from activity staff and USAID revealed a high level of frustration around job targets assigned to activities and the pressure to produce what were perceived to be unrealistic jobs numbers.

AREA OF FOCUS/ APPROACH

EFFECTIVENESS KEY SUCCESSES KEY CHALLENGES/ LIMITATIONS

Job Creation Limited: effectiveness: Did not reach targets

Employment Promotion Units (WFD)

Unrealistic Targets; Supply driven activity response to demand problem (example TVETs)


Effective: Each activity had some effect on the BEE in their scope

HBB regulation (LENS); Wheeling Regulation (JCP); FDA automation (JCP); Work permit reform (JCP); tourist sector by-laws (BEST)

Cultivating buy in of external stakeholders

Access to Finance Moderately Effective: mix of successful and unsuccessful interventions; suitability is questionable for some key successes

Online collateral registry (JLGF); new products targeted towards MSMEs (LENS);

Risk aversion of banks, lack of demand

Inclusion Limited Effectiveness: in improving access to productive resources for women

HBB promotion and facilitation (LENS); Marginalized community engagement (SCHEP); PMU support (JCP)

Cultural norms, lack of gender awareness in IPs


Figure 27: Job Creation Achievements vs. Targets


The largest activity to contribute to reported job creation (cumulative) was JLGF, with 1,994 reported over 3 years. All other activities ranged from 180-275. The shortfall of employment numbers was even greater when disaggregated by gender.

The assessment found that there were two main factors hampering the EDE portfolio’s performance in job creation and employment. Firstly, the targets for job creation, job placement and employment were found to be unrealistic and ill formulated. Secondly, the approaches used to try to reach these targets were insufficient and inappropriate for the Jordanian economic context.

TARGETS

The feasibility and appropriateness of the various job targets was found to be a major impediment to the EDE portfolio’s success. The assessment found major challenges with existing job targets.

Unrealistic Targets The most pressing challenge with job targets in the EDE portfolio was that they were found to be too high to be realistically achieved. The targets for the current EDE portfolio were based on the results of previous successful EDE activities, however, they were not accurately adjusted for new ground realities in Jordan and for the specific outputs of each current intervention. Past activities were implemented during a time of economic growth in Jordan and targeted sectors and subsectors that more easily lend themselves high volume job creation. In contrast, the current EDE activities started implementation


during a time of increasing economic stagnation and decline and targeted different sectors. Additionally, interview respondents from WFD, LENS and JCP noted that they felt their targets in job creation/employment and placement were not based on objective and correctly utilized data. WFD noted that their target for job placement, 25,000 people in new or better jobs, was based on the anticipation that each placement would cost $1,600 ($40m divided by 25k). However, they found that other studies on Middle East projects had found that the average costs for placing one male, woman, or youth are in the range of $3,000. Using the $3,000 figure for the cost of job creation would have brought down the target to 12,500 job placements, which would have dictated a different set of objectives with greater chances for success. More distressingly, the assessment found that there was a lack of understanding between IPs and USAID on how targets were derived and a perception amongst IPs of a lack of transparency on the creation of targets. For example, JCP staff reported feeling that their targets had seemingly no evidence base which was perceived to be the reason for “astronomical job targets” that had no chance of being met by the activity. However, according to USAID these targets were set using evidence from previously successful interventions similar to JCP and were agreed upon with the Activity. Both USAID and IPs concede that EDE job targets, when originally set, did not anticipate the current socio-economic crisis facing Jordan and that the targets failed to be adjusted to consider this new context. JCP leadership, like the leadership of WFD and LENS strongly suggested that in order for activities to be successful targets for jobs must come from a stronger and more robust evidence base taking into account data from reliable third parties rather than relying solely on evidence from previous activities. And that there must be greater flexibility in adjusting pre-set targets to take into account contextual changes outside of the control of USAID and USAID IPs.

Targets did not change to reflect changing dynamics in Jordan, particularly the increasing challenges from the Syrian crisis.


Many of the activities reviewed in the EDE portfolio were designed prior to the intensification of the crises in Iraq and Syria. The effects of these crises had a double effect on employment as resulting economic downturn and stagnation in the private sector reduced the job supply and the influx of refugees increased job demand. This new reality made it even harder for activities to reach already overly ambitious employment goals.

Targets were ill-defined leading to competing indicators and definitions around Job creation, job placement and employment. The assessment found confusion between USAID and implementing partners on the definitions of job targets and the indicators used to measure jobs. This disconnect was found to impact the effectiveness of BEST and JCP in particular.

Jobs targets as a means to drive growth is not appropriate in the Jordanian context. According to interviews, the causal logic of much of the EDE portfolio seemed to be rooted in using jobs and job creation as a driver of growth in the private sector rather than as an indicator of growth. Findings from the literature and data from the private sector survey suggest that this is not the correct approach for addressing employment in Jordan. Job demand is most driven by private sector employment demand, which itself is determined by increases in profits (either by increases in revenue or decreases in costs). Thus, to create long term and sustainable increases in employment, activities should be designed to focus on increasing demand in the private sector. Using job targets as a major component of program design forces activities to focus efforts on finding creative ways to hit jobs numbers rather than focusing on interventions that will act as a catalyst for employment demand by the private sector. Jobs should be conceptualized by USAID and activities as a byproduct of growth and targets should be designed to reflect these dynamics.

EMPLOYMENT APPROACHES

The assessment found that in addition to the issue of unrealistic job targets the approaches taken by the activities in the EDE portfolio specifically targeted at job growth were not sufficient to drive large increases in employment. Across activities, employment-focused interventions were found to address issues in the labor force itself (supply-side focus) and not directly upon targeting the demand for jobs within the private sector. Chief among these approaches were the implementation of trainings and capacity building activities aimed at increasing hard and soft skills for the workforce. Trainings of this nature can be found as a major employment focused intervention in BEST, JCP, LENS, WFD and SCHEP. As discussed in previously, a supply-side approach to employment in Jordan was found to have limited impact.

The assessment further found that the supply-side interventions utilized by the activities were not as effective as they could be. The major challenge with the trainings and capacity building programs found by the assessment was that they were not seen to be linked in any real way to local markets or private sector demands. The assessment found that to maximize the impact and efficiency of training and capacity building interventions for employment, these interventions must have direct links with local market demands and buy in from the local private sector or other hiring actors (e.g., the government). This linkage ensures that trainings focus on addressing the skill gap between the workforce and the private sector, which in turn increases the likelihood that trainees will be open to new employment opportunities after training completion. The assessment found that successful training and capacity


building interventions include not only a direct link between the trainings offered and the needs of the market but also a mechanism that enables hiring commitments or pledges from the private sector.


The assessment found that interventions targeted at changing the business enabling environment in Jordan were among the most successful across EDE activities. The review of the EDE portfolio yielded three main areas of interventions utilized by activities to address the business enabling environment: policy reforms, process reforms, and trainings and capacity building.

Policy Reform

The assessment found that in terms of achievement against set targets EDE activities were most successful in policy reform. In 2017 all activities with policy reform indicators overshot their annual targets by at least 40 percent.


Beyond merely surpassing activity targets the assessment found that the EDE portfolio was successful in implementing several transformative policy reforms aimed at to improving economic growth and competitiveness in Jordan. Major achievements include the changes to home-based business registration and legalization, spearheaded by the LENS program; the policies relating to reform in the tourism industry designed and advocated for by JCP, which focused on increasing medical tourism in Jordan; and LENS, BEST and SCHEP, all of which focused on increasing leisure (traditional and adventure) tourism in Jordan. These reforms had the immediate effects of creating new areas for growth, particularly among small businesses. They also were responsive to changing dynamics in the economic context-- for example opening non-traditional areas (adventure and ecotourism) to help boost the tourism sector, which had seen a decrease in its traditional market of five star and traditional tourism offerings.

While there is much room for optimism about the policy reforms spearheaded by the EDE portfolio, there are also unique challenges, particularly in sustainability, that may mitigate the long-term impacts of them. A key example of is the reforms in collateral requirements designed by JLGF. These reforms were found to greatly increase the access to finance for historically financially excluded businesses, however, the long-term sustainability of this success is doubtful. Banks have indicated that they will no longer offer relaxed collateral after the JLGF ends and guarantees provided by the project for such loans are

Table 12: Reported Progress on Policy Reform Indicators (2017)

J.1.1-A # LAWS, POLICIES, STRATEGIES, PLANS, AGREEMENTS, OR REGULATIONS ADDRESSING PRIVATE SECTOR COMPETITIVENESS IN DEVELOPMENT STAGES OF ANALYSIS, DRAFTING AND CONSULTATION, LEGISLATIVE REVIEW, APPROVAL OR IMPLEMENTATION AS A RESULT OF USG ASSISTANCE

EDE ACTIVITY 2017 ACTUAL # 2017 TARGET #

Building Economic Sustainability through Tourism 9 3

Jordan Competitiveness Program 9 5

Jordan Local Enterprise Support Project 13 1

Sustainable Culture Heritage through Engagement of Local Communities Project

5


removed. Despite this challenge of sustainability, the assessment remains confident that policy reforms will continue to be a key tool to increasing Jordan’s economic growth and competitiveness.

Process Reforms

“Process Reform is the most effective and easiest way to move the needle on improving the enabling environment” – JCP staff Interview

The assessment found that to increase competitiveness and incentivize investment, it is necessary to continue to streamline procedures key to doing business in Jordan (registration, patents, licensing etc.). A prime example of the success of this type of intervention found by the assessment was the automation of the drug patent process which cut down time to market for Jordanian pharmaceuticals by one year.

Trainings and Capacity Building

The final major intervention approach aimed at improving the business-enabling environment was the provision of trainings. According to DevResults, in 2017 alone EDE activities reported providing over 1,700 hours of trainings in the business enabling environment. These types of interventions are important since a general lack of capacity was found to be a major stumbling block in the business enabling environment. As with employment training and capacity building, it must be targeted and specific to be effective. The assessment also found that there is lack of consistency in the quality of training and capacity building initiatives implemented in the EDE portfolio. In the interviews with IP stakeholders, the assessment found that trainings and capacity building programs were utilized to hit high target numbers rather than as strategic implementation tools. As with employment focused interventions, a more nuanced approach to the design and implementation of trainings and capacity building interventions is needed to increase their impact.

ACCESS TO FINANCE

The assessment found a moderate level of success in the EDE portfolio’s efforts to increase access to finance for businesses and enterprises. As with employment the EDE portfolio suffered from unrealistic targets and expectations in regard to access to finance indicators.


Figure 28: Reported Firms Access to Finance


In 2017 the EDE fell short of its targeted number of businesses accessing finance by over 2500 business. While unrealistic targets were a part of the challenge in increasing access to finance, another key factor was a lack of interest or will among financial institutions to implement reforms and offer products that would increase access to finance among MSMEs. As previously noted, JLGF found that a low appetite for risk among banks was a key stumbling block to increasing access to finance and continues to be a challenge for the sustainability of key progress made as a result of the activity. Interviews with the BEST team and with key stakeholders in the banking sector also found that formal lender’s negative perceptions of tourist-related MSMEs were a key challenge to increasing access to finance in the tourism sector.

In addition to challenges within the formal financial institutions, implementing partner and USAID interview participants pointed to a perceived lack of demand within the private sector as a key challenge to increasing private sector access to finance. The findings from the private sector survey seem to contradict the assumption that the private sector does not want credit, as 88% of businesses reported that access to finance was critical to their ability of growth. However, only 23% of businesses reported applying for a formal loan in the last 12 months. This suggests that while there is a demand for financing, there might not be a demand among business for formal financing due to a variety of factors including highly punitive default policies, high interest rates, lack of products and services, and a dislike of the attitudes towards MSMEs in the financial sector. The LENS activity has noted this disconnect between the formal financial sector and the needs of MSMEs and has started in late 2017 and early 2018 implementing programs focused on increasing financing from informal lending groups. While it is too early to judge the success and impact of this approach, this is one area that is worth investigating further as a potential alternative to existing efforts in increasing access to finance.

Inclusion

The assessment focused on the gender aspect of inclusion in its portfolio review of EDE effectiveness. Results show that EDE had very limited impact on improving access to productive resources for women. WFD, LENS and BEST had designs that specifically targeted improving women’s economic


empowerment, however, only LENS was somewhat successful in their gender specific interventions. Furthermore, the scale of the LENS success is limited and its overall impact on women’s empowerment throughout Jordan is questionable.

Both WFD and BEST struggled with fully understanding the strength and impact of cultural norms around women’s employment. This lack of understanding resulted in interventions focused on increasing women’s employment in sectors and businesses that were considered culturally unacceptable by the women and their families and communities targeted. For example, BEST failed to take into account that many Jordanians were not comfortable in having their female family members work in hotels. The optics of having a woman working in a place that required western style uniforms (skirts), had closed rooms with beds, and served alcohol to foreigners was too much for many of BEST’s intended beneficiaries. Likewise, WFD did not fully understand the resistance among women and their families to working in manufacturing plants. These disconnects in program design caused both BEST and WFD to fall far short of their gender targets.

The assessment found there was a distinct lack of high skilled and experienced gender advisors and gender programming experts employed by activity implementing partners. The assessment also found that there was a distinct lack of understanding of gender mainstreaming or gender programing amongst activities. This lack of knowledge and resources on gender was a major factor in the disconnect between program design and on-the-ground realities, which resulted in massive failures in women’s economic empowerment efforts within activities. Two activities, LENS and JLGF, recognized this problem and took concrete efforts to try to address it by bringing in gender advisors and completing activity wide gender programming. In both activities, performance on gender indicators increased after these adjustments were made.

The assessment found that the LENS activity had moderate success in increasing women’s access to productive resources. The two key accomplishments of LENS in this regard were the formalization and growth of home-based businesses and exceeding its targets for women’s access to finance. LENS was the primary reason for which EDE was able to exceed its targets for the number of women-owned business to secure financing.


Figure 29: Reported Number of Women-Owned Businesses Financed


The home-based business initiatives championed by LENS are seen among beneficiaries and stakeholders as a key success in women’s economic empowerment in Jordan. While there is a lot of hype about the success of the formalization, there remain many limitations to the impact of the program that hamper its overall effectiveness. The market sub-sectors in which home-based businesses are focused are small in scale (mainly food production), and as more businesses formalize under the LENS program, the risks that the market will flood increase, thereby driving down demand and revenue and affecting the long-term sustainability of these businesses. While current legislation and policy have protections in place for these businesses to avoid high tax and registration fees, these aspects of formalization still remain a deterrent for many women to officially register their home-based businesses.

Additionally, the margins under which the current home-based businesses are operating are highly dependent on their tax-exempt status. Should the government lift these protections in the future, many of these businesses may not be able to survive. Pushback from other actors against the registration of home-based businesses is also a challenge. Chief among those opposed are landlords who are pushing for legislation to make it illegal to operate business from rented properties and their increased abilities to evict tenants who do so. This further diminishes the potential beneficiary pool of home-based businesses by excluding renters, a group that includes a large proportion of the poorest and most vulnerable women.


GENERAL PORTFOLIO CHALLENGES AND OPPORTUNITIES

Synergy

The assessment found that synergy amongst EDE’s activities was problematic. Through key informant interviews with implementing partners and USAID staff the assessment found a number of instances of infighting amongst activities, frustrations with over lapping interventions, confusion and wasted resources due to duplication of efforts amongst activities. This lack of synergy was a major challenge highlighted by respondents in the overall effectiveness of the portfolio. Respondents also highlighted three key opportunities to increase synergy and coordination among activities:

• Targeted coordination meetings focusing on technical leads as opposed to management leads to increase coordination at the implementation level

• Proactive coordination of activities internally at the EDE level to increase coordination at the strategic level

• Design of complementary, as opposed to competing, activities to decrease tensions among IPs

Portfolio Flexibility

The need for flexibility in programing was a highlighted as a key factor to success. Activities need more flexibility to adapt to changing scenarios. In a context of slow economic growth, low investment, and high electricity rates for industry, it is difficult to achieve ambitious targets in investment, employment, and export growth.

“I don’t know if we have provided for enough flexibility to adapt to the environment in the last two years”– USAID EDE Interview Respondent

EFFECTIVENESS OF APPROACHES

A key to determining the best intervention and approach for economic growth outcomes is understanding growth priorities under target. The assessment found that across the EDE portfolio activities targeted different priorities and objectives. The findings for assessment question 6a are therefore focused on the effectiveness of different approaches given different sets of objectives and priorities. Specifically, the findings cover approaches for inclusive growth, employment and broad-based growth.

Inclusive Growth – LENS and the Market System Approach

The assessment found that the LENS’ design was unique within the EDE portfolio in terms of having an explicit focus on inclusive growth. LENS’ design clearly reflects an understanding of market systems concepts that have gaining traction in recent years among donor agencies and philanthropic organizations. Many of these concepts and applications were developed and documented by the USAID LEO (Leveraging Economic Opportunities) Program and disseminated through USAID’s MicroLinks knowledge sharing portal. The literature generally supports the idea that the most effective way to engage the informal sector in the design of development strategies is through local economic development (LED) approaches (i.e.


territorial rather than sector or cluster-based frameworks) similar to the one used by LENS.15 The literature further suggests that inclusive growth is best derived through the use of market facilitation techniques, rather than traditional reform/replacement activities. LENS design clearly outlined intention to prioritize market facilitation techniques throughout its implementation. 16

Market systems approaches must be data-driven with highly contextual data to be effective. So far, the assessment’s review of LENS found a robust and systematic use of data to determine which activities to implement, to monitor implementation progress and to use as an evidence base for pivoting interventions. One prime example of LENS’ use of data was the implementation of the MSME survey and use of the data in the design and implementation of subsequent interventions.

Limitations:

Unfortunately, this approach is not without its limitations and challenges. The scale of impacts of inclusive growth programs like LENS and the time it takes to fully realize impacts are the two key limitations of this market systems approach

Scale – The scale of these types of interventions is very small and targeted, especially in the short to medium-term. This is one of the most often reported problems with LENS’ home-based business approach – the intervention impacts too small of a population to make a measurable impact at the macro level.

Time – To enact changes at a systematic level that target growth and inclusiveness takes time, especially to affect widespread change. A key issue with enacting these types of approaches is balancing the time needed to see change with the funding and programmatic realities of donors and implementing partners.

Supply-Side Employment Approach

The assessment found that a purely supply-side approach to employment and job creation was not an effective way of increasing Jordan’s economic growth and competitiveness. While capacity and workforce development remains a challenge in Jordan, it is not the key barrier to employment. Rather, the assessment found that private sector demand spurred by increases in private sector revenue drives employment and job creation. Therefore, if employment is one of the key goals of an activity or the EDE portfolio, the focus of interventions should be on increasing revenue at the firm-level. The key exception to this is when inclusive employment, or more specifically employment of women, is the goal. Given the structural and cultural barriers to women’s employment in Jordan, activities that have a focus on enabling environments and supply-side barriers are necessary to increase the inclusion of women in the workforce.

15 Add in citation from WB 16 Add in citation from Beam Exchange report


Firm-Level Assistance vs Sector Assistance

The assessment found two key approaches implemented by USAID activities to target broad based growth and competitiveness in the Jordanian private sector: firm-level assistance and sector-level assistance. Under firm-level, interventions were determined by individual firm needs regardless of sector or location Sector-level targeted all aspects of a predetermined sector (tourism, ICT, Healthcare and Life Sciences (HLS) etc.). The majority of activities that followed these approaches worked on sector-level assistance (BEST, SCHEP, ESCB and JCP pre- 2017). Only JCP post 2017 focused on a firm-level approach.

The sector-level approach was somewhat successful in strengthening activities targeting sectors (such as ICT, HLS, and Tourism) and the activities focused on these approaches set up important foundations for future growth. However, a major challenge in the sector-level approach is the time required to see large-scale results. In a short period of time, such as a typical five-year program cycle, it is difficult to see significant productivity gains from economies of scale, complementarity, substantial increase in foreign direct investment, or extensive integration into global supply chains. Additionally, it is very difficult to measure the impact of particular interventions or activity on macro indicators of sector growth. Another challenge to the sector-level approach is its vulnerability to outside factors. The effects of efforts to strengthen the tourism sector (via BEST, JCP and SCHEP) were dampened by impacts of the Syrian crisis and a global decrease in tourism from 2011-2017. Additionally, many of the sectors which have the highest potential for revenue growth do not yield the same types of impacts on large scale employment: for example, the ICT sector, seen as a key driver of growth, versus the manufacturing sector, which is fueled by low-cost labor.

Firm-level assistance approaches can work to overcome some of the shortfalls of the sector-level approach – quicker time for results, more flexibility in responding to external factors and crisis and shocks, and more direct links to employment. However, the impacts of the firm-level assistance on broad based growth and GDP are not as strong as those on a sector-level. By its very nature the firm-level assistance approach is piecemeal and lacks an overarching strategic vision, which is key in creating large scale changes in economic growth and competitiveness.

EDE Portfolio Sustainability

Sustainability was one of the key challenges within the EDE portfolio. The assessment found few activities and interventions judged to be sustainable without funding from USAID or other donors. The major challenge around sustainability was a general lack of capacity among partner organizations (governmental and non-governmental) to carry on interventions after activities end.


GROUP 5 CONCLUSIONS: AQ 6 EDE PORTFOLIO

Conclusion 25 - USAID and EDE growth portfolio lacks a clear strategy.

Conclusion 26 - Unrealistic and unsuitable targets are hampering activities efficacy.

Conclusion 27 - Employment is demand driven, current targets do not reflect this.

Conclusion 28 - A major challenge facing EDE implementing partners was a lack of flexibility in their design.

Conclusion 29 - A lack of coordination and synergy among EDE activities impacted the effectiveness of some interventions.

Conclusion 30 - Market Systems Approaches, as seen in the LENS program design, are the best approaches to facilitate inclusive growth.

Conclusion 31 - Finding champions in key institutions and businesses is key for any approach or intervention sustainability.

GROUP 5 RECCOMENDATIONS: AQ 6 EDE PORTFOLIO

USAID and EDE need to clarify their overall objectives and goals (inclusive growth, growth etc.).

Inclusive growth approach will probably yield the most stability friendly results in the short to mid-term.

USAID must work to ensure that activity interventions and their targets reflect the CDCS and are based in evidence.

Employment targets should be set as indicators of increases in demand/revenue not as primary measures of success.

Table 13: Overview of Key Opportunities for Sustainability in the EDE Portfolio

MAIN AREA OF FOCUS/APPROACH

AREAS OF SUSTAINABILITY QUALIFICATIONS

Job creation PMU efforts, labor reform, to ease labor permits and improve working conditions

Regulatory reforms

Champions are needed and buy-in is needed, to ensure sustainability

Business enabling environment Manuals and materials will remain relevant for a while

Laws will stay on the books for a while

Regulatory reforms

Stream line and automation reforms

Champions are needed and buy-in is needed, to ensure sustainability

For automation interventions – need to ensure agencies have the ability to renew software licenses and perform maintenance on the hardware

Improve access/growth for vulnerable or marginalized groups, including women + informal sector

Homebased business If regulations remain intact and enforced


Anticipate where the pressure points will be in terms of unemployment (i.e. not necessarily in manual labor) and work to design programs that either are focused on “acceptable employment options” or address the gap in perceptions about suitability and status of certain types of jobs.

Where possible flexibility should be encouraged by USAID and incorporated into implementing partner’s program design for programs to be responsive to the complex environment in which they operate.

To help facilitate coordination and collaboration (or at least avoid conflict) among activities USAID and EDE should internally improve the synergies between activities (strategy, design, implementation).

Activity designs should take sustainability into greater account and should actively work to find key sustainability champions in partner institutions early in program implementation.


INSIGHTS AND RECOMMENDATIONS This section covers the key recommendations of the assessment as well as the key themes that emerged from the synthesis of assessment findings. The section opens with a list of recommendations from the assessment and moves on to key thematic insights. Each thematic insight is contextualized below with theory, explanations and insight, supported with key findings, and operationalized with specific recommendations about how the EDE team can employ them to craft a new go-forward strategy to stabilize Jordan’s economic environment and strengthen its competitiveness to foster more sustainable, inclusive growth.

KEY THEMATIC INSIGHTS– BACKGROUND AND RATIONALE

EMPOWERING WOMEN

A 2015 McKinsey study found that if women participated in the global economy in the same way as men (i.e. “full potential scenario”) it would add $28 trillion to global GDP by 2025, an impact roughly equivalent to doubling the combined output of the world’s two largest economies (the United States and China). Even under a scenario in which all countries of the world simply matched the rate of improvement of the fastest improving country in their region (i.e. “best in region scenario”) McKinsey projected a global increase of 12 trillion. These estimates captured the world’s attention because they were double the prevailing wisdom of the time--an increase attributed to McKinsey taking a more comprehensive view of inequality in work.17

Another McKinsey study just released this month looked at 1,000 companies across 12 countries and found that the most successful companies tended to have a large proportion of women in senior management roles. Specifically, that study found that the most gender diverse companies were twenty percent more likely than the least gender diverse to have above average financial performance.18 None of these findings would surprise anyone familiar with the groundbreaking discovery at Harvard back in 2011 where researchers found that simply adding more women to a group increased that group’s collective intelligence, regardless of individual IQ.19

The body of evidence is both consistent and overwhelming. Gender inequality is not just a pressing moral and social issue, it is a critical economic challenge with direct effects on both growth and competitiveness. While all types of inequality have economic consequences, nowhere are these consequences more profound than the inequality facing women. And virtually nowhere in the world are the economic consequences of gender inequality more acute than in Jordan where the female workforce

17 Johnathan Manyika et al, How advancing women’s equality can add $12 trillion to global growth; McKinsey Global Institute, September 2015 18 Vivian Hunt et al, Delivering through Diversity; McKinsey Global Institute, January 2018 19 Anita Woolley and Thomas W. Malone, Defend your Research: What Makes a Team Smarter? More Women. Harvard Business Review, June 2011

https://www.mckinsey.com/featured-insights/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth

https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity

https://hbr.org/2011/06/defend-your-research-what-makes-a-team-smarter-more-women


participation rate is only 13.96 percent, a level that places Jordan 178th out of 180 countries according to the International Labor Organization (ILO).20

USAID has been investing for decades in advancing the well-being and empowerment of women and girls in Jordan. And while there have been some gains, the results have been largely disappointing. Looking at the very low overall rate of return on those investments in Jordan one might reasonably conclude that the best course of action is to reallocate gender integration funds moving forward towards areas that have a better track record of generating results. That reasonable conclusion would be a mistake.

USAID needs to double down on its investments to empower women in Jordan because improving parity between men and women represents the single most transformative opportunity for Jordan to strengthen its competitiveness and accelerate its growth. In fact, the assessment team sees no imaginable scenarios for Jordan to significantly improve its long-term economic performance as a nation without

Substantially empowering more women to enter and lead its workforce.

ALIGNING OBJECTIVES AND APPROACHES

One of the key areas of interest that drove the EDE team to request this assessment was the desire to better understand how to determine the most effective and sustainable approaches in promoting growth and competitiveness in Jordan. The assessment team collected a substantial amount of primary and secondary data to develop the insight to make recommendations about which approaches work best in Jordan.

20 International Labor Organization, ILOSTAT database; Labor Force Participation Rate, 2017

KEY ASSESSMENT FINDINGS SPECIFIC RECOMMENDATIONS

USAID TRANSFORMS, the new USAID communications campaign rolled out in January 2018, features “Empowering Women and Girls” as one of the campaign’s five cross-cutting themes.

Incorporate gender considerations into every activity across the portfolio and earmark significant funds for this purpose within activity budgets.

Prioritize the use of approaches that show why it makes good business sense instead of using a rights-based approach.


Our synthesis of all the findings suggests the suitability of different interventions and approaches depends largely on targeted objectives and a range of key contextual factors.21 In the case of the EDE portfolio, it is particularly important to recognize that there are key differences between a humanitarian focus, which has a crisis orientation; a stabilization focus, which has a short-term orientation; and a typical development focus, which has a longer-term orientation. Findings from EDE team interviews clarified that none of the EDE portfolio activities are focused on humanitarian assistance. However, there are different opinions within the team about the extent to which the portfolio is aimed at stabilization versus development. This makes sense because there are compelling reasons to focus on both.

With an unemployment rate now thought to be more than 30 percent, a lack of clarity about the long-run approach to dealing with the large Syrian refugee population, and evidence of continuing – but also declining - unrest across the region, a clear argument can be made for using EDE resources to support stabilization objectives. A stabilization-oriented focus in EDE programming would also be the most consistent with the principal foreign policy objective of the United States in Jordan, which is to sustain the current regime’s hold on power.

There is also a strong case for prioritizing more traditional development assistance, including - but not limited to - the consequences of Jordan’s dramatic level of gender inequality. Our assessment findings indicate that Jordan’s competitiveness in export markets has been gradually eroding for years, its electric and water utilities are significantly strained, levels of net annual investment have fallen sharply compared to a decade ago, and challenges associated with administering the business of government continue to persist across the enabling environment. Our assessment suggests that Jordan is ill-equipped to address these longer-term challenges confronting its competitiveness on its own.

While there a clear case to focus on both stabilization and development objectives, our findings suggest that it is possible to work on them simultaneously. This does not mean they represent the same set of problems or that they can be addressed with the same solutions. The experience of the Jordan Competitiveness Program (JCP) provides insight into how stabilization and development differ and why that matters.

The JCP program was conceived in 2011, before any major influx of Syrian refugees to Jordan. It was designed in response to what were understood as the key development challenges of the time, namely harnessing Jordan’s potential to strengthen competitiveness through its knowledge economy. In its original design JCP was structured as a cluster competitiveness program targeting innovation-led growth in three promising sectors.

21 The vast body of economic development literature tends to focus on advocating the merits of using a particular approach and pointing out shortcomings of the alternatives. While there are some comparative studies of different approaches we did not find any serious attempts within the literature to offer a prescription of when to use each of the broad array of accepted approaches.


By the time the program had been awarded (April 2013) and launched over two years later (November 2015 Jordan was hosting close to a million Syrian refugees and JCP as it was originally conceived was ill-equipped to service these new requirements. Though over time JCP was reconfigured to be more responsive to the stabilization-oriented objectives of accelerating exports and jobs in more traditional industrial sectors, it was initially perceived as a disappointment from nearly every vantage point.

STABILIZING THROUGH DEMAND-DRIVEN STIMULUS

To differentiate it from development, it can be helpful to think of stabilization-oriented assistance as a stimulus package; an investment designed to accelerate overall growth and employment to a satisfactory level. The focus is on short- to medium-term effects rather than what is accomplished and sustained over the longer term. Stabilization involves a sense of urgency and a concept of recovery. Stabilization efforts can absorb relatively large investments over a relatively short time span because they involve stepping in and temporarily replacing, rather than carefully facilitating, existing market players. Stabilization related programming typifies what the economic development literature sometimes refers to as ‘impulsive approaches’.

Stabilization targets sources of instability. In Jordan, it is widely perceived that the high rate of unemployment, largely composed of Syrian refugees, is a major source of instability. Naturally there is an expectation that stabilization-oriented investments will target rapid job creation. USAID conducted extensive research across the MENA region through its economic growth best practices project (USAID AMEG) to identify the most effective way to stimulate rapid job creation. This research concluded that a Buyer Led Approach to Enterprise Competitiveness was the most effective regional approach for rapid job creation.


The performance of the EDE portfolio since the start of the Arab Spring provides strong evidence that attempting to conflate stabilization and development can undermine progress on both.

Clarify and prioritize specific development objectives for the EDE portfolio by developing an objective-level budget

Select approaches for activity design that optimize the achievement of funding-linked objectives


The Buyer-Led model works at the firm-level and it takes an agnostic position with regards to specific sectors. There is strong evidence to support this orientation; companies’ most significant growth constraints are often firm-specific, even within the same sector, and therefore require tailored solutions to take advantage of existing markets and reach new ones. USAID has developed a technical guide to Enterprise Competitiveness that clearly lays out a justification for the buyer-led model and clarifies that the approach is particularly well suited for stimulus-oriented assistance programming: “AMEG’s research is neither meant to align with, nor contradict other strategies and approaches. Instead, this technical guide responds to the enormity and urgency of the jobs crisis in MENA by focusing on approaches that USAID can use to have a direct, measurable, and sustainable impact on employment outcomes over a relatively short time horizon.”22

The key defining characteristic of the buyer led model is that it is truly demand-driven; it starts with the buyer and works backwards. Programs start supporting client firms only after verifying there is a buyer, and then provide support specific to that buyer’s requirements. Programs using the buyer led model can also be designed and launched quickly compared to more traditional development approaches that often require months of research and analysis before any action is taken.

FACILITATING INCLUSIVE MARKET SYSTEMS

The private sector development approaches we practice in the field have origins in the evolution of economic development theory. There have been many new ideas introduced and practices tested over the past 30 years. Usually new ideas and approaches represent only incremental changes, but every once in a while, a paradigm-shifting idea is introduced that ends up driving a significant transformation in applied practice.

22http://pdf.usaid.gov/pdf_docs/PA00MFD4.pdf


The Buyer Led model can have a direct and cost-effective impact on job creation in the MENA region.

The USAID AMEG Project was unable to find other approaches that demonstrated similar cost-effectiveness in creating jobs and attributing them directly to program activities.

Several members of the EDE team expressed discomfort with the idea of sharing costs with established, well-functioning firms to help achieve stimulus objectives related to job creation.

EDE should employ the “Buyer Led Approach to Enterprise Competitiveness” for all stabilization-oriented investments that target increased sales, job creation and export growth.

From a benefit/cost perspective, established, successful local firms are the most appropriate and desirable platforms for USAID to leverage stimulus-oriented funding focused on opening new markets, showcasing demonstration effects, and driving rapid job creation.

http://pdf.usaid.gov/pdf_docs/PA00MFD4.pdf


Michael Porter’s groundbreaking book from 1990 “The Competitive Advantage of Nations” is a good example. That book introduced the Porter Diamond and the idea that nations can create new factor advantages for themselves, such as a strong technology industry, skilled labor, and government support of a country's economy. That book inspired the practice of cluster-oriented competitiveness programming which is still widely in use around the world today; including serving as the basis for the original design of USAID/Jordan’s JCP program.

Another good example is Hernando De Soto’s turn of the century book titled “The Mystery of Capital”.

De Soto suggested there was a simple answer to reducing poverty around the world that involved establishment of contract and property rights and streamlining business regulation to provide more people with more access to finance. The book inspired the World Bank to launch its Doing Business platform, the United States to create the Millennium Challenge Corporation, and made “Business Enabling Environment” a ubiquitous concept across the developing world. That framework of thinking has underpinned most of the European Union’s budget support programs for over a decade, including its 2014-2017 budget support agreement with the GoJ.

The most recent example took place just over ten years ago. In 2006 a team of researchers from the Springfield Center in Bern Switzerland published a paper titled “Making Markets Work for the Poor”. That paper concluded that the one thing all traditional approaches seemed to have in common was an inability to consistently enable the poor to participate in markets and thereby derive benefits from increased economic growth. The paper inspired the development of a new movement focused explicitly on inclusive growth known as Market Systems Development. Market System approaches seek to reduce poverty by enhancing the ways that the poor interact with markets. USAID was relatively late in adopting these emerging Market Systems concepts, but through the Leveraging Economic Opportunities (LEO) program USAID has become a leading catalyst for market systems innovation and shares its knowledge widely through its micro links platform. The USAID/Jordan LENS project was the EDE portfolio’s first foray into market systems development, and the results have been very encouraging.

There is a wealth of opportunities that EDE can explore to leverage its success with LENS to employ market systems concepts more broadly, and into more specific areas of need, such as financial services, health, and education.

INTEGRATING POLITICAL ECONOMY


Inclusive growth is best achieved through the use of “market systems” approaches that seek to genuinely transform the capabilities and incentives of permanent players within a system through market facilitation techniques.

The literature generally supports the idea that the most effective way to engage the informal sector in the design of development strategies is through local economic development (LED) approaches such as the design of the LENS project.

Ensure that PMPs for activities using market systems approaches focus on collecting evidence of genuine changes in the incentives and capabilities of permanent players in the market system.

Leverage and scale the LENS program approach to address inclusive growth objectives at the local level.

Sector orientation may be more important where inclusive objectives are prioritized


While regional instability and the Syrian refugee crisis are largely responsible for the severity of the economic challenges that Jordan is confronting, these events did not cause them. Our assessment found that after several years of substantial progress, the private sector reform process in Jordan started losing momentum in the mid-2000s amidst formidable internal resistance, several years before the Arab Spring erupted.

The timing and emergence of this internal resistance is clearly explained as part of the complex political economy of private sector development in Jordan. There is a body of literature that suggests the economic reforms Jordan adopted through the 1990s and early 2000s to liberalize markets and empower the private sector had the effect of strengthening Jordan’s self-identifying Palestinians, and disenfranchising many peninsular Arabic speaking Jordanians - the bedrock of the regime’s hold on power - to the point where it started to become destabilizing.23 This dynamic implies that there are limits in terms of how far private sector reforms can go in Jordan without threatening the stability of the regime. In other words, EDE program results can become self-damping if the approaches used fail to account up front for the distributional implications of its achievements.

EFFECTS ON BUSINESS ENVIRONMENT REFORM

One area of interest to USAID where political economy factors generally hit the hardest is reforming the business enabling environment. What makes it particularly challenging in Jordan is the fact that reforms to improve the business of Government tend to involve reductions in jobs and influence among peninsular Arabic speaking Jordanians. In other words, reforming the enabling environment directly and disproportionately undermines King Abdullah’s base of support. This connection helps to explain why Jordan ranks 103rd in the World Bank’s latest Doing Business report - which looks at enabling environment specifically-- and 65th in the World Economic Forum’s Global Competitiveness Report, which looks at competitiveness more holistically.

This tells us two very important things. First, that constraints within the enabling environment are among the most significant factors holding Jordan back. And second, that addressing the constraints within the enabling environment are among the most challenging areas for development programs to successfully effect reform. Virtually everyone the assessment team spoke to across the public and private sector agreed with the statement “Everybody knows what we need to do here in Jordan, but nobody is willing to do it.”

One of the findings that we initially found most surprising was the fact that Int@j, the organization largely responsible for driving Jordan’s emergence as a regional ICT power, has been notably absent from Jordan’s flailing E-Government initiatives. When taken into a broader context, however, that finding becomes another point validating the overall conclusion that key decision makers are not yet committed to implementing the reforms that will make it easier to do business in Jordan.

23 For example: Sufyan Alissa, Rethinking Economic Reform in Jordan: Confronting Socioeconomic Realities, Carnegie Middle East Center, July 31, 2007

http://carnegie-mec.org/2007/07/31/rethinking-economic-reform-in-jordan-confronting-socioeconomic-realities-pub-19465


PROGRAMMATIC APPROACHES

There are ways to influence this process, and USAID programming can play a role, but our findings suggest there are two important considerations that need to be factored into the strategy, design and implementation of any activities targeting reform of the business environment.

The first is recognizing that success with business environment reform starts with the basic understanding that there is no such thing as “political will”, one of the most common phrases heard from stakeholders across the institutional landscape throughout the assessment. The problem with the statement “there is no political will” is the implication that it is reasonable to expect government to prioritize actions that are either contrary to the interests of its supporting constituents, or where its constituents have no strongly held opinion. There are certainly examples of this happening but they need to be seen as the rare exceptions, not the rule. It is not a coincidence that the assessment team all agreed during the initial design phase that USAID’s best example of success with large scale economic policy reform was in post-genocide Rwanda.

For Jordan, USAID needs to draw upon approaches and experiences supporting enabling environment reform in countries that are endowed with diversity. USAID’s experience suggests that successful programs in diverse settings like Jordan’s combine efforts to persuade government through compelling analysis at the policy technician levels with public awareness efforts at the grass roots level to cultivate demand for reforms among stakeholders, and then help connect that demand to the political processes. USAID’s most recent efforts driving business environment reforms in Serbia are widely seen as one of the most effective examples of this approach.

The second way to influence this process is thinking more proactively upfront about how to counter the anticipated effects of the reforms. If the ultimate potential consequence of success with programs in business environment reform and private sector empowerment is the destabilization of the regime, then strong consideration should be given to simultaneously developing other activities that may have some offsetting effect.

For example, there appears to be a strong opportunity in Jordan to modernize its residential finance system by connecting mortgage funding to longer duration securities floated in capital markets rather than the short-term deposit base of the commercial banks. Such an intervention has the potential to increase disposable incomes for all Jordanian homeowners, including its civil service workforce and military personnel. A more modern residential finance system would also provide a better foundation for initiatives designed to make homeownership available to more of the population and also provide more affordable sources of capital to address the growing housing shortage in Amman.

Another interesting possibility worth exploring is establishing a long-term commitment by the U.S. and perhaps other major donor countries to partner with Jordan in the development of a new world-class graduate school of public administration. Such an initiative could be used as a platform and incentive to work with Jordan on modernizing public service delivery by creating innovative new partnerships with the private sector. Our assessment found that there is nothing like that in the region at this time. Linking support and participation to broader opportunities across the region could be a strategic opportunity that gets Jordan’s civil service to feel more invested in public sector reform programs.


CULTIVATING CONNECTEDNESS

In virtually all developing countries around the world Micro, Small and Medium Sized Enterprises (MSMEs) represent both the backbone and growth engine of the economy. Harnessing the potential of MSMEs to sustain livelihoods across the population is of paramount importance to any economic growth strategy, which is why the most fundamental challenge involved in private sector development strategies is figuring out how to facilitate MSME competitiveness.

Traditional approaches have generally been based on a point of view that sees MSMEs first and foremost as competing entities. It assumes that given an appropriate set of policies, laws and regulations, targeted efforts to strengthen individual MSMEs will lead to enhanced competitiveness and financial performance. However, a new paradigm of thinking about MSMEs has been emerging which posits that competitive MSMEs in most developing countries are actually the ones focused on networking and collaborating. In this emerging paradigm MSME competitiveness is derived largely through “connectedness.”

The assessment’s private sector survey results show that there are very low levels of connectedness in Jordan. We found the LENS Program also recognizes this is an issue and has designed activities along territorial grounds to get small businesses and entrepreneurs working together. Other interventions in the EDE portfolio should also actively consider ways to improve connectedness among MSMEs broadly, and within designated production systems specifically.


Continued frustration across the donor community with Jordan’s capacity to decisively address challenges in the enabling environment.

There are significant political economy issues involved in EDE work that are particularly challenging in Jordan.

Big-bang policy reform programs rarely work; best successes involve incremental thinking and developing multiple tracks of influence.

Successful programs tackling enabling environment reforms enable IPs to shift investments between transaction/firm-level and institutional/regulatory level activities and allocate some funding towards activities to build broad based support for specific reforms.

To the extent possible, focus on reform measures that have direct relevance to beneficiaries supported through the EDE portfolio and reasonable evidence that GoJ can be influenced to support the reform measures.

Identify and evaluate options for utilizing EDE funds for activities and investments that can strengthen incomes and impact beneficiaries across both public and private sectors such as transformation of the residential finance system.

Should USAID decide to design and award a cross-cutting enabling environment reform activity it should emphasize the role of contractor past performance in selection criteria, and verify planned involvement of key personnel from previous program successes.


OECD’s best practices model for strengthening MSMEs promotes the idea that by financing and deploying professional network managers, learning networks of motivated businesses and training or Research and Development (R&D) institutions can be rapidly promoted and lead to increasing linkages between different businesses and local and regional supporting institutions.24

Another approach that has been effective for improving connectedness are partnership cultivation schemes, such as the highly successful Competitiveness Improvement Program (CIP) designed and implemented by South Africa’s Department of Trade and Industry (DTI) and Industrial Development Corporation (IDC). The CIP encouraged alliance formation of similar manufacturing entities or value chain clusters comprising manufacturers, suppliers, retailers, and support organizations in order to engage in collective improvement activities which are more cost effective and more linked to the drivers of competitive advantage. Rather than working with companies on an individual basis the CIP required a network of companies to come together to receive technical and financial support designed to improve the competitiveness of the network, and include as many best practice elements as possible.25

CRAFTING EFFECTIVE STRATEGY

The scope for this assessment identified several specific thematic areas where USAID had particular interest. Through the course of the assessment the team collected and analyzed primary and secondary data related to these areas, which included Growth Sectors, Business Environment, Investment and Export Promotion/Facilitation, Employment, and SME development. Previous sections of the report have presented the key findings related to each of these areas.

While important insight can be developed by focusing on each of the thematic areas individually, in order to craft effective strategy, we need to go a step further. We need to understand and account for the interrelationships between all the themes in order to set priorities for making decisions and make sure that decisions are as coherent with one another as possible.

24United Nations Economic Commission for Europe 25 http://www.ctcp.co.za/tmp/Competitiveness%20Improvement%20Programme%20Guidelines.pdf

KEY FINDINGS SPECIFIC RECOMMENDATIONS

The private sector survey results show that there are very low levels of connectedness in Jordan

The LENS Program recognizes that the lack of connectedness is an issue and is making efforts to address it.

Interventions in the EDE portfolio should be designed to improve connectedness among MSMEs broadly, and within production systems specifically. Rather than looking at firms as individual, competing entities, it can be useful to see them as important micro elements of a broader eco-system where all the entities involved are mutually inter-dependent.

http://www.unece.org/info/ece-homepage.html

http://www.ctcp.co.za/tmp/Competitiveness%20Improvement%20Programme%20Guidelines.pdf


Among all of the thematic areas that the assessment team studied, one clearly stands out as the obvious keystone for any strategy to re-accelerate economic growth in Jordan. The trajectory and composition of Jordan’s future economic growth will be largely determined by its ability to make and attract new investments. The rationale for this is simple; of the three demand-side components of GDP (Consumption, Investment and Government Spending) investment is the most plausible path of new influence. There is a strong sense that consumers across Jordan are already over-leveraged with debt. The GoJ is mid-course implementing an austerity package with the IMF to reduce its deficit. Remittances and external flows to Jordan in the form of international aid and development support are already near all-time high levels. The only viable option left to drive expansion is increases in investment.

Our assessment suggests that key stakeholders across Jordan already realize and support this perspective. For example, in our interview with MoITS staff we were informed that a new industrial policy has been developed and submitted to the government, but not adopted. The explanation for this was it was all up to the Jordan Investment Commission (JIC) to plot a way forward first, and they understood that made sense.

Clarifying the supremacy of investment up front helps answer a series of other questions. What sectors should the GoJ support? Prioritize sectors that can attract investment. What issues within the enabling environment should GoJ try to address? Prioritize issues that are constraining investment. We also know that foreign investors look at services sectors differently than industrial sectors. Strategies for each of these should be based on what we know drives Foreign Direct Investment decisions, for services decisions are based on market access/size; for industrial sectors investment decisions tend to be based more on the nature of geographical clustering and incentives.

Finally, our assessment findings suggest that USAID, the GoJ, and its broader institutional and donor network could do a better job of emphasizing coherence in decision-making. Annex 1 provides some context for this point using an example identified during the assessment where USAID is currently confronting a situation that requires balancing urgency with coherence.

KEY THEMATIC RECOMMENDATIONS

Incorporate gender considerations into every activity across the portfolio and earmark significant funds for this purpose within activity budgets.

Prioritize the use of approaches that demonstrate the value-add to business in terms of their bottom line or other priorities.

Clarify and prioritize specific development objectives for the EDE portfolio by developing an objective-level budget.

EDE should employ the “Buyer Led Approach to Enterprise Competitiveness” for all stabilization-oriented investments that target increased sales, job creation and export growth.

From a benefit/cost perspective, established and successful local firms are the most appropriate and desirable platforms for USAID to leverage stimulus-oriented funding focused on opening new markets, showcasing demonstration effects, and driving rapid job creation.

Ensure that PMPs for activities using market systems approaches focus on collecting evidence of genuine changes in the incentives and capabilities of permanent players in the market system.


Leverage and scale the LENS program approach to address inclusive growth objectives at the local level.

Sector orientation may be more important where inclusive objectives are prioritized.

To the extent possible, focus on reform measures that have direct relevance to beneficiaries supported through the EDE portfolio and reasonable evidence that GoJ can be influenced to support the reform measures.

Identify and evaluate options for utilizing EDE funds for activities and investments that can strengthen incomes and impact beneficiaries across both public and private sector such as transformation of the residential finance system.

Should USAID decide to design and award a cross-cutting enabling environment reform activity, it should emphasize the role of contractor past performance in selection criteria, and verify planned involvement of key personnel from previous program successes. Success with enabling environment reform is challenging. Those missions that have been successful have generally used a political economy based approach and understanding – so it would be a good idea to make sure that anyone who is selected for implementing an enabling environment reform activity has used a modern PE based approach with success, and that the individuals who were involved in those past successes will also be involved in a substantial way i.e. just because an organization has that experience doesn’t mean they can replicate it without the key individuals that were involved.

Interventions in the EDE portfolio should be designed to improve connectedness among MSMEs broadly, and within production systems specifically.

In order to help facilitate coordination and collaboration (or at least avoid conflict) among activities USAID and EDE should internally improve the synergies between activities (strategy, design, implementation).

Activity designs should take sustainability into greater account and should actively work to find key sustainability champions in partner institutions early in program implementation


ANNEXES

ANNEX A: BALANCING URGENCY AND COHERENCE: A CASE STUDY

Jordan’s last National Export Strategy - written in 2013 – cited as a key constraint the fact that efforts to promote and facilitate investment were not connected to promotion and facilitation of exports.26 In 2014 Jordan passed a new investment law establishing the Jordan Investment Commission (JIC), which was designed to streamline and unify all of Jordan’s government investment institutions. It was a celebrated achievement strongly advocated for by both OECD through its investment policy framework initiative in Jordan, and by USAID through JCP because it enabled Jordan to “promote investment, support export growth, and manage the utilization of special economic zones all under one roof.” In other words, it offered the potential to strengthen Jordan’s capacity to design coherent strategy and implement coherent plans.

JIC was formally set up in May 2014. The assessment found widespread agreement across the donor landscape that over its first three years JIC’s performance as an institution has not met expectations. There are clearly issues that need to be addressed with JIC. However, it was very surprising to discover at the end of the assessment that there are discussions now underway already between USAID, JCP, GoJ, and potentially other key partners to spin the Export Promotion role out of JIC and establish a new, independent export promotion entity called Enterprise Jordan. The apparent rationale for the proposal to spin it off is simply that JIC has been struggling as an organization and has not yet prioritized the integration of its export promotion mandate.

While this may be so, our findings suggest such a decision has not yet been given careful consideration in a broader context. A process of careful consideration would involve asking some probing questions upfront such as what kind of timeframe and performance would be reasonable to expect. Are there reasons to explain JIC’s lack of progress developing its export promotion capacity? And, will spinning it out actually solve the problem?

1. IS IT REASONABLE TO EXPECT A NEWLY FORMED GOVERNMENT ENTITY TO BECOME OPERATIONALLY EFFECTIVE WITHIN THREE YEARS?

It is not unprecedented. Through its 2010 Dodd Frank Act the US Government established the legal basis for a new Consumer Financial Protection Bureau (CFPB) in response to the predatory financial sector practices that helped trigger the 2007-08 global recession. That was a similar situation in two respects. First, the new agency represented a legislative response to what was seen as an important and urgent matter of public policy at the time. Second, its establishment involved extracting functional units within several different existing financial regulatory bodies and integrating them all under one roof. It took over three years from its establishment in law for the US Senate to confirm the CFPB’s first director.

26 http://inform.gov.jo/Portals/0/Report%20PDFs/4.%20Enabling%20Environment/iii.%20Exports%20&%20Trade%20Policy/2014-2019%20National%20Export%20Strategy.pdf

http://inform.gov.jo/Portals/0/Report%20PDFs/4.%20Enabling%20Environment/iii.%20Exports%20&%20Trade%20Policy/2014-2019%20National%20Export%20Strategy.pdf

http://inform.gov.jo/Portals/0/Report%20PDFs/4.%20Enabling%20Environment/iii.%20Exports%20&%20Trade%20Policy/2014-2019%20National%20Export%20Strategy.pdf


2. ARE THERE REASONS TO EXPLAIN JIC’S LACK OF PROGRESS WITH EXPORT PROMOTION?

The assessment findings suggest there are a range of possible explanations. One possibility is the broader set of political economy issues related to private sector development discussed previously, i.e. there could be a perception among leadership that the distributional effects of new and/or accelerated export growth would be destabilizing and therefore make leadership less inclined to focus on those kinds of efforts.

Another explanation is the lack of consensus that we found across the institutional and donor landscape regarding which sectors, products, and markets offer the most potential for Jordan’s exports, and which of these should be seen as priority. When there are diverging points of view among advisory institutions, and no clear explanation for the differences in these points of view, it is not uncommon to find the recipients of the advice skeptical, concerned about potential ulterior motives, or even generally reluctant to act.

Most of the European donors have been emphasizing the need to promote export opportunities associated with the EU’s relaxed rules of origin agreement. The agreement allows manufacturers in Jordan to import up to 70 percent of the raw materials used in production and maintain the preferential access outlined in the trade agreement. However, two years have already passed since the agreement entered into force and the results have been very modest.

The GoJ and EU are negotiating amendments to the Rule of Origin (ROO) agreement to expand its geographic coverage beyond the current 18 industrial zones, to extend its period beyond 10 years, and most importantly, to revise the Syrian labor requirements to make it easier for Jordanian manufacturers to meet the quotas. But there are cynics who believe that the issues of duration, location and Syrian labor requirements obscure a more fundamental problem: the possibility that Jordan’s level of export competitiveness in the EU is already so low that its ability to access the EU markets will remain challenged regardless of what efforts are made to increase its potential value. If the leaders responsible for export promotion at the JIC share this more cynical view about the potential of the EU ROO agreement, it would make sense that there is no sense of urgency to invest time and resources promoting it.

USAID, through its Jordan Competitiveness Program, has taken a different tactic. JCP has advised Jordan to specifically target two new export markets; East Africa and Central Asia. The EDE team suggested that the rationale for selecting these two markets is that they help Jordan diversify away from its concentrated exposure to the volatility of regional import markets.

As the exhibit below demonstrates, both East Africa and Central Asia are included in the International Trade Center’s (ITC’s) estimate of markets with the most potential for Jordan, derived from the ITC’s export potential web portal. However, the ITC model sees even stronger opportunities for Jordan in North Africa, ASEAN, East Asia and South Asia; but these four apparent superior markets were passed over. There may be a clear technical explanation for why Jordan was advised to look at Central Asia and East Africa versus the other four markets, but the assessment team was unable to find one. Perhaps it is merely coincidence, but one possible explanation for selecting Central Asia and East Africa is the fact that the US contracting firm DAI is the prime contract holder for the USAID/Jordan JCP project; the USAID/East Africa Trade and Investment Hub; and the USAID/Central Asia Competitiveness, Trade and Jobs Project.

http://exportpotential.intracen.org/

https://www.eatradehub.org/

https://www.eatradehub.org/

https://www.dai.com/our-work/projects/central-asia-competitiveness-trade-and-jobs-activity-ctj

https://www.dai.com/our-work/projects/central-asia-competitiveness-trade-and-jobs-activity-ctj


Exhibit: Markets with Potential for Jordanian Exports

What is clear looking at the markets that have been recommended by the Europeans and USAID/Jordan JCP is that having Jordan focus on them is what best serves the interests of Europe and DAI. What is not clear is whether focusing on these markets is also what is in the best interests of Jordan. That could explain some reluctance or skepticism. The possibility that this is a key issue is one of the principle reasons for USAID to consider the recommendation outlined in Annex 2, efforts to facilitate more consensus around products and markets.

3. WILL SPINNING IT OUT ACTUALLY SOLVE THE PROBLEM?

The only reason to believe that spinning the export promotion function out of JIC would solve the problem of it not happening sufficiently is if we believe JIC’s reason to be incompetence or indifference. If the reason for lack of progress stems from disagreement or concern with recommended target markets or target products, or general political economy, then spinning it out is unlikely to have any effect.

ANNEX B: FACILITATING MOVEMENT TOWARDS CONSENSUS

The International Trade Center (ITC) and International Labor Organization (ILO) developed an analysis of Jordan’s export and employment potential and presented the work in Amman in December 2017 to several institutions in Jordan, including: Jordan Chamber of Industry, EU Delegation, French Embassy, Dutch Embassy, GIZ, UNIDO, ILO

EXPORT POTENTIAL

The assessment of export potential is based on ITC’s automated methodology to identify the most promising export products and attractive import markets based on a wide range of data including information such as market dynamics, trade and tariff data, distances between countries, economic and demographic growth, climate conditions and port access. The methodology incorporates data from 226


countries and over 4,000 products to rank products, sectors and markets for trade support. Overall rankings are derived through the generation of two indicators:

1. Export Potential Indicator (EPI): The dollar value of potential exports for those products already exported by the country derived through a structural model of world trade

2. Product Diversification Indicator (PDI): The dollar value of opportunities to diversify into new products based on “product space” methodology and market demand considerations.

Summary data and exhibits are available through the ITC website where users can configure results according to several parameters. For example, the exhibit below identifies Jordan’s products with the most potential.

Exhibit: Products with Potential for Jordanian Exports

EMPLOYMENT POTENTIAL

An assessment of employment potential can be derived from the export potential findings when sufficient data on labor and input output relationships are available. The ITC/ILO study assumes that Jordan achieves its unrealized export potential through increased production, in other words, supply to the domestic market and other markets is not reduced. The analysis of employment potential looks at both direct (export production) and indirect (i.e. inputs, services) employment effects to produce an aggregate number. The slides included on following pages are drawn from an ITC/ILO presentation deck titled: “Strengthening the Impact on Employment of Sector and Trade Policies in Jordan” Amman, December 18, 2017.


ANNEX C: ECONOMIC GROWTH INTERVENTIONS

Donor Type Intervention Focus Project dates

Budget (Total estimated)

JICA Bilateral Project for Capacity Development of Vocational Training Corporation in the Field of Occupational Safety and Health

Jan 2017 – Jan 2021

JICA Bilateral Project of Economic Empowerment and Social Participation of Persons with Disabilities

Feb 2017- Jan 2020

JICA Bilateral Project for Strengthening the Capacity for Career Counseling for the Youth

April 2017- March 2020

JICA Bilateral The Project for Community-based Regional Tourism Development in Petra Region

Nov 2015 – Oct 2018

JICA Bilateral The Project for the Construction of the Petra Museum

Construction of new museum in Petra March 2014 - Present


JICA Bilateral The Project for Energy conservation through upgrading water supply network in Jordan

Infrastructure improvement 2010 - Present

JICA Bilateral The Project for the Study on Electricity Sector Master Plan in the Hashemite Kingdom of Jordan

Prepare electricity sector master plan for Jordan consisting of a long-term demand

DFID Bilateral Jordan Compact Economic Opportunities Program

Promote economic development and opportunities in Jordan for the benefit of both Jordanians and Syrian refugees. DFID is supporting development loans to the GoJ based on benchmarks that include work permits for Syrians, improved labor standards and investment climate reform.

2015-2019 USD 185,000,000

DFID Bilateral The UK-Jordan Investment & Trade Advisory Program (ITAP)

Improved the implementation of the GoJ’s investment attraction and trade promotion policies to create economic opportunities and jobs for Jordanian and Syrian refugees. ITAP finances diagnostic and feasibility studies as well as advisory inputs to catalyze interventions that attract investment and promote trade. It will also supports the capacity of the Program Management Unit (PMU) within the Ministry of Planning and International Cooperation (MOPIC). ITAP supports JIC and private sector take advantage of Relaxed Rules of Origin under the Jordan Compact.

USD 2,100,000


DFID Bilateral Micro, SME Finance Facility Grant to IFC to Increase access to enterprise finance by improving legal, regulatory and institutional frameworks for bank loans to MSMEs; supporting banks and other financial institutions to improve lending practices to MSMEs; and assisting

MSMEs through mentoring, incubator services and business networks.

2011 - Present

USD 2,500,000 (contribution to overall IFC fund)

DFID Bilateral The Arab Women's Enterprise Fund (AWEF)

AWEF stimulates increased women’s economic empowerment and agency through a market systems approach. WEF aims to improve gender awareness and sensitivity across target companies’ human resources policies, increase employment and retention of women in the labor force, and raise awareness and uptake of standards and certification of products made by women working at home.

2015 - 2020

DFID Bilateral Shell Foundation Small and Medium-Sized Enterprise (SME) Initiative for Egypt and Jordan

The SME Initiative assists start-up and growing SMEs in Jordan. The project will benefit enterprises through delivery of: i) business advisory services; ii) medium-term risk capital; and iii) support for market linkages.

2014 - 2017 USD 2,250,000

DFID Bilateral Jordan Labour Market Programme (J-LaMP)

Job support for Syrians and low income Jordanians through a pilot model in which various approaches are tested and successful ones are scaled. Additional component includes focus on skills and training through TVET and other modes. Open call to implementers to suggest demand driven innovative approach. No prescribed approach

2017 - 2020 USD 21,000,000


will be utilized.

GIZ Bilateral Improving access to remittances and other financial services through digital solutions (Digi#ances)

Project aims to improve conditions for using digital services for cross-border remittances are created for refugees and Jordanian households. Approaches include A needs-based digital remittance service at national level provides the basis for cross-border systems, Information campaigns and training courses tailored to the target groups promote the responsible use of digital financial services, and advising Central Bank of Jordan (CBJ) on developing regulatory and supervisory mechanisms

2015 - 2018

GIZ Bilateral Training for water and energy efficiency (Phase II)

Project objective is to ensure that Jordanian companies have qualified professionals at their disposal in the area of water and energy efficiency. The project is addressing the mismatch between the demand and supply for technically skilled labor by enhancing vocational training opportunities and human capacity building services, while assisting institutions in the field of vocational training to fulfil their mandate

2016 - 2019

GIZ Bilateral Employment Promotion in Jordan

The project goal is to have at least 4,000 people find employment or take up self-employment after participating in measures designed to boost the labor market. The projects works with national, regional and local actors to build and improve structures and skills for promoting employment. Employment initiatives in three pilot regions are bringing local actors together with the aim of increasing

2016 - 2020


the availability of jobs at local level. The actors include trade associations, regional governments and private businesses.

GIZ Bilateral Promotion of the Microfinance sector in the MENA region

The project is implementing the EU Action ‘Promoting financial inclusion through improved governance and outreach of microfinance in Jordan’. It supports the government in reforming the microfinance sector and in the organizational reform of the Development and Employment Fund, which is to become an apex lending institution for Jordanian MFIs.

2011 - 2018

GIZ Bilateral Economic Integration of Women in the MENA Region

Econowin aims to improve conditions for the integration of women in business and employment in Egypt, Jordan, Morocco and Tunisia. The project consists of four components: changing attitudes and perceptions of women in employment, Advisory services and implementation of gender-sensitive economic and employment policies, economic empowerment of women, and professional orientation for women in higher and lower-qualified segments.

2010 - 2018

CIDA Bilateral Promoting Economic Development in Communities Hosting Syrian Refugees

The project seeks to assist Jordanians through the provision of: emergency cash, access to finance, youth vocational training programs, and reinforcing relationships between Jordanians and Syrians.

October 2014 – December 2017

CAD 5,000,000

CIDA Bilateral Women's Economic Linkages and Employment

This project aims to remove barriers to women’s access to the labor market in Salt, Irbid and East-Amman. It seeks to provide

March 2017 - March 2020

CAD 6,600,000


Development skills-based development in the private health sector, find solutions to child care challenges, and identify safe and affordable transportation to and from work.

CIDA Bilateral Improving Solid Waste Management and Income Creation in Host Communities

Support host communities most affected by the Syrian refugee crisis by improving the capacity and working conditions at Al-Akedir the second-largest landfill in Jordan. Approach includes: increasing the landfill's physical capacity, improving landfill management capacity by providing staff with financial and technical training; and improving efficiency by replacing worn-out machinery.

March 2015 - December 2017

CAD 15,000,000

CIDA Bilateral Innovative access: increase capacity for economic and social growth through innovation

This Volunteer Cooperation Program sends 747 volunteer counsellors in 11 countries. Improve economic and social wellbeing of the members of poor and marginalized communities, particularly women and youth by providing training and TA in sustainable economic growth and support Canadian knowledge and technology transfers through the Development Innovation Fund.

April 2015 - December 2019

CAD 125,000

CIDA Bilateral Micro, Small and Medium Enterprise Technical Assistance Facility

Improve access to finance for micro small and medium enterprises (MSMEs).

March 2013 - September 2018

CAD 196,000

CIDA Bilateral Digital Livelihoods Expand Digital Opportunity Trust (DOT) economic empowerment programming which includes helping to build skills in social innovation, entrepreneurship and ICT and use technology to increase their incomes and employment opportunities through leadership

November 2015 - February 2020

CAD 384,000


training, ICT readiness programs, and online learning for youth.

CIDA Bilateral Jordan-Canada Partnership for Youth Employment

Increase economic benefits to youth (both genders) in Jordan in the private sector in waged employment and self-employment. Approach includes training to instructors at selected vocational schools and community colleges on business and soft skills, gender equality, business and entrepreneurship skills and organizing work placement programs.

March 2012 - December 2017

CAD 5,500,000

CIDA Bilateral Sustainable Economic Development Through Renewable Energy

Improve the livelihoods of 150 000 women, men and their families in poor communities of the Ajloun and Jordan Valley (Deir Alla) regions through the introduction of renewable energy and energy efficiency solutions at the household level.

March 2016 - June 2020

CAD 20,000,000

CIDA Bilateral Jordan Valley Links: Enterprise Development in the Jordan Valley

Increase the contribution of women and youth to Jordan’s economic growth. Two main approaches to achieve this goal: (1) improving the entrepreneurial and business knowledge and expertise of women and youth through capacity building and establishing market linkages; and (2) reducing barriers to entry for enterprise development for women and youth

January 2016 - December 2020

CAD 19,225,000

CIDA Bilateral Support for Women’s Economic Achievement in Jordan

Support women’s economic empowerment in Jordan which shows some of the lowest rates of female political and economic participation in the Middle East Region. The project fosters entrepreneurship among school girls and supports women-led business start-ups by developing a business incubator for women,

February 2017 - December 2010

CAD 5,161,437


training modules, a leadership program and sensitizing and building the capacity of decision-makers.

KOICA Bilateral Establishment of Specialized Industrial School in Zarqa

Construction of a specialized school in coordination with GIZ and Ministry of Education to train students in electricity use, electric cars, car mechanics, air conditioning, welding and metal, carpentry and decorations.

2017 - 2020 USD 7,500,000

KOICA Bilateral Establishment of E-procurement system

Supports General Supplies Department, Government Tender Department, Jordan Procurement Department and the Ministry of Information, Communication and Technology develop an electronic procurement structure.

2014 - 2017 USD 8,500,000

DANIDA Bilateral Danish-Arab Partnership Program

DAPP supports both economic and political reform in Jordan. In terms of economic support, DAPP focuses on helping young people to engage with the labor market by supporting job creation through vocational training and job matching as well as entrepreneurship. DAPP also supports labor-market reforms and social dialogue between businesses and their employees to promote a more stable labor market.

2005 - Present

USD 7,000,000

Embassy of the Netherlands

Bilateral Strategic Export Marketing Plan for the Jordanian agriculture sector

Support to EPA (the Jordan Exporters and Producers Association for Fruits and Vegetables) to develop a large-scaled exporting strategy which aims to link those Jordanian agriculture sectors that hold a comparative advantage to prospective niches in global markets. First stage is market assessment and exploratory phase. Second stage is to identify


promising companies and conduct networking/study trips based on a cost-sharing model with companies.


Bilateral Cut Flower Association The Netherlands seeks to support the construction of a new facility, a feat which would bolster the exporting capacity of the flower sector in Jordan.


Bilateral Airport Cooling Facility The Netherlands seeks to address the lack of adequate cooling at the airport that stifles the export capacity of many sectors. As part of the effort, support will be provided to enhance the cargo space’s infrastructure in general and the cooling facility’s holding ability in particular at Queen Alia Airport.


Bilateral Job Creation in the Manufacturing Sector

The Netherlands is supporting an ILO-led project aimed at helping thousands of Jordanian and Syrian refugees’ access decent jobs in the Jordanian manufacturing industry. The program comprises a wide array of initiatives from the construction and staffing of employment service centers aimed at job matching, to the development of a rich and comprehensive database, to the provision of technical assistance, both to the Jordanian government as well as high-potential private sector corporations.


Bilateral Dutch Good Growth Fund (DGGF)

Support provided to Jordanian SME’s to obtain capital. A major instrument is the provision of funds to Grofin, a development financier.

USD 3,000,000



Bilateral Private Sector Facilitation The Embassy of the Netherlands functions as a facilitator between Dutch organizations and their Jordanian counterparts. The Embassy taps into Netherlands Senior Expert Program (PUM) and the Jordan Europe Business Association (JEBA) to bring experts (volunteers) to Jordan to support specific SMEs. Costs are shared between Embassy and Jordanian enterprises.


Bilateral Support to Exporters (Relaxed Rules of Origin)

The Netherlands is exploring proposals and partnerships with the German GIZ, the British DFID, as well as the International Rescue Committee (IRC). Groundwork is being laid to launch a consolidated effort to assist Jordanian companies leverage the opportunity associated with the relaxation of the rules of origin for the European market.

AFD IFI Disi water project

Construction and operation of a drinking water supply system which will withdraw 100 million m3 of groundwater reserves every year from the Disi fossil aquifer and convey the water to the city of Amman.

USD 200,000,000

AFD IFI Wadi Al Arab

Collect water from Jordan Valley to send to suburbs of Irbid.

USD 43,000,000

AFD IFI Amman-Zarqa Extension Extension of Disi water distribution USD 48,000,000

AFD IFI Improved water distribution performance in Irbid

Project focuses on strengthening, restructuring, rehabilitating water distribution networks (and to a smaller extent, wastewater

USD 188,000,000


governorate networks); providing technical assistance to YWC; and there is a social component for the most vulnerable (Syrians and Jordanians).

AFD IFI Waste Water Funding feasibility studies for North East Balqa governorate wastewater treatment plant. Mobilization of green climate funds to be delegated to AFD.

AFD IFI Red Sea-Dead Sea

AFD is managing a multi-donor account. AFD has mobilized funding for the various studies that are needed and is providing technical assistance for concessional loan partners.

USD 240,000,000

AFD IFI The Green Corridor Upgrade of transmission lines from Ma’an to Amman

USD 55,000,000

AFD IFI Geothermal Study Assess the potential for geothermal to replace electricity for heating. Tender ongoing.

AFD IFI Energy efficiency for hotels Technical assistance to support hotel audits for energy efficiency and renewable energy. AFD provides 50% funding for measures implementation (water heaters, etc.) and hotel funds other 50%.

AFD IFI Bus Rapid Transit (BRT) Sub-sovereign financing for Greater Amman Municipality (GAM) to develop a quick bus with two main lines. Expected operation is 2020 with an estimated 315 000 passengers that will use the bus service.

USD 166,000,000

AFD IFI Study on the rehabilitation of the JNRP railway

Partial use of Hijaz tracks seems most viable and cost effective than a brand-new project


(very costly)

AFD IFI Support to Municipal Finance in Jordan

Strengthening and modernizing the role of municipalities in terms of local development and local democracy by improving their management capacities and their resources through a development policy loan.

USD 123,000,000

AFD IFI A project to label locally produced olive oil

Build the Jordanian olive oil producers’ capacity and other players involved in the sector to meet the requirement of international traceability and food safety standards

USD 1,000,000

EBRD IFI Shobak Wind Farm Provision of a senior secured A/B loan of up to USD 52 million to Shobak Wind Energy PSC to finance the construction of a 45 MW wind farm (the Project) near the Shobak town municipality

USD 52,000,000

EBRD IFI Risha Solar PV Project A senior secured limited recourse loan of up to USD 27.6 million to finance the development and construction of an up to 50 MWac solar photovoltaic plant located in the Risha region

USD 27,600,000

EBRD IFI Foursan Capital Partners II The EBRD is providing an equity commitment of up to USD 25 million to Foursan Capital Partners II Limited Partnership in order to support the development of the private equity industry in Jordan.

USD 25,000,000

EBRD IFI IPP4 Al-Manakher Power Project

A loan to fund the development of a 240MW peaking power plant, 15 km east of Amman in Jordan

USD 100,000,000

EBRD IFI EJRE Solar Project Jordan A loan to finance the construction of a 20 MW solar photovoltaic plant located approximately

USD 24,000,000


11 km to the south east of Ma’an City

EBRD IFI Greenland Solar Project Jordan

A loan to finance the construction of a 10 MW solar photovoltaic plant located approximately 10 km to the south east of Ma’an City in Jordan

USD 13,000,000

EBRD IFI Al Jazeera Agriculture Company’s

A loan to support the Al Jazeera Agriculture Company’s expansion program. This will include expansion of the feed mill and silos, the retail segment, new energy efficient heat exchangers as well as the financing of permanent working capital.

USD 21,000,000

EBRD IFI MS Pharma Loan A loan to MS Pharma WLL, Bahrain, to finance the investment program for the MS Pharma’s subsidiaries in Jordan and Morocco, active in manufacturing of generic pharmaceutical products. The project will enable MS Pharma to increase its capacity and build a differentiated product portfolio in chronic diseases

USD 30,000,000

EBRD IFI Jordan MSME Framework - Bank Al Etihad

A loan to support lending to local MSMEs. The Facility has two tranches of US$10 million equivalent each. Bank Al Etihad is eligible to benefit from the loan guarantee scheme comprised of (i) a first loss cover provided by the EBRD and (ii) a second loss cover provided by the Jordan Loan Guarantee Corporation (JLGC). BAE is eligible to benefit from tailor made technical assistance as well.

USD 20,000,000

EBRD IFI Jordan MSME Framework - Cairo Amman Bank

A loan to support lending to local MSMEs. The Facility has two tranches of US$10 million equivalent each. Bank Al Etihad is eligible to benefit from the loan guarantee scheme

USD 20,000,000


comprised of (i) a first loss cover provided by the EBRD and (ii) a second loss cover provided by the Jordan Loan Guarantee Corporation (JLGC). CAB is eligible to benefit from tailor made technical assistance as well.

EBRD IFI FIF – Jordan MSME Framework – Jordan Ahli Bank

A loan to support lending to MSMEs in Jordan. USD 20,000,000

EBRD IFI Ayla Oasis Regeneration Project Aqaba

A loan to support the development and operation of the first phase of the Ayla Village, part of the wider Ayla Oasis regeneration project, a masterplan-led regeneration located in the immediate vicinity of the border between Jordan and Israel on the western edge of the city of Aqaba

USD 60,000,000

EBRD IFI Al Rajef Wind Farm A loan to Green Watts Renewable Energy LLC to finance the construction of an 82 MW wind farm (the Project) in Jordan near the village of Al Rajef in the Ma'a

USD 68,000,000

EBRD IFI ACWA Sunrise Al Mafraq Solar PV

A loan to finance the construction of a 50 MW solar photovoltaic plant located within the King Hussein Bin Talal Development Area near the city of Al Mafraq.

USD 27,000,000

EBRD IFI FRV/Empire Al Mafraq Solar PV Project

A loan to finance the construction of a 50 MW solar photovoltaic plant located within the King Hussein Bin Talal Development Area near the city of Al Mafraq

USD 35,500,000

EBRD IFI Hussein Thermal Power Station Repowering/Zarqa

A loan to Zarqa Le Tawleed Al Takah Al Kahrabaieyah to finance the construction of a 485 MW combined cycle gas turbine (CCGT)

USD 75,000,000


power plant in Zarqa, 40 km north-east of Amman, Jordan (the Project). The Project will replace the now obsolete 351 MW Hussein Thermal Power Station (HTPS).

EBRD IFI Al Safawi Solar PV Project A loan to finance the construction of an up to 51 MW solar photovoltaic plant located in Safawi Area, 150 km east of Amman. The Project will support the country's goals of increasing renewable energy capacity, reducing reliance on costly hydrocarbon imports and meeting rapidly growing electricity demand.

USD 70,000,000

EBRD IFI Abdali District Heating and Cooling

A loan to Jordan District Energy (“JDE”) for the establishment of Jordan’s first district cooling and heating plant which will deliver cooling and heating to the newly built Abdali Urban Regeneration Development (“AURD”) in Amman

USD 30,000,000

EBRD IFI Abdali Urban Regeneration/Abdali Centre

A loan to support the completion of Phase I of the Abdali Urban Regeneration Project (“AURP”)

USD 80,000,000

EBRD IFI Ma'an Solar Power Project A loan to finance the construction of a 24 MW solar photovoltaic plant located approximately 13 km to the south east of Ma’an City.

USD 25,000,000

EBRD IFI Oryx Solar Project Jordan A loan to finance the construction of a 10 MW solar photovoltaic plant located approximately 11 km to the west of Ma’an City in Jordan.

USD 13,000,000

IFC IFI Jordan IPP The project will address reforms impacted by the Jordan PforR disbursement linked indicators (DLIs) on improving investment

2016 - 2020 USD 732,094


promotion, investment climate, and labor market. The project will support capacity building within the JIC and development of a strategy to link Jordanian companies with foreign investors.

IFC IFI Tamweelcom 2 Advisory engagement with Tamweelcom consists of two components: Product Development for Business Lending and risk management

2017 - 2019 USD 600,000

IFC IFI MS Pharma Support to expanded investment by MS Pharma to enter to new markets and expand capacity of existing facilities.

USD 150,000,000

IFC IFI ACWA Power Zarqa Thermal Power Station

Loan to Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyaha to support design, construction, ownership and operation of a 485MW combined cycle gas fired power plant located in the Zarqa Industrial Zone

USD 185,000,000

IFC IFI NMB Risk Management IFC to provide advisory services to a key MFI in Jordan to help build their risk management and internal audit functions.

2016 - 2018 USD 370,000

IFC IFI FRV Solar A loan to support the development, construction, operation and maintenance of a 50MW solar photovoltaic (PV) plant and a 5km 33kV transmission line connecting to a substation in the Mafraq Governorate

USD 72,000,000

IFC IFI JOR Insp Ref II Support to the Jordanian governments inspection reform initiative, through a National Inspection Reform Program. The main objective of this program is to support the GoJ

2012 - 2017 USD 5,000,000


in building high quality inspection services that will lead to effective public inspections where scarce government resources would be more effectively utilized on targeted inspections based on risk assessment.

IFC IFI Jordan Solar One A loan to support the construction of a 13km 33kV transmission line connecting to Al Hassan substation to Jordan Solar One PV power plant in Mafraq.

USD 43,500,000

IFC IFI Arabia One Solar A loan to support construction of Arabia One, a 10 MW solar PV power plant located in the Ma’an Development Area.

USD 22,500,000

IFC IFI Shamshuna PV A loan to assists Shamsuna Power Company develop a 10 MW PV project within the Aqaba Special Economic Zone.

USD 15,000,000

IFC IFI Adenium Jordan - Zahrat Al Salam

Construction of three PV power plants in Ma’an: Zahrat Al Salam, Al Ward Al Joury and Al Zanbaq.

USD 22,500,000

IFC IFI Falcon PV A loan to support development of the Falcon Ma’an is a 21-megawatt (MW) solar photovoltaic (PV) power plant located in Ma’an.

USD 37,500,000

IFC IFI Queen Alia II Loans to support rehabilitation and construction of Queen Alia Airport to support concession.

USD 100,000,000

IFC IFI Bank al Etihad Advisory services to assist the Bank increase its outreach and support Jordan's small and

USD 578,000


medium enterprise (SME) sector.

IFC IFI Jordan Loan Guarantee Corp. Advisory services to assist Jordan Loan Guarantee Corporation (JLGC) in developing its capacity to provide banking services for Small and Medium Enterprises (SMEs).

USD 537,000

IFC IFI Luminus Equity Investment to support expansionary plans by the company.

USD 10,500,000

IFC IFI Tafila Wind Farm A loan to support the construction, operation and maintenance of a 117 MW wind farm and associated facilities in the Tafila

USD 116,000,000

IFC IFI E4ICT Provision of services to develop training programs and a qualifications framework that are expected to improve the skills of the existing and potential labor force working in the Information Communication and Technology sector in Jordan

USD 845,000

IFC IFI PCB Jordan 2 Provision of support services to identify a strategic partner/investor who will implement and operate the newly established bureau and will also help in raising awareness among public and private stakeholders on best practice credit reporting frameworks and mechanisms

USD 250,000

IFC IFI Al Hikma V Loan to support investment and expansion plan of Hikma.

USD 110,000,000

IFC IFI Jordan India Fertilizer Company

A loan for the construction and operation of a 475,500 metric tons P2O5 per annum (“MTPA”) phosphoric acid plant in Eshidya

USD 450,000,000


Ma’an Governorate.

IFC IFI JPMC Terminal A loan to support the construction and operation of a new rock phosphate terminal in the south port of Aqaba, by Jordan Phosphate Mines Co.

USD 90,000,000

IFC IFI Jordan Student Loans Establishment of a student loan program for university students in Jordan, whereby IFC will share risk-on the portfolio of loans

USD 25,000,000

IFC IFI CTI Group II A loan to support operation and expansion of cement carrier fleet.

USD 30,000,000

IFC IFI Zara II A loan to support financing for Zara’s hotel at Tala Bay.

USD 40,000,000

IFC IFI Capital Bank of Jordan Advisory services to the bank for corporate governance and risk management. This includes equity investment.

USD 50,000,000

World Bank Multilateral Promoting Financial Inclusion Policies in Jordan

Analysis, training and capacity building for the Central Bank of Jordan.

USD 1,000,500

World Bank Multilateral Innovative Startups Fund Project

The objective of the Innovative Startups Fund Project for Jordan is to increase private early stage equity finance for innovative small and medium enterprises (‘SMEs’)

2017 - 2023 USD 50,000,000

World Bank Multilateral Economic Opportunities for Jordanians and Syrian Refugees P4R

Concessional financing to Ministry of finance based on pillars of Jordan Compact that include work permits for Syrians, improvement in investment climate and support to host communities through grants to municipalities.

2016 - 2021 USD 250,000,000


World Bank Multilateral MSME Development Project for Inclusive Growth

Purpose is to contribute to the improvement of access to finance for micro, small and medium enterprises. This loan will support financial intermediation on governorates outside Amman to promote growth in underserved districts and so address regional disparities. The project also pays special attention to women as recipients for support by designing new products that target women and by encouraging banks to have special windows for them, especially in governorates where social barriers can be an obstacle to working women.

2013 - 2020 USD 70,000,000

World Bank Multilateral JO-MSME Development for Inclusive Growth

The project development objective of the Micro, Small, and Medium Enterprise (MSME) Development for Inclusive Growth Project for Jordan is to contribute to the improvement of access to finance for micro, small and medium enterprises. This project is meant to be a follow on that scales up the original MSME Development Project for Inclusive Growth

2015 - 2020 USD 50,000,000

World Bank Multilateral Strengthening the Regulatory and Institutional Framework for MSME Development

This project will support strengthening credit guarantees schemes aims at developing the Jordan Loan Guarantee Corporation (JLGC) SME loan guarantee products, and designing new ones that are tailored to SMEs, enhancing the consumer protection mechanism, and developing the regulatory and institutional framework for micro finance institutions and non-bank financial institutions

2014 - 2018 USD 3,000,000

EU Multilateral Promoting Financial Inclusion Both budget and technical support to implement the National Microfinance Strategy

2014 - 2019 USD 43,000,000


in Jordan and National Financial Inclusion Strategy.

EU Multilateral Sahara Forest Project Construction of the SFP Launch Station that includes greenhouses, research facilities and PV solar plant.

USD 930,000

EU Multilateral JADE The project aims to improve the technical and management capacity within the enterprise and entrepreneurial ecosystems. The project will attempt to improve business processes, support international accreditation, and develop technical skills.

2017 - Present

EU Multilateral Jordan Upgrading and Modernization Program (JUMP I & II) & Jordan Services Modernization Program (JSMP)

Support to JEDCO private sector enterprises through diagnostic studies, business plan and capacity development, national linkages, and grant for exports, certifications, trade missions and start-ups.

2007 - 2017 USD 68,000,000


ANNEX D: HUMANITARIAN INTERVENTIONS – SYRIAN REFUGEE RESPONSE

Cash transfers involve disbursement of cash or vouchers on an ad-hoc or regular basis to beneficiaries. Funds are mostly used to pay for food or healthcare related expenses.

Winterization supports the distribution of blankets, heating equipment and clothes

Education programs include early childhood literacy and numeracy, teacher training, classes in camps, and construction of learning spaces outside camps

Employment and empowerment interventions aim to support independence of refugees through community center that provide legal assistance and skills training. Vocational training and self-employment programs are also common.

Protection activities include the provision of psychosocial support and adequate shelter.

Humanitarian Interventions - Syrian Refugee Response27

Cash

Transfer Winterization Education Employment

and empowerment

Protection

UNHCR UNICEF Oxfam WFP

Jorda Red Cross

Norwegian Refugee Council

CARE

Save the Children UK

UN Women

Danish Refugee Council

27 Overseas Development Institute, Working Paper 501, January 2017


ANNEX E: PRIVATE SECTOR TECHNICAL REPORT

Private Sector Survey Technical Report

Prepared: January 30th, 2018


STUDY OBJECTIVES

This quantitative study fell under phase 2 – data collection for the economic growth and competitiveness assessment which served as a follow-up to the 2012 Jordan Economic Growth Assessment to critically examine Jordan’s economic growth trajectory and competitiveness, as well as major challenges and opportunities to inform USAID’s understanding of economic growth and employment strategies for the country.

The main objective of the private sector survey was to gauge the perspectives and priorities of the private sector. The more specific objectives were to:

1. Reach statistically significant conclusions about different behaviors, attitudes and preferences of formally registered Jordanian businesses.

2. Understand how these behaviors, attitudes, and preferences, differ among different groups defined according to size, location and industry.

3. Develop an additionally detailed and statistically significant perspective about Jordanian businesses that are involved with the tourism sector.

STUDY OVERVIEW

Mindset conducted face to face as well as phone interviews with 1,870 companies, whereas the set target was 1505 companies in addition to the tourism sample of 397, distributed all over Jordan, in all of its 12 governorates.

The minimum overall sample size of 1,505 reflects the aggregate population of approximately 80,000 registered Jordanian businesses.

The 1,870 companies included the tourism sample (534 achieved whereas the target was 397) as it overlaps to a great extent with the core sample, therefore, when achieving some of the ISIC’s under the core sample, we covered most of the achievable interviews under the tourism sample.

Please refer to appendix D for a detailed breakdown of the sample quotas provided by MESP and the achieved quotas by Mindset.

The original timeline was from October 2017 until December 2017; however, the actual timeline extended till January 2018 due to various challenges faced during fieldwork.

RESPONDENTS

Mindset targeted decision makers in private sector companies to ensure all questions are answered accurately.

The following questions were asked by the appointment setting team/ supervisors to determine if the person they are recruiting is in fact the primary key informant/ decision maker about the company interviewed:

1. Are you the decision maker in the company? 2. Are you aware of the establishment of the firm? 3. Are you aware of the firm’s current operations? 4. Are you aware of the firm’s future plans?

If potential respondents answered 3 or more questions with “Yes”, the interview is scheduled. If they answered “Yes” to less than 3 questions, the contact details of the decision maker are requested and the process is repeated.


SAMPLING

Given its more direct applicability for this survey’s purposes, and the ability to mitigate any potential bias through weighted average comparisons, the private sector survey was developed through a quota sampling method - a type of non-probability sampling that provides substantial benefits in terms of our survey objectives.

This private sector survey used three categories of sampling units: (i) location of business; (ii) industry of business; and (iii) size of business.

Sampling units define the segmentation approach for sub-groupings of the overall population of registered Jordanian businesses. The quota-based sampling approach was designed to enable analysis of the population overall, as well as the subgroups.

For the first group, Location of Business, sampling units were defined as those businesses where the principal activity takes place within the territory of a Governorate, for each of Jordan’s 12 Governorates.

The second group, Size of Business, sampling units were defined according to number of employees, for each of the following categories:

● Micro Enterprise o 1 – 4 employees o 5 – 10 employees

● Small Enterprise (11 to 25 employees) ● Medium Enterprises

o 26 – 50 employees o 51 – 100 employees

● Large Enterprises (More than 100 employees) o 101 – 250 employees o 251 – 500 employees o 501 – 1000 employees o More than 1000 employees

Sampling units for the third and final group, Industry of Business, were defined using the International Standard Industrial Classification 4th Revision (ISIC Rev4). There are several levels of classification within ISIC. The highest-level classification scheme of ISIC Rev4 is an alphanumeric coding system for 21 sections of industrial activity. The 21 sections of ISIC are then broken down into 88 divisions which are identified by 2-digit numeric codes. Finally, for an even more granular segmentation of industry classifications, the 88 divisions can be broken down into 419 classes, which are identified by 4-digit numeric codes. Divisions can be identified within the class scheme by the first two digits of the class code.

For the purpose of our survey sampling units were established at the division level, which is the lowest level of disaggregation that is feasible to look at for a survey capturing the entire spectrum of industrial activities. By establishing sampling units at the division-level survey results could be aggregated up to the SNA levels as well as the ISIC section level which will be useful for studying survey answers to different types of questions.

From a sampling perspective, each of these three groups of sampling units are to be seen as independent. In other words, there was no intention to create a tiered structure of sampling units where the sampling unit in each group would be defined by combinations of all the different sampling units from each of the other groups. That level of detail would have required a level of time and effort that is far beyond the resources for, and requirements of this survey.


SAMPLING FRAME

Sample frames are datasets that contain the populations for each of the different sample units. For the purposes of this survey the sample frames have been established according to active companies contained in KINZ database.

The data includes all key information such as complete corporate address, names and titles of key personnel, and the application of ISIC 4 industry classification schematics, which is the same segmentation scheme employed in the overall assessment framework.

According to the KINZ data extract reviewed in August 2017 there are close to 80,000 unique and active businesses registered with Jordan’s Company Control Department within the Ministry of Industry and Trade. A breakdown of these businesses by Governorate is provided below in Table 1.

Table 1. KINZ Sample frame analysis disaggregated by location

Sampling Unit (Governorate) Sampling Frame

Ajlon 636

Amman 58,334

Aqapa 2,120

Balqa 2,289

Irbid 5,427

Jarash 689

Karak 1,397

Ma'an 870

Madaba 1,202

Mafraq 1,482

Tafilah 530

Zarqa 4,576

Total for all Governorates 79,552

SAMPLE DESIGN AND SELECTION

For this survey we opted to achieve a 95% level of confidence with a 5% margin of error (+/- 2.5%). Using these two parameters as a guide, the minimum sample size for this survey was determined at 1,505 registered businesses.


While the minimum overall sample size of 1,505 reflects the aggregate population of approximately 80,000 registered Jordanian businesses, the sampling quotas are set at sub-group level for each of the three different variables, rather than just the population level, which facilitates statistical significance in sub-group level inferences, as well as differences between sub-groups. Quotas were calculated on a proportional basis, subject to maximum and minimum amounts to ensure that businesses in categories that are heavily skewed towards certain categories do not dominate the resulting sample. Quotas for each of the three variable groups, are outlined in appendix D.

In order to incorporate a robust evaluation of businesses involved in the tourism sector into the survey an additional sample of tourism-related businesses was developed. This involved building an additional sample of up to 397 additional businesses that are involved in the tourism industry, bringing the total sample up to 1,902 companies. However, this sample was covered in most through the core sample because of the overlap between the two samples (534 were achieved in total).

Because the tourism element is focused on a more detailed set of industrial activities the sampling units capture activity at the 4-digit “Class” level of ISIC.

Mindset, based on the directive of the technical team from MESP, contacted KINZ to provide an extensive list of companies that are 7 times the sample size required based on the quotas set for the study. Mindset received a list of almost 8000 numbers belonging to the ISIC’s shared by MESP technical team to be covered within the study.

Once the sample lists were received from KINZ, Mindset prepared the lists for calling by adding necessary variables needed for appointment setting. This resulted in several steps of refinement of the list, such as; requesting replacements and correct contact information.

Subsequently, Mindset randomized the list and started out by setting appointments with companies prior to the visit to ensure that the correct person (decision maker and key informant of the company) is present at the time of the interview and can give the needed time.

However, Mindset was faced with the challenge of very high rejection rate in the field even after setting appointments (rejection rate after appointment setting was 80%) to which Mindset, in collaboration with MESP responded by adopting a hybrid approach of both setting appointments and selecting a replacement sample in the field of companies in the same areas covered by KINZ lists and belonging to the same ISIC and company size as per the quota. This approach increased the achievement of the team while ensuring meeting the quota set by the MESP technical team. We were also committed to our maximum variation approach, where we spread the required ISICs and company sizes across all governorates. This was achieved through daily internal evaluations of the targeted vs. achieved targets and providing instructions to the field team accordingly.

REPLACEMENT PROCESS

The process was initiated by receiving sample lists by KINZ which were distributed among the appointment setting team who scheduled interviews for the field team. The successful call lists were organized by placing them into clusters based on specific locations and then these clusters were distributed among the field teams.

Each potential business to be interviewed was given a call two days prior to verify the address and confirm the date and an exact time of interview.

Any unsuccessful interviews during fieldwork was replaced immediately with another company with the same criteria (same ISIC) in the same location (street, if not possible area, if not possible city, if not possible governorate, if not possible on a national level, respectively). This was accomplished through the supervisors


who would scan the area for potential candidates, screen them as per required criteria, obtain their approval then ensures an enumerator conducts the interview as per agreed on time.

RESPONSE RATES

Mindset has successfully interviewed 1,870 businesses, mainly through the replacement sample approach using KINZ as a general base for replacement as demonstrated in table 2 below. This was due to the high rejection rate on the phone when the appointment setting team tried to secure sufficient interviews for the field team, in addition to the high rejection rate in the field.

Table 2. Successful field interviews breakdown

Total successful field interviews 1,870 100%

KINZ sample lists 264 14%

Successful phone interviews 100 5%

Successful field interviews 164 9%

Replacement sample from the field 1,606 86%

Table 3 below shows that Mindset contacted 53% of the companies listed within KINZ lists, and if we want to include the unsuccessful phone attempts (unreachable by phone), the percentage increases to almost 59%. The remaining 47% were not contacted because the quota was completed for the ISIC number they belonged to.

Out of the 4,005 respondents Mindset contacted, 53% agreed to participate. However, only 7.7% of those who agreed to participate in the survey over the phone were actually interviewed in the field

Table 3. KINZ sample lists breakdown

Total sample received from KINZ 7,564 100% Total not contacted to set an appointment through the phone 3,559 47% Completed quota 3,112 87% Unreachable by phone 447 13% Total contacted to set an appointment through the phone (100%) 4,005 53% Unsuccessful phone outcomes 1,883 47% Does not meet criteria (not a private company, respondent left the company, not a decision maker) 189 4.7%

Requirement sent but no approval received* 16 0.4% Target respondent travelled 101 2.5% The company is not operating now 821 20.5% Wrong number 43 1.1% Refusal on the phone (selected respondent unwilling or unable to complete the interview) 713 17.8%

Agreed to set up an appointment through the phone 2,122 53% Successful field interviews 164 4.1% Successful phone interviews** 100 2.5% Refused the appointment in the field 57 1.4% Target respondent travelled 8 0.2%


Unreachable in the field 226 5.6% Completed quota 1567 39.1%

*A few companies contacted by Mindset requested that Mindset provided them with the study permit. This was sent via email along with the facilitation letter from MESP/USAID.

**To support MESP in their analysis, Mindset added the GPS coordinates for interviews that were conducted over the phone. This was accomplished by sending enumerators to the companies’ locations and recording the GPS coordinates or relying on KINZ database

Below is a table that demonstrates the rejection rate for the replacement sample.

Table 4: Replacement sample breakdown

Replacement sample contacted in the field 6,982 100%

Successful field interviews 1,606 23%

Refused the appointment in the field 5,376 77%

QUESTIONNAIRE REVIEW:

Mindset reviewed the questionnaire in three ways: 1. Internal review and feedback 2. A mock / cognitive interview with three potential respondents 3. During the study’s pilot – 19 interviews were conducted outside of the sample during the 2 pilot

days, feedback was provided by the enumerators which was incorporated into the questionnaire Mindset’s suggested amendments were provided to MESP for approval. The main changes were:

1. Modifying the screening section in the tool 2. Adding the relation to tourism question 3. Adding the turnover rate question 4. Re-arranging the order of some questions 5. Rephrasing/ clarifying questions- options

TRANSLATION PROCESS:

Once the wording of the questionnaire has been finalized, the translation from English to Arabic was initiated. The translation followed the following steps:

● The questionnaire was translated by a professional translator.

● The translation was reviewed by senior project staff and amendments were conducted accordingly as seen fit.

● The translation was reviewed a second time by a different senior project member by comparing the translation with the English version of the questionnaire.

In addition to producing an accurate translation, this process also ensured that key project staff are fully engaged in the questionnaire and are ready to train interviewers and answer their questions during training and fieldwork.


SCRIPTING PROCESS:

The ODK questionnaire script included rigorous controls to prevent and flag illogical answers. There is a functionality that allows monitoring of specific key questions.

The tool was pre-tested and modified prior to scripting on the system and after scripting to ensure that all quality assurance rules were applied correctly. An export of dummy data was done prior to commencement of data collection for assurance that the data is compatible with the needed format.

This allowed for the submission of quantitative data in SPSS and Excel formats.

INTERVIEWERS AND TRAINING

All team members underwent a structured and thorough two-day training. Table 6 lists all the trainings that were given throughout this study.

Table 6: List of trainings provided throughout the study

Session Date Attendance Location Introduction and paper questionnaire

13 Nov

28 enumerators 5 supervisors

Midraj Hall- Next to Mindset offices

Tablet training 15

Nov 28 enumerators Mindset offices

Introduction and paper questionnaire

18 Nov

10 Supervisors 4 enumerators

Mindset offices

Tablet training 19

Nov

7 enumerators (3 enumerators were re-trained since they faced difficulty during the first training)

Mindset offices

Tables 7 and 8 are the detailed training agendas that were followed whether for the paper questionnaire or tablet trainings.

Table 7: Training agenda for introduction and paper questionnaire training

Topic Time Organizing trainees and taking attendance 11:00-11.10 AM USAID / MESP introduction 11:10-11.30 AM Project background, objective and timeline 11.30-11:45 AM Methodology of the survey

● Target groups of the survey ● Selection of interviewees

11:45-12:00 AM

Break 12.00-12.15 PM Explanation of sections A and B 12:15-1.00 PM Explanation of section C 1.00-1.30 PM Explanation of sections D and E 1.30-2.00 PM Lunch break 2.00-2.30 PM Explanation of section F & G 2.30-3.15 PM Logistics for the project and data confidentiality

● How teams are divided ● Meeting points between enumerators and supervisors ● Importance of data confidentiality

3.15-4.00 PM


Table 8: Training agenda for tablet training

Topic Time Organizing trainees and taking attendance 10:00-10.10 AM Training on tablets for sections A and B 10:10-12.20 PM Break 12.20-12.30 PM Training on tablets for section C 12.30-2.00 PM Lunch break 2.00-2.30 PM Training on tablets for sections D and E 2.30-3.15 PM Training on tablets for sections F & G 3.15-4.00 PM

FIELD TEAM COMPOSITION

The field team consisted of 15 teams - 30 enumerators and 15 supervisors. Each supervisor managed a team of 2-3 enumerators depending on the clusters they were assigned.

Table 9 shows the distribution of the teams for the first week of fieldwork. This was a tentative schedule which was subject to change at any point as per the appointments setting team and the rejections in the field. Supervisors reported to the assigned governorate supervisor (Every 1-2 supervisors reported to 1 governorate supervisor).

Teams were re-distributed constantly starting the second week of fieldwork based on quotas achieved.

Table 9: Field Team Composition in the First Week

Governorate Locations Teams

Amman Sweifyeh- Ashrfyeh- Quismeh- Istiqlal

2 Northern Marka-Sothern Marka

Irbid industrial city-Palestine St.- University St.-AL Husun St.

2 Amman Complex- Hashmi St.-Baghdad St. Cinema St.

Mafraq Al Souq- Al Husain Neighbourhood- Al Dahyeh- Fadeen Neighbourhood 2

Jerash Qasabeh- Mestabeh- Sakeb 1

Zarqa Dulail-Al Jaish St.

3 Wadi Al Hajar- Highway- Ruseifeh-Awajan Ruseifeh-Qasabeh-AL Mesfa

Balqa Safout-Ain AL Basha- Baq'a- Fuhais-Mahis- Qasabeh 1

Aqaba Hotels St. Fifth city- Al Rasheed-Ma'amel- Third City

2 Al Salam Forest- Al Herafyeh-Al Hammamt St.-Al Souq

Ajloun Abeen-Al Hesbeh-Al Safar Complex

2 Baoun- Ras Muneef-Downtown-Anjara


Table 10 demonstrates the logistical breakdown of the teams for the second week of fieldwork.

Table 10: Field Team Composition in the Second Week

Governorate Location Teams

Amman Jabal Amman- Abdoun 2

Balqa Sothern shoneh, deadsea 2

Jerash Qasabeh-Dahleh 2

Mafraq University St 2

Amman Wadi Rimam 3

Irbid Petra St-Al husun St. 2

Zarqa Al Maslakh St.Al saadeh St. 2

Irbid Qasabeh- Al soq al shabi 2

Zarqa jabal Tareq-AL Musfa 2

Amman Baiader-Al Moqablen 2

Ma’an Al Maamel-Qasabeh 2

Tafilah Jerf Al darawesh 2

Karak AL Marj, Mouta 1

Ajloun Ebeen, Mojama AL safryet 2

Aqaba Qasaba 2

QUALITY CONTROL MEASURES

Mindset employed research best practice in the execution of this research project. The below are the quality assurance and control measures that were used throughout this task.

In addition to the below, a weekly meeting was held in the presence of the back-check team and the data processing experts to discuss progress of the previous week and pinpoint issues for additional focus within the data collection process. The logistics team distributed the weekly workload, and the supervisors and project manager discussed progress and challenges.

Moreover, a WhatsApp group was created for the project where the data processing supervisor shared daily notes on data quality and areas of focus to enumerators.


Table 11: Quality Control Summary

Procedure Description Percentage

Back-checks

Back-checks included calling back randomly selected businesses to verify key question and to monitor the performance of all enumerators. Additionally, faulty responses identified by the data processing expert were re-contacted for verification. The QC back-check form can be found in Appendix A.

55%

Supervisor accompaniment

During fieldwork, supervisors accompanied enumerators to ensure the proper methodology was observed.

11%

Visual consistency check

Questionnaires were reviewed visually for accuracy, errors in coding, logical issues, pattern response, and missing data.

100% of data

Data cleaning The data processing experts performed several levels of data cleaning for cohesion, logic, and completeness of data.

100% of data

Field supervision Field supervisors were required to ensure that the specified respondents are being interviewed as per requirements.

100% of data

To verify the locations of fieldwork, the enumerators’ tablets automatically recorded the GPS coordinates of the interview location.

As a result of the back-checks conducted, a total of 130 interviews were omitted from the dataset due to contradicting or missing information.

CODING

Coding of open-ended questions started on the second day of field. The data processing team was responsible for entering the codes daily and highlighting invalid answers for the call-back team.

Senior project members reviewed and approved the codes. Moreover, during data cleaning, the data processing officer reviewed all the entered codes to ensure they are valid for each question

DATA ENTRY AND PROCESSING

Data cleaning was done on an on-going basis starting the second day of data collection.

1. Common errors are collected by the data processing officer and relayed on a daily basis to the field team.

2. Data errors are divided into three types: a. Logic errors. Those are referred to the call back team for collection and verification. b. Data entry errors. Those are referred to the data cleaning team for correct entry. c. Open ended errors. Those are spelling mistakes which are also referred to the data cleaning

team for correct entry. d. Other checks that are done:

▪ Single response: contains 1 response


▪ Text response: contains words only ▪ Numeric values: contains numbers only ▪ Exclusive answers: contains 1 response only ▪ Skips: ensure skip patterns are followed ▪ The option “Other” in open-ended questions: response is entered if “other” is selected

and response is different from original options / codes 3. After all errors were addressed and modified onto the system, a final cleaning of the full dataset was

done.

PROJECT SCHEDULE

The project started on October 21st when Mindset received the English questionnaire from MESP.

Mindset fulfilled the requested sample as per original plan on the 18th of December including the governorate quota, yet Mindset requested to extend the timeline till the 24th of December to attempt and secure more interviews in unfulfilled quotas


Table 12: Key Dates

Task Date

Questionnaire reviewed and translated 6 Nov

Paper questionnaire training 13 Nov

Tablet training 15 Nov

Pilot 15 Nov

Fieldwork 21 Nov – 24 Dec 2017

Data entry, cleaning, and processing 23 Nov – 15 Jan 2018

A SPECIAL NOTE ON FIELDWORK CHALLENGES

▪ High Rejection Rate: Mindset faced high rejection rate with businesses that were recruited to participate in the study. To mitigate this risk from impacting the project timeline, Mindset proposed a replacement sample approach over and above the sample provided by KINZ.

▪ South Region Challenges: The rejection rate in the South was especially low mainly due to political events that occurred at the time the field team was in the South. Another challenge the team faced while conducting the study in the South, was achieving the required quotas because many of the attainable quotas, whether ISIC or company size quotas, were already achieved or almost closed in other governorates leaving the more challenging quotas yet to be realized.

▪ Larger Companies Quota: Due to more complex internal policies and procedures, the response rate for the larger size companies was much lower than the smaller companies. Mindset’s team needed to follow up continuously up until the fieldwork’s completion date to secure interviews with targeted decision makers. Larger companies also tended to request the study permit and the facilitation letter from MESP/USAID. The 2 most challenging types of large companies for Mindset were banks and insurance companies especially since the timing of the study was towards the end of the fiscal year.

▪ Challenging ISIC Categories: The ISICs listed in Table 13 included businesses that have little to no presence in Jordan, were publicly run or were non-for profit/charity (not in a private sector company).


Table 13: Challenging ISIC Categories

ISIC Division

ISIC Class Description

6 Extraction of crude petroleum and natural gas 7 Mining of metal ores 9 Mining support service activities 19 Manufacture of coke and refined petroleum products 84 Public administration and defense; compulsory social security 88 Social work activities without accommodation 91 Libraries, archives, museums and other cultural activities 99 Activities of extraterritorial organizations and bodies

Furthermore, Mindset was unable to meet the set quota for a few ISIC’s either due to their scarcity or due to very low response rate. These ISIC classifications were re-allocated to the next highest tier of business classifications and then distributed among ISIC classifications that existed in Jordan within that tier. See Table 14 below.

Table 14: Difficult ISIC Categories

Main ISIC Difficult ISIC(s) Re-allocated to

ISIC(s)

Agriculture and farming 3 1

Art, sport and entertainment 91 93

Commerce 81 45, 46, 47

Health and social activities 87 86

Industry 12,15, 19, 21, 26, 27,

29, 30, 32

10, 11, 13, 14, 16, 17, 18, 20, 22, 23, 24, 25,

28, 31

Support Service activities 33, 78, 82 77, 95

Water and waste collection and treatment 37, 38 36

Electricity and gas supply 35 N/A

Finance and insurance 64,65 Partially to 66

Printing and publishing 58, 59, 60 N/A

Professional, Scientific & Technical activities 70, 72, 73, 74, 80 Partially to 96


APPENDIX A: IN-FIELD QUALITY CONTROL – BACK CHECK CHECKLIST

Date: Checker name: Questionnaire no.: Enumerator name: Supervisor name: Questionnaire no.: Respondent no.: Governorate: Area:

Questions Answers Notes

Are you the decision maker in the company?

Name of the company

Number of employees

Number of branches

Do you own or rent the space for your company?

When was the firm established?

How was the firm established?

What was the maximum number of FTE employees that your firm employed during its first year of operations?

Which of the following best describes your motivation for starting your own company? Single Response (the statement that best describes the motivation) 1. I wanted to own my own business 2. I wanted to work in this industry and starting a

business allowed me to do this 3. Starting a business allows me to work close to my

family 4. I wanted to work in the public sector but could not find

a job 5. I wanted to work for a large company but could not

find a job 6. My family wanted me to take on one of the family

businesses 7. I was not allowed to work outside 8. I had no choice, it was the only thing available


9. To generate income for my family

What is the legal status of your business’s registration?

Is your business licensed by the local municipality?

If not, why not?

What is the current ownership structure? invested by Private Domestic Interests (e.g. Jordanian Residents and Jordanian Firms)

What is the current ownership structure? invested by Private Foreign Interests (e.g. Foreign Persons and Foreign Companies)

What is the current ownership structure? invested by Public Interests (e.g. Jordanian Government Institutions)

Among the owners of the firm, are there any females?

If yes, what percentage of the firm is owned by females?

Among the owners of the firm, are there any persons between the ages of 18 and 35?

If yes, what percentage of the firm is owned by persons between the ages of 18 and 35?

What is the highest level of education completed by the top manager?

What is the highest level of education completed by the manager?

Is your business licensed by the local municipality?

Clarified the purpose of the visit and introduced the survey

Respected the respondent and dealt with him/her in a courteous manner

Asked all the questions in a clear manner

Audit results

Action taken

Ad-hoc questions upon the “Data Processing Officer” request


APPENDIX B: IN-FIELD QUALITY CONTROL – QC SUPERVISOR REPORTS

Form 1: Daily Achievement Form

Supervisor achievement form for Private Sector Survey

Supervisor name:

Governorate: Area:

Day: Date:

Enter daily achievement for every enumerator:

Enumerator name Device

no. Questionnaire

no. ISIC Respondent name

Company name

Field of work

Rejection percentage: Total achievement:

Questionnaire no. ISIC no. Notes


Form 2: Enumerators Evaluation Form

Date

Governorate

Accompanied (during interview) / Face to Face (post-interview) ACC / F2F

Supervisor name

Clarified the purpose of the visit and introduced the survey

Respected the respondent and dealt with him/her in a courteous manner

Asked all the questions in a clear manner

Adhered to the questionnaire instructions

Documented open-ended responses accurately

Evaluation of the enumerator by the supervisor Out of 5

Supervisor's notes

Action taken


APPENDIX C: POST-FIELD DATA PROCESSING AND QUALITY CONTROL PROCEDURE CHECKLIST

The below checklist was provided by MESP team. Mindset adopted it since it covers most of its standard procedures followed.

DATA QUALITY/CLEANING CHECKLIST

SIGHT CHECKS 1. Do all SPSS variable labels and value labels in the dataset match the final questionnaire? Do they have

the correct skip patterns? 2. Does the numbering of the response options in the dataset match the numbering of the options in the

final questionnaire (e.g., make sure no items were reverse-coded, etc.)? 3. Does the codebook adhere to the questionnaire?

DATA CLEANING 1. Does the structure (multiple/single response) of all questions in the data match the structure in the

codebook? 2. Are there any missing values that should not be missing? 3. Do any of the questions have filters that were not properly followed or administered? 4. Is there any extraneous data to remove? 5. Have missing values been recoded (e.g. applying a new code to a question: e.g. refused to answer)? 6. Have open coded questions been back-coded so that “other” responses are fit into properly categorized

answers whenever data filters are not affected by these changes? PERFORM LOGIC CHECKS (MARGINALS/CROSSTABS)

1. Were filter questions or skip patterns properly executed (cross-tabulate variables to see if respondents were isolated properly using filters/skip)?

o If minor errors found was there forward cleaning of data? (which may include removing extraneous data of later questions that have filters that were not properly followed or administered in the field;)

2. Are questions that allow for multiple responses (such as first answer/second answer; multiple dichotomies) coded properly or in a way that makes sense?

3. Are there any outliers? CHECK PARA/META DATA

1. Are paradata and metadata variables specified in the technical specifications included in the data file? 2. Do sampling variables in the data file match the pre-fieldwork sampling design?

INTERVIEWER CHECKS 1. Are interviewer and supervisor workloads consistent with the contract/technical specifications for the

project (e.g., number of interviews per interviewer, number of supervisors used)? 2. Is the daily distribution of interviews consistent with the contract and logically feasible for an interviewer

(e.g., number of interviews per day)? 3. Do the dates and locations of the interviews match the stated dates and locations in the fieldwork plan? 4. Is the average time of interview reasonable given the questionnaire length? Can any excessively short

or long interviews be explained satisfactorily? 5. Are there any overlapping interviews by the same interviewer on the same day? 6. Are there any instances of interviewer "teleportation" (e.g., interviewer moves across the country in a

single day, in a way that is impossible)? 7. Are there any interviewers who had the same responses for particular questions across all of his/her

interviews? 8. Are there interviewers with high item non-responses and missing values in the data? 9. Are there any interviews/cases that have the same answers across a series of questions?

DUPLICATES


1. Does the dataset have any duplicate cases (e.g., duplicate IDs)?


APPENDIX D: STUDY’S QUOTAS VS. ACHIEVED

GOVERNORATE TARGETS:

Core Sample

Governorate Targeted Achieved

Ajloun 100 100

Amman 400 532

Aqaba 100 100

Balqa 100 181

Irbid 102 170

Jerash 100 100

Karak 100 101

Ma'an 100 100

Madaba 100 100

Mafraq 100 100

Tafilah 100 100

Zarqa 100 186

Total 1,502 1,870

TOURISM SECTOR TARGETS:

Tourism Sample

Sample Targeted Achieved

Tourism Sample 397 534


COMPANY SIZE TARGETS:

Company Size Targeted Achieved

1 to 4 500 867

5 to 10 315 542

11 to 25 149 234

26 to 50 100 107

51 to 100 100 50

101 to 250 100 44

251 to 500 100 9

501 to 1000 58 16

>1000 43 1

Total 1465 1870

ISIC TARGETS:

ISIC Code Main ISIC Required Achieved

1 Agriculture and farming 12 16

3 Agriculture and farming 12 9

6 Mining and quarrying 9 2




10 Industry 12 25

11 Industry 12 15

12 Industry 12 12

13 Industry 12 18



14 Industry 12 12

15 Industry 12 2

16 Industry 12 19

17 Industry 12 14

18 Industry 12 16

19 Industry 12 8

20 Industry 12 16

21 Industry 12 3

22 Industry 12 18

23 Industry 13 21

24 Industry 12 18

25 Industry 21 34

26 Industry 12 6

27 Industry 12 3

28 Industry 12 15

29 Industry 12 8

30 Industry 8 1

31 Industry 14 26

32 Industry 12 11

33 Support Service activities 12 9

35 Electricity and gas supply 12 18

36 Water and waste collection and treatment 12 24





41 Engineering and contracting 46 58



45 Commerce 60 88

46 Commerce 60 89

47 Commerce 60 114

49 Transportation and shipping 14 32





55 Hospitality and travel 12 39


58 Printing and publishing 12 23



61 Information and communications technology 12 20



64 Finance and insurance 42 14






69 Law firm 41 42

70 Professional, Scientific & Technical activities 60 23





75 Health and social activities 12 12

77 Support Service activates 12 36




81 Commerce 12 7


84 Government 12 0

85 Education 48 91




90 Art, sport and entertainment 12 11



94 NGO & activities of extraterritorial organizations 12 15



95 Support Service activities 22 31


99 NGO & activities of extraterritorial organizations 12 0

Total 1,505 1870


ANNEX F: PRIVATE SECTOR SURVEY QUESTIONNAIRE

USAID | Jordan Economic Growth and Competitiveness Assessment 2017

Private Sector Survey: Questionnaire Version 5.0-II

Nov. 18, 2017


SCREENING QUESTIONS

Question Response Parameters

A1. Governorate o Amman o Zarqa o Balqa o Madaba o Irbid o Mafraq o Jarash o Ajloun o Tafileh o Karak o Maan o Aqaba

A2. District o Add a list of all districts under each municipality

A3. Sub-district Record Sub-district

A4. Address Record GPS coordinates

A5. Number of employees

o 5 to 10 o 11 to 25 o 26 to 50 o 51 to 100 o 101 to 250 o 251 to 500 o 501 to 1000 o More than 1000

A6. ISIC Record ISIC from database

A7. Are you the decision maker in the company? Are you aware of the establishment of the firm, its current operations, and future plans?

o Yes- skip to A8 o No- Thank respondent and end interview. Ask respondent for the decision maker- ask A7i.

A7i. Name and phone number of decision maker

o Record name of decision maker o Record phone number of decision maker

A8. Is your business’s performance or revenues

o Yes o No


COMPANY INFORMATION


B1. When was the firm established?

Answer in month and year ______________ (MM/YY)

B2. How was the firm established?

(Choose One)

o Always private from start up o Privatization of state owned firm o Joint-Venture with foreign partner(s) o Joint-Venture between Public and Private Sectors o Private subsidiary of formerly state-owned firm o Not sure

B3. What was the maximum number of FTE employees that your firm employed during its first year of operations?

(Choose One)

o Sole Proprietorship o 2-9 o 10-24 o 25 + o Do Not Know

B4. Which of the following best describes your motivation for starting your own company?

Single Response (the statement that best describes the motivation)

Open Ended _____________ Enter Verbatim & Post Code (Pre-codes for anticipated responses itemized below)

1. I wanted to own my own business 2. I wanted to work in this industry and starting a business allowed me to do this 3. Starting a business allows me to work close to my family 4. I wanted to work in the public sector but could not find a job 5. I wanted to work for a large company but could not find a job 6. My family wanted me to take on one of the family businesses 7. I was not allowed to work outside 8. I had no choice, it was the only thing available 9. To generate income for my family

B5. What is the legal status of your business’s registration?

o Sole proprietorship o limited liability company o general partnership o limited partnership company o Other o Don't know

affected/ related to tourism?


B6. Is your business licensed by the local municipality?

o Yes o No o Don't know o Refuse to Answer

B6i. If not, why not?

Use Pre-Codes #1 to #7 or enter response and post code.

Multiple response

Open Ended _____________ (enter Verbatim)

1. Licensing Fees 2. I cannot go to the municipality to acquire the necessary license 3. I do not see any benefits 4. Not a requirement for my business 5. Lack of understanding of how and where to register 6. Amount of paperwork and reporting required 7. Registration and licensing complications make it impossible to re 8. Acquiring and renewing a license every year is too much work 9. Takes too much time

B7. What is the current ownership structure?

(List % in each; must total 100)

— Percentage invested by Private Domestic Interests (e.g. Jordanian Residents and Jordanian Firms) — Percentage invested by Private Foreign Interests (e.g. Foreign Persons and Foreign Companies) — Percentage invested by Public Interests (e.g. Jordanian Government Institutions)

B8. Among the owners of the firm, are there any females?

o Yes o No o Not Sure

B8i. If yes, what percentage of the firm is owned by females?

o Less than 5% o Between 5% and 25% o Between 25% and 50% o More than 50%

B9. Among the owners of the firm, are there any persons between the ages of 18 and 35?


B9i. If yes, what percentage of the firm is owned by persons

o Less than 5% o Between 5% and 25% o Between 25% and 50% o More than 50%


between the ages of 18 and 35?

B10. What is the highest level of education completed by the top manager?

(Choose One)

o University Degree(s) (Bachelors or higher) o Technical Degree (Associate / Vocational) o Secondary School o Primary School o None of the above

B11. Do you sign contracts or formal agreements with clients or suppliers?

o Always o Often o Infrequently o Never o Don't know o Refuse to answer

B11i. If yes, who do you go to if these agreements are broken?

o None o Family Dispute Resolution o Local Community or Tribal Court o Informal Meeting o Court System o Mediation or Arbitration (ADR) o Other o Don't Know

B12. Into which of the following markets are you providing products or services?

(Select all that Apply)

o Within my Governorate o Across many cites in Jordan o To other countries in the Middle East and/or North Africa (MENA) Region o To countries in Europe o To countries in North America o To countries in Asia o To countries in Sub-Saharan Africa or South America

B13. Is your business in one location or do you have different locations (i.e. branches, point of sale, point of service)

o Single Location o Multiple Locations

▪ If Multiple, # of Locations __________

B14. Do you own or rent the space for your main business location?

o Own o Rent o Other (specify) _____________

B15. When it comes to sales, does your business have a high or

o Seasonal o Sales are consistent throughout the year o Don’t know (DO NOT READ)


low season (seasonal) or are your sales consistent throughout the year?

B15i. if seasonal, have the challenges associated with seasonality of your business changed over the past 3 years?

o Significantly more challenging o More Challenging o Same o Less Challenging o None of the Above

B16. Does the establishment have an internationally recognized quality certification?

(Choose One)


B16i. if yes, what certification(s)

______________________ Record Verbatim and Post Code Responses

B17. If you are a manufacturing firm, which of the following best describes your operations?

(Choose One)

o Original Brand Manufacturer (OBM) o Original Design Manufacturer (ODM) o Original Equipment Manufacturer (OEM) o Local Manufacturer / Supplier (CMT) o Not Sure o Not Applicable

B18. What percentage of your inputs (in terms of value) come from the following supplying markets?

(List % in each; must total 100)

— Local markets in Jordan — Markets in the Middle East and/or North Africa — Markets in Asia, Europe, North America — Other Supplying Markets

✓ For manufacturing firms, inputs refers to raw materials, semi-processed goods, finished products, or other materials that you transform into products to sell.

✓ For services companies, inputs refers to clientele.


B19. Which of the following best describes your aspirations for the firm?

(Choose One)

o To provide a stable income that supports my family. o To become a well-known supplier in Jordan. o To become a well-recognized supplier in the Middle East & North Africa Region. o To become a well-recognized supplier beyond the MENA Region. o To transform the way my industry provides good and services.

B20. Check all of the following digital platforms that your company has online presence through:


o This firm uses email to communicate with buyers and suppliers o This firm uses social media and/or other online platforms to advertise to potential customers o This firm has a website that provides information to customers and suppliers o This firm sells goods and services online o The firm has its own smart application on the smart devices o Other __ (Explain and Post Code) ______________________________

B21. Check all of the following internal systems and technologies that apply to your firm:


o This firm uses software to manage finances o This firm uses software to manage customer relationships o This firm uses software to manage human resources

Other __ (Explain and Post Code) ______________________________


THE BUSINESS AND SOCIAL ENVIRONMENT


C1. What are the two most important constraints and/or limitations for your business today? (OPEN ENDED) Pre-codes are listed #1-24. Do not read them to the respondent. If the respondent answer matches a pre-code below, write the number for the pre-code. If the answer does not match any of the pre-codes, note as other (24) and record it verbatim.

I. _______________ (Open Ended and POST CODE) II. _______________ (Open Ended and POST CODE)

1. Low profits 2. Lack of market, difficult access to

market 3. Problems with the site: venue too small,

inadequate floor space or layout 4. Lack of financial services 5. No access to loans / No access to

finance 6. Low product, services quality 7. Clients don’t pay or take long time for

them to pay 8. Low motivation, not reliable or low

skilled workers 9. High workers turnover 10. Inadequate, outdated machinery,

frequent malfunction, difficulties getting spare parts, expensive repair services

11. Legal issues 12. Inadequate policies, insufficient

incentives 13. Over-Regulation

14. Lack of Regulation 15. General country situation 16. Issues related to utilities, expensive or

un reliable energy, water, communication services

17. Issues with inputs: difficulties accessing, low input or merchandise quality

18. Lack of time for the business have multiple jobs, have multiple responsibilities

19. Personal issues affecting the business 20. Security concerns, thieves 21. Too much paper work, time consuming

and expensive processes to keep the business formal

22. High taxes and government fees 23. Harassment of authorities local or

national authorities 24. Other (write verbatim in I or II)

C2. Name the two most problematic factors for doing business in your country: (OPEN ENDED) Pre-codes are listed #1-15. Do not read them to the respondent. If the respondent answer matches a pre-code below, write the number for the pre-code. If the answer does not match any of the pre-codes, note as other and record it verbatim.


1. Limited access to financing

2. Inadequately educated/skilled workforce

3. Regional Instability

4. Restrictive Labor Regulations

5. Poor work ethic in the labor force

6. Taxes

7. Foreign currency regulations

8. Policy Instability 9. Inflation


10. Inadequate infrastructure

11. Crime and theft 12. Poor Public Health

13. Inefficient government bureaucracy

14. Corruption 15. No Capacity to Innovate

C3. How do you assess the general state of infrastructure (e.g., transport, communications and energy) in your country?

Among the worst in the world

1 2 3 4 5 6 7 Among the best in the world

C4. How is the quality (extensiveness and condition) of transport infrastructure for the following?

Among the worst in the world


• Roads

• Airports

• Seaports

C5. How efficient are the following services? Among the worst in the world


• Ground Transport (Buses, Taxis)

• Air Transport Services

• Seaport Services


C6. How reliable is the electricity supply? Extremely Unreliable 1 2 3 4 5 6 7 Extremely Reliable

C7. How reliable is the water supply? Extremely Unreliable 1 2 3 4 5 6 7 Extremely Reliable

C8. How efficient are the customs procedures? Extremely inefficient 1 2 3 4 5 6 7 Extremely efficient

C9. How efficient are changes in modes of transport to destination?

Extremely inefficient 1 2 3 4 5 6 7 Extremely efficient

C10. How prevalent is foreign ownership of companies? Extremely Rare 1 2 3 4 5 6 7 Extremely Prevalent

C11. To what extent do taxes reduce the incentive to invest?

To a great extent 1 2 3 4 5 6 7 Not at all

C12. How intense is competition in local markets in your company’s sector?

Not intense at all 1 2 3 4 5 6 7 Very intense


C13. How competitive is the provision of the following services to your firm?

Not at all competitive 1 2 3 4 5 6 7 Extremely Competitive

• Professional Services

• Retail Services

• Transport & Logistics Services

• Financial Services

• Networks (T-com, Internet, Post)

C14. To what extent do companies collaborate in sharing ideas and innovating?

Not at all 1 2 3 4 5 6 7 To a great extent

C15. To what extent are business services available?

Not available 1 2 3 4 5 6 7 Abundantly Available

• Research

• Marketing

• Business Support

• Accounting


C16. To what extent does the threat of terrorism impose costs on business?


C17. To what extent does the large refugee populations impose costs on business?


C18. To what extent can police services be relied upon to enforce law and order?


C19. How efficient is the government in providing public goods and services?

Very In-Efficient 1 2 3 4 5 6 7 Very Efficient

C20. How efficient are the legal and judicial systems for companies in settling disputes?

Extremely In-Efficient 1 2 3 4 5 6 7 Extremely Efficient

C21. To what extent does the government ensure a stable policy environment for doing business?



C22. To what extent do government officials show favoritism to well-connected firms and individuals when deciding upon policies and contracts?


C23. How common is it for companies to make undocumented extra payments or bribes in connection with the following

Never Occurs 1 2 3 4 5 6 7 Very common

• Imports and Exports

• Public Utilities

• Tax Payments

• Awarding Contracts and Licenses

• Obtaining favorable judicial decision


C24. How do you assess the stringency of your country’s environmental regulations?

Very relaxed 1 2 3 4 5 6 7 Among the most Stringent

C25. How do you assess the quality of the natural environment?

Very Poor; Among the worst

1 2 3 4 5 6 7 Among the Most Pristine

C26. How do you assess the enforcement of environmental regulations?

Very Relaxed 1 2 3 4 5 6 7 Among the most Rigorous


C27. What are the top 2 risks that you believe to be of most concern for doing business in your country over the next ten years?

Pre-codes are listed #1-30. Do not read them to the respondent. If the respondent answer matches a pre-code below, write the number for the pre-code. If the answer does not match any of the pre-codes, note as other and record it verbatim.

I. _______________ (Open Ended and POST CODE using Pre-Codes below or other) II. _______________ (Open Ended and POST CODE using Pre-Codes below or other)

1. Asset Speculation 2. Failure of Financial System

3. Natural Catastrophes

4. Biodiversity Loss / Ecosystem Collapse

5. Failure of National Governance

6. Profound Social Instability

7. Information Infrastructure Breakdown.

8. Failure of Urban Planning

9. Spread of Infectious Disease

10. Cyber Attacks 11. Failure of Economic Planning

12. State Collapse or Crisis

13. Data Fraud or Theft 14. Fiscal Crisis 15. Terrorist attacks 16. Deflation 17. Illicit Trade 18. Unemployment or

Underemployment 19. Energy Price Shock 20. Inter-State Conflict 21. Unmanageable Inflation 22. Extreme Weather

Events 23. Large Scale Influx of

Refugees 24. Water Crises

25. Failure of Climate Change Adaptation

26. Manmade Catastrophes (Environ.)

27. Weapons of Mass Destruction

28. Failure of Key Infrastructure

29. Misuse of Technologies

30. Food Crises

COMPANY PERFORMANCE


D1. When it comes to the overall outlook of your sector over the last year, would you say that things are moving in the right direction or in the wrong direction:

o Right Direction ▪ What is the main reason: __________________________________ (RECORD VERBATIM AND POST CODE)

o Wrong Direction ▪ What is the main reason: __________________________________ (RECORD VERBATIM AND POST CODE)

o Don’t Know (DO NOT READ)

D2. When it comes to the sales and profits (performance) of your

o Significantly improved o Somewhat improved o Remained the same


business, over the last five years (ASK SINCE YOUR BUSINESS STARTED IF LESS THAN FIVE YEARS OLD), would you say that your sales and profits have

(Check one)

o Somewhat worsened o Significantly worsened o Refused to Answer (DO NOT READ) o Don’t Know (DO NOT READ)

D3. Thinking of your sales and profit over the last 12 months, would you say that your sales and profits have:

(Check one)

o Significantly improved o Somewhat improved o Remained the same o Somewhat worsened o Significantly worsened o Refused to Answer (DO NOT READ) o Don’t Know (DO NOT READ)

D4. Thinking of your sales and profit over the coming 12 months, would you say that your sales and profits are most likely to:

(Check one)

o Significantly improve o Somewhat improve o Remain the same o Somewhat worsen o Significantly worsen o Refused to Answer (DO NOT READ) o Don’t Know (DO NOT READ)

D5. During the last 12 months would you say that your business allows you to:

o Live well above my living costs o Live comfortably given my living costs o I struggle to live o I am losing money o Don't know o Refuse to Answer

D6. What are the two most I. ________________________ Record Verbatim and Post Code II. ________________________ Record Verbatim and Post Code


important opportunities to improve the performance of your business, today?

(OPEN ENDED, post coded)

o Don’t Know (DO NOT READ)

D7. Are you planning to do any of the following actions related to your business over the next 12 months? (I will read for you some actions that you may be or may be not considering on doing. Please respond yes, no or not sure as it applies to you)



1. Increase the number of workers? 2. Get machinery or equipment? 3. Increase the amount of raw material or merchandise you buy? 4. Buy, remodel or increase the size of the shop or factory? 5. Change the location or buy an additional shop, warehouse, sales point? 6. Include new products, services or markets on you production/trade/service line? 7. Start up a new business? 8. Improve the promotion campaign? 9. Adopt new or improved technologies? 10. Buy e vehicle for the business?


ACCESS TO FINANCE


E1. To what extent do the costs of financial services impede business performance?

Impedes to a great extent 1 2 3 4 5 6 7 Does not impede at all

E2. Does the financial sector provide sufficient range of financial products and services?


E3. Does the financial sector provide sufficient information about the range of financial products and services that are offered?


E4. When it comes to the performance and growth of your business, would you say that access to finance is:

o Very Important o Important o Not at all important o Don’t know (DO NOT READ)

E5. What are the two most important financial needs/ banking services for your business?



(Pre-Codes provided 1-14, DO NOT READ them, to record the answer choose and write the code from the list; if answer does not fit in a code use the 14. other and write the verbatim)

1. Checking Account 2. Savings Account 3. Credit Card 4. Business Loans 5. Fixed Term Savings Certificates 6. ATM and Debit Cards 7. Life, Accident and Other Insurance

8. Mortgage Loan 9. Wire Transfer (Domestic and International) 10. Electronic Payment 11. Phone Transactions 12. Services for Receiving Payments

(Domestic and Foreign) 13. Savings / Credit Products 14. Other (write in verbatim in I or II)

E6. When it comes to the two most important banking needs of your business, what is your overall level of satisfaction?

o Very satisfied o Somewhat satisfied o Neither satisfied nor dissatisfied o Somewhat dissatisfied o Very Dissatisfied

E7. How do you primarily finance your business?



1. The business generates self-sustaining revenues 2. Loan from commercial bank 3. loan from microfinance institution 4. revolving fund 5. loan from family 6. loan from friends 7. Loan from private money lender

8. Group Loan 9. Credit Card 10. Savings 11. Other 12. Don't Know 13. Refuse to Answer

E8. In the last 12 months have you applied for a loan for your enterprise/project or received financial support from an organization or financial institution/bank

o Yes o No o Don't Know o Refuse to Answer


E8i. If no, why not?

Use Pre Codes #1 to #11 or enter response and post code.


1. Didn't know what the options were 2. Didn't understand the process 3. didn't believe my business would be

eligible 4. Loan or financing conditions were too

difficult (rate, size, term, collateral) 5. My religion doesn't allow me to accept a

loan

6. Fear of being unable to pay it back 7. I don't trust financial institutions / banks 8. I don't need to take out a loan 9. The bank or FI didn't have the right options

for my company 10. Don't Know 11. Refuse to Answer 12.

E8ii. if yes, to whom did you most recently apply for a loan

o Bank o Microfinance Institution o International Donor or Donor Funded Project o Government Program o Money Lender o Other o Don't know o Refuse to Answer

E8iii. If yes, were you approved o Yes o No o Don't Know o Refuse to Answer

E8iiia. If not approved, why not?



1. Did not have the required guarantee (guarantors or collateral) 2. Did not have sufficient earnings 3. Business climate too risky at the moment 4. Inadequate credit history 5. The reason for the loan was not sufficient for the financial institution 6. I don't know why not 7. Other 8. Don't know

E8iiib. if you were approved, what was the purpose for the financing?



1. To improve or upgrade products as part of the current business 2. To add new products or business activities 3. To expand operations to another area 4. To buy more resources (materials or goods) 5. To pay for wages for staff 6. Expansion or purchase of property


7. Pay off company debt 8. To pay for children's education 9. To finance the needs of my family 10. To pay off personal debts 11. Other 12. Don't Know

E9. Over the past 3 years would you say that your access to finance has:

o Significantly Less Challenging o Less Challenging o Stayed the Same o More Challenging o Significantly More Challenging o Don’t Know


WORKFORCE AND EMPLOYMENT


F1. Please indicate which trend best describes your firm’s overall employment level the last 3 years

(Check one)

o Large reduction every year- less by more than 30% o Gradual reduction every year- Less by 1%-29% o Gradual increase every year- More by 1-%-29% o Large increase every year- More by more than 30% o Erratic; no clear pattern

F2. Do you expect to hire additional workers over the coming year?

o Yes (If yes, ask for best estimate of how many ___________ (record estimate)) o No o Not Sure o Refused to Answer (DO NOT READ)

F3. Is the company owner(s) also manager(s) in the firm?

o Yes o No

F4. Please indicate which trend best describes your firm’s employment of women the last 3 years:

(Check one)

o Large reduction every year- less by more than 30% o Gradual reduction every year- Less by 1%-29% o Gradual increase every year- More by 1-%-29% o Large increase every year- More by more than 30% o Erratic; no clear pattern o We don’t hire women

F5. What are the main challenges in terms of hiring and retaining women?

o Inadequate education and skills o Poor work ethic o Culture and Tradition o Transportation o Child Care o Recurrent maternity leaves


(Check all that apply) o High Salary Expectations o Dis-Interest in Sector o Other (Explain and Post Code)

F6. Please indicate which trend best describes your firm’s employment of youth (persons 18-35) the last 3 years:

(Check one)

o Large reduction every year- less by more than 30% o Gradual reduction every year- Less by 1%-29% o Gradual increase every year- More by 1-%-29% o Large increase every year- More by more than 30% o Erratic; no clear pattern o We don’t hire youth

F7. What are the main challenges in terms of hiring and retaining youth (Persons 18 to 35)?

(Check all that apply)

o Inadequate education and skills o Poor work ethic o Culture and Tradition o Transportation o Child Care o High Salary Expectations o Dis-Interest in Sector o Other (Explain and Post Code)

F8. Has your firm’s employed foreign labor over the last 3 years:

(Check one)

o Yes o No o Do Not Know

F8i. If yes, are the foreign workers legally hired?


F8ii. If yes, where are most

o Syria o Palestine o Iraq


of your foreign workers from:

(Check one)

o North Africa (i.e. Morocco, Libya) o South Asia (i.e. India, Pakistan, Bangladesh, Sri Lanka) o East Asia (Philippines) o Other ______________ (Enter Verbatim and Post-Code Other Responses)

F9. Would your firm like to have more freedom and flexibility to hire foreign labor?

o Yes o No o Do Not Know o

F9i. If yes, what specific additional freedom or flexibility would be most helpful to you?

(Open Ended & Post Code)

o _____________________________ Enter Verbatim and Post Code)

F10. Excluding yourself, does your business have any Jordanian workers?

o Yes o No o Don't know

F10i. if yes, excluding the owner(s) does your business have any full-time Jordanian

o Yes o No o Don't Know


workers?

F10ii. If yes, what is the main reason for full time Jordanian employees to leave the company (Pick one, and if needed the one who most recently left)?

Open Ended; use pre-codes #1-14

_____________________ (Open Ended and POST CODE)

1. Employee hired by a competitor at abetter rate

2. Employee left to start their ownbusiness

3. Employee moved abroad for workreasons

4. Employee does not see a careerwithin the industry

5. Employee's salary demands are toohigh

6. Working hours were not suitable7. Employee took government or public

service job

8. Family would not allow them to continueworking

9. Social pressures meant they no longerwanted to work here

10. Transportation costs were too high11. Family responsibilities meant they had to

leave12. Personal Reasons13. Other14. Don't Know

F11. How available are high-quality, professional training services?

Not available at all 1 2 3 4 5 6 7 Widely Available

Provided inside your firm

Provided by the Government

Provided by Private Institutions

Provided by development


programs/ agencies

F12. To what extent can companies find people with the skills required to fill their vacancies?


F13. To what extent is pay related to employee productivity?


F14. To what extent do laws and regulations allow flexible hiring and firing of workers?


F15. How would you assess the quality of vocational training?

Very Poor Quality 1 2 3 4 5 6 7 Very High Quality

F16. How restrictive are laws and regulations related to the hiring of foreign labor?

Not at all 1 2 3 4 5 6 7 Very Restrictive


“CONNECTEDNESS”


G1. Does your business collaborate regularly with other businesses?

(Check One)

o Collaborate Extensively o Collaborate Periodically o Collaborate Rarely o No B2B Collaboration o Do Not Know o Refused to Answer

G1i. if yes, with which companies do you collaborate the most?

(May name up to 3)

I. ________________________ Record Verbatim and Post Code II. ________________________ Record Verbatim and Post Code

III. ________________________ Record Verbatim and Post Code

G2. Which company in Jordan do you most admire, and why?

(May name up to 3)

➢ (which)__________________________________ Record Verbatim and Post Code ➢ (why)___________________________________ Record Verbatim and Post Code

G3. Does your business work with any trade associations or other organized interest groups?

(Check one)

o Yes o No o Do Not Know o Refused to Answer

G3i. If yes, which organizations or interest groups do you find to be the most helpful or knowledgeable?

(May name up to 3)




G4. Does your business work with, or receive services from, any government agencies or institutions?

(Check one)


G4i. If yes, which government agencies or institutions do you find to be the most effective? knowledgeable?

(May name up to 3)



G5. Has your business received support or assistance from any international organizations in Jordan?

(Check One)


G5i. If yes, please name the organization(s) that you have received support or assistance.

(May name up to 5)


III. ________________________ Record Verbatim and Post Code IV. ________________________ Record Verbatim and Post Code V. ________________________ Record Verbatim and Post Code

G5ii. If yes, did you find the support or assistance



helpful or valuable?

Refused to Answer

G5iii. If yes in G5iii, Kindly explain what aspects you found to be particularly valuable or useful?

(Limit to 2 Examples)

I. ___________________________________________ Record Verbatim and Post Code II. ___________________________________________ Record Verbatim and Post Code

G5iv. If no in G5iii, Kindly explain what aspects you found not to be particularly valuable or useful?

(Limit to 2 Examples)

I. __________________________________________ Record Verbatim and Post Code II. __________________________________________ Record Verbatim and Post Code


ANNEX G: ASSESSMENT STATEMENT OF WORK

Economic Growth and Competitiveness Assessment Statement of Work (SOW)

INTRODUCTION

The USAID/Jordan Economic Development and Energy (EDE) team requested USAID Monitoring and Evaluation Support Project (MESP) to undertake a broad-spectrum Economic Growth and Competitiveness Assessment. As part of this assessment, the MESP team was also requested to identify the interventions and approaches that have had a positive impact on competitiveness and economic growth in Jordan, whether implemented as part of the USAID EDE portfolio or implemented by other actors, such as other donors and/or the GoJ (GoJ).

PURPOSE OF THE ASSESSMENT

This assessment will serve as a follow-up to the 2012 Jordan Economic Growth Assessment to critically examine Jordan’s economic growth trajectory and competitiveness, as well as major challenges and opportunities to inform USAID’s understanding of economic growth and employment strategies for the country.

Specifically, the assessment will examine and present changes, opportunities, challenges, lessons learned, donor mapping and specific recommendations at two levels:

1. Sectors of the Jordanian Economy (those examined by the 2012 Assessment; see p. 3) 2. Jordan’s macroeconomic situation



In addressing the stated purpose, the assessment will explicitly answer the below questions.

ECONOMIC GROWTH AND COMPETITIVENESS ASSESSMENT QUESTIONS

1. How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

a. What are the key growth (trend analysis in terms of revenue generation, employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan, particularly over the next 3-5 years?

2. How has the macroeconomic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment and MSME growth) changed since the 2012 Economic Growth Assessment?

a. What are the effects of these changes, both at the firm and at the national level?

3. What are the priorities within the Private Sector and key stakeholders (GoJ, subject matter experts, donors etc.), as they relate to competitiveness and economic growth? Why?


4. What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders (subject matter experts, GoJ, donors etc.), when it comes to the following key areas:

a. Business Enabling Environment b. Investment Promotion and Facilitation c. Exports Promotion and Facilitation d. Employment e. Micro, Small and Medium Enterprise (MSME) Growth

5. What types of interventions and approaches are being implemented (across all donors, GoJ) to

support economic growth and competitiveness in Jordan? a. What have been some key lessons learned by key stakeholders (donors, implementers,

and GoJ etc.) working on supporting economic growth and competitiveness in Jordan?

6. To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness?

a. Which of these interventions and approaches (for example cluster/ecosystem approach versus a sector-focused approach) are more effective when it comes to promoting economic growth and competitiveness? Why?

b. Which of these interventions and approaches are more likely to sustain without additional support? Why?

ASSESSMENT DESIGN AND METHODOLOGY

Below is a summary of the key phases of the design and methodology for the economic growth and competitiveness assessment. There will be a total of three phases starting with a desk review, followed by data collection, and analysis phases.

PHASE 1: DESK REVIEW

Assessment: Below are the key steps and considerations for the assessment desk review phase.

● Desk review of major indices capturing Jordan’s economic state, (i.e. World Economic Forum’s Competitiveness Index/Report, Jordan Economic growth Plan 2018-2022, Jordan Strategy Forum reports, Doing Business in Jordan Report, Ease of Doing Business Report, etc.).

● Summary review and analysis of changes in the situation and key growth sectors since the 2012

Economic Growth Assessment, specifically with regards to: 1) Percentage of GDP 2) Export and investment 3) Employment 4) Other criteria and considerations (TBD)

● Summary review and analysis of Jordan specific policy and academic data and literature in the

following macroeconomic situation focus areas/themes of interest: 1) Business Enabling Environment 2) Investment Promotion and Facilitation 3) Exports Promotion and Facilitation 4) Employment 5) MSME Growth

The above summary reviews and analyses will also incorporate relevant USAID activity documents (for example JCP, LENs etc.) and studies and data generated by these activities, for example the Job Creation Study and the MSE survey. The summary reviews will inform the


identification of high growth and priority sectors for USAID, development of the Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis (described Phase 3: Analysis) for each theme of interest, and lessons learned. Additionally, the summary reviews and analyses under the assessment will generate a list of key questions (by theme) and respondents for the survey of the Private Sector and GoJ.

● Map of Donor Activities—review existing documentation to generate a preliminary list of all the current donor and GoJ activities in Jordan related to select economic growth sectors (high growth or other critical sectors) and the macroeconomic focus areas listed above.

PHASE 2: DATA COLLECTION

The economic growth and competitiveness assessment will have two primary sets of respondents: Private Sector and relevant GoJ stakeholders. In addition to these respondents, where appropriate, other key stakeholders (Donors and beneficiaries, including USAID) and subject matter experts will also be interviewed. Where relevant, the beneficiaries and key informants of relevant USAID activities should also be systematically covered during the data collection phase.

● Survey of the Private Sector: The purpose of this research will be to gauge the perspectives and priorities of the private sector. This will be done through qualitative and quantitative research. As part of this data collection, where relevant, interviews will also be conducted with private sector beneficiaries of USAID and other donors.

o Qualitative: The survey of the private sector will start with qualitative in-depth discussions with members of the private sector. The qualitative research will cover respondents across sectors, including some private sector key informants. The qualitative research will be used to gauge the private sector perspectives, as well as to finalize the quantitative survey instrument to be used for the representative survey of the private sector.

o Quantitative: The quantitative research will involve a representative survey (in terms of location, sector, and firm size) of the private sector. The below table lists the sectors examined in the USAID 2012 assessment and will potentially be covered as part of the quantitative survey of the private sector.

Sectors Examined in the USAID 2012 Assessment

Clean Energy Handicrafts

Business and Professional Services Banking and Finance

ICT Creative Industries

Architecture/ Engineering Medical Services

Tourism Other Manufacturing

Pharmaceuticals Construction

Transportation Services Apparel & Textiles

Fertilizers & Raw Materials Agriculture & Food Processing


Others

● Survey of GoJ

o This data collection process will involve qualitative interviews with GoJ respondents to gauge their priorities, as well as to understand the priorities and challenges from their perspectives.

● Key Informant Interviews (Donor Mapping) o This data collection process will involve qualitative interviews with subject matter

experts, USAID, and GoJ and other donors actively supporting economic growth and competitiveness in Jordan. To the extent feasible and meaningful, questions aimed at donor mapping may be integrated into the above surveys.

Phase 3: Analysis

Assessment: The analysis from the desk review and primary data collection will generate a SWOT analysis of the Jordanian economy, specifically as it relates to the economic growth and competitiveness. The analysis will also map out donor activities, identify a series of top priority areas,28 and lessons learned that would potentially lead to the achievement of USAID development objectives.

The assessment will also identify more effective and relevant interventions and approaches that have proven effective in promoting economic growth and competitiveness. Furthermore, the analysis will capture lessons learned for future programming purposes. The assessment design should allow for more in-depth analysis on the effectiveness, relevance and lessons learned for current USAID activities versus those activities funded by other donors and GOJ.

Analyses from the assessment will inform and lead to specific recommendations to guide future USAID programming to support the achievement of “USAID Development Objective 1: Broad-based, inclusive economic development accelerated”, particularly over the next 3-5 years.

ASSESSMENT TEAM COMPOSITION

In order to meet the requirements of team composition, and to ensure data quality, the following is suggested for team composition:

● Team Leader (Evaluation/Assessment, Economic Growth, USAID Experience) ● Subject Matter Expert - (Economic Growth, Competitiveness, Regional Experience) ● Evaluation/Assessment Specialist (Evaluation/Assessment, USAID, Economic Growth

Experience) ● Private Sector Survey Specialist ● Gender and Social Inclusion (GESI) Specialist ● Data Analyst (Quantitative, Qualitative and Secondary Data Integration and Analysis Experience)

The MESP Senior M&E Specialist, M&E Specialists and Evaluation Assistant will also support the assessment team.

28 Criteria to select “high growth” sectors will be finalized in discussion with USAID during the design phase of the assessment.


PERFORMANCE PERIOD The assessment will be conducted from July to January 2017, with data collection conducted from September to December, and final report submitted by the end of January 2018. Logistics for the assessment will be provided by MESP.

DELIVERABLES AND TIMELINE

Economic Growth Competitiveness Assessment:

Deliverables/Task Timeframe

MESP finalize SOW July

MESP begins desk review, develops work plan August

MESP consultation with USAID EDE team (check-in and finalize high growth sector criteria) September

MESP develop assessment design/methodology and tools, finalize work plan and submit assessment design report to EDE September

Field Work October-November

Debriefing presentation for USAID December

MESP submit draft report

December

MESP submit final assessment report January


ANNEX H: ASSESSMENT DESIGN WITH DATA COLLECTION INSTRUMENTS

ASSESSMENT DESIGN REPORT

ECONOMIC GROWTH AND COMPETITIVENESS ASSESSMENT REPORT October 2017 USAID/Jordan Monitoring & Evaluation Support Project (MESP)

Contracted Under AID-278-C-13-00009

Disclaimer: The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.


Economic Growth and Competitiveness Assessment

INTRODUCTION

Purpose The USAID/Jordan Economic Development and Energy (EDE) team requested the USAID Monitoring and Evaluation Support Project (MESP) to undertake a broad-spectrum Economic Growth and Competitiveness Assessment. As part of this assessment, the MESP team was also requested to identify the interventions and approaches that have had a positive impact on competitiveness and economic growth in Jordan, whether implemented as part of the USAID EDE portfolio or implemented by other actors, such as other donors and/or the GoJ (GoJ).

This assessment will serve as a follow-up to the 2012 Jordan Economic Growth Assessment to critically examine Jordan’s economic growth trajectory and competitiveness, as well as major challenges and opportunities to inform USAID’s understanding of economic growth and employment strategies for the country. Specifically, the assessment will examine and present changes, opportunities, challenges, lessons learned, donor mapping and specific recommendations at two levels:

1. Sectors of the Jordanian Economy (those examined by the 2012 Assessment)

2. Jordan’s macroeconomic situation


Assessment Questions In addressing the stated purpose, the assessment will explicitly answer the below questions.

Economic Growth and Competitiveness Assessment Questions

1. How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

a. What are the key growth (trend analysis in terms of revenue generation, employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan, particularly over the next 3-5 years?

2. How has the macroeconomic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment and MSME growth) changed since the 2012 Economic Growth Assessment?

a. What are the effects of these changes, both at the firm and at the national level?


4. What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders (subject matter experts, GoJ, donors etc.), when it comes to the following key areas:

a) Business Enabling Environment

b) Investment Promotion and Facilitation

c) Exports Promotion and Facilitation

d) Employment

e) Micro, Small and Medium Enterprise (MSME) Growth


5. What types of interventions and approaches are being implemented (across all donors, GoJ) to support economic growth and competitiveness in Jordan?

a) What have been some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan?

6. To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness?

a) a. Which of these interventions and approaches (for example cluster/ecosystem approach versus a sector-focused approach) are more effective when it comes to promoting economic growth and competitiveness? Why?

b) b. Which of these interventions and approaches are more likely to sustain without additional support? Why?

Basic Concepts The team is approaching the assessment with several fundamental concepts that are key for orienting the Assessment:

● Economic Growth ● Business Enabling Environment (BEE) ● Competitiveness ● Gender Equality ● Social Inclusion ● Informal Economy

These definitions will provide context for the team’s presentation of its findings, conclusions, and recommendations. The next sections of the design are a discussion of the evaluation team’s interpretation of and approach to answering the assessment questions.

INTERPRETATION OF ASSESSMENT QUESTIONS

The scope of work for the Economic Growth and Competitiveness Assessment comprises six questions that are designed to capture the data and information that USAID/Jordan needs to formulate elements of the next Country Development Cooperation Strategy (CDCS).

The six questions are interrelated. Each question is designed to build on the body of information developed through answering preceding questions, even while all can be addressed simultaneously. The six questions are best seen as three groups of two questions:

● The first group (Questions 1 and 2) represent the situational analysis; ● The second group (Questions 3 and 4) focus on understanding the implications of the

situation/trends from various stakeholder points of view, and ● The third group (Questions 5 and 6) focuses on past, current and future programmatic responses

by the donor community, including USAID/Jordan, to address the situation and implication (See Figure 1 at the end of this section for an illustration of the relationship)


Situational Analysis (Questions 1 and 2) Questions 1 and 2 focus on developing a current snapshot and trend analysis of Jordan’s economic growth and competitiveness. The specific terms that are used in the questions relate back to the overall objectives.

The focus of Question 1 is on sectors. Sectors are the building blocks of output on the supply-side of the GDP equation, and the term ‘Economic Growth’ refers to a year-to-year change in GDP. In other words, Economic Growth is nothing more than a composite picture of sectoral growth from one period to the next. Indeed, the most effective way to understand how aggregate output is changing is to develop a clear understanding of the components of aggregate output (i.e. sectors) and how they are changing.

While Question 1 provides for an effective treatment of Economic Growth, Question 2 addresses the other key dimension – of Business Enabling Environment and Competitiveness. And just as overall economic growth is a function of several components (sectors) growth, so is enabling environment and competitiveness, where the former is a sub-set of the latter. The World Economic Forum (WEF) defines competitiveness as “the set of institutions, policies and factors that determine the level of productivity of a country.” These institutions, policies and factors are often collectively referred to as ‘determinants’ or ‘pillars’, of which the WEF assigns labels to twelve of them (see Annex VI).

While Question 2 does not specifically use the terms ‘determinants’ or ’pillars of competitiveness’, we assume that it is implied as the question references such terms as “macroeconomic environment, business enabling environment, investment and export promotion and facilitation, employment and MSME growth,” which represent important subsets of the determinants of competitiveness. All of the determinants of competitiveness outlined in the WEF framework are deemed to be relevant for the purposes of conducting this assessment, but we will pay particular attention to those areas that are specifically listed in Question 2.

Understanding the Implications (Questions 3 and 4)

While Questions 1 and 2 together are designed to portray the economy’s output, growth, enabling environment and level of competitiveness, Questions 3 and 4 are designed to clarify how the present status and trends are impacting performance, decision-making and strategy among different stakeholder groups. The main groups specified are the private sector, GoJ, donors and subject matter experts. Some stakeholders, depending on their perspective, may be experiencing the findings from Questions 1 and 2 as challenges, while others may see them as opportunities. As such, it is important to determine how the situation and trends are affecting each stakeholder grouping differently. In cases where there are several challenges, or multiple opportunities, it is important to differentiate these by intensity through a process of prioritization. In other words, which of these challenges are the most significant, and which are the

Question 1 How have the sectors in the Jordanian economy changed (trend analysis in terms of percentage of GDP, export and investment, employment etc.) since the 2012 economic growth assessment?

What are the key growth (trend analysis in terms of revenue generation, employment, exports, percentage of GDP, USAID priorities etc.) sectors in Jordan, particularly over the next 3-5 years?

Question 2 How has the macro-economic environment (in terms of business enabling environment, investment and export promotion and facilitation, employment and MSME growth) changed since the 2012 Economic Growth Assessment?

What are the effects of these changes, both at the firm and at the national level?


least? Similarly, which opportunities, which do the stakeholders think have the most potential, and which have the least?

Within this framework, Question 3 of the SOW focuses on clarifying priorities, while Question 4 focuses on identifying the specific challenges and opportunities that need to be prioritized. In sum, Questions 3 and 4 are closely related to the situational assessment of Jordan’s economic growth and competitiveness in Questions 1 and 2. They help develop a clearer understanding of how the different trends and issues are impacting performance, decision-making and strategy among key stakeholder groups. The result will be a prioritized list of challenges and opportunities from a variety of important points of view.

The Programmatic Response (Question 5 and 6) Questions 5 and 6 follow upon the prioritized lists from Questions 3 and 4 to identify the potential areas for intervention, and build in additional layers of information that are necessary to develop an informed and optimized response strategy.

Question 5 provides the information necessary to conceptualize a map or matrix of programs, policy changes, and other “responses” by USAID, other donors, and the GoJ. The map or matrix serves two key purposes: First, it enables the identification of areas where there are priority challenges or opportunities that have been expressed by key stakeholders without sufficient resources either already in place or planned in the near future. Second, it facilitates learning among collaborating parties to optimize allocation and impact.

Question 6 is similar to Question 5, while more intensively investigating the EDE program to assess effectiveness and sustainability on both a comparative and absolute level. The objective is to provide further clarification around appropriate approaches to maximize impact through design and allocation.

In sum, the questions are closely interrelated. The answers provide insights for understanding situation and context, stakeholder priorities, challenges to and opportunities for economic growth and competitiveness and, working in concert, they assist in identifying future program priorities.

Figure 1: Relationship between Questions & Question Groups

Question 3 What are the priorities within the Private Sector and key stakeholders (GoJ, subject matter experts, donors etc.) as they relate to competitiveness and economic growth? Why?

Question 4 What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders (subject matter experts, GoJ, donors etc.), when it comes to the following key areas:

Business Enabling Environment Investment Promotion and Facilitation Exports Promotion and Facilitation Employment Micro, Small and Medium Enterprise Growth

Question 5 What types of interventions and approaches are being implemented (across all donors, GoJ) to support economic growth and competitiveness in Jordan? What have been some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan? Question 6 To what extent have approaches implemented within the EDE portfolio been effective or beneficial in promoting economic growth and competitiveness? Which of these interventions and approaches (for example cluster/ecosystem approach versus a sector-focused approach) are more effective when it comes to promoting economic growth and competitiveness? Why? Which of these interventions and approaches are more likely to sustain without additional support?


With the core components of the Assessment articulated, the next stage will be the Assessment’s design, focusing on economic growth and sector competitiveness, private sector perspectives, the EDE portfolio, and gender and social inclusion. (See below for the team’s Workplan). The Assessment’s ultimate objective is to arrive at findings, conclusions, and recommendations (FCR) pertinent for USAID’s Jordan economic growth and competitiveness strategy for the next planning period.


The team will use a set of interrelated methodologies pertinent to answering each of the assessment questions. Annex IV details the team’s approach to data collection (“Getting to Answers”).

The sections below (Groups 1, 2, and 3) relate to Figure 1 above, which divides the six questions into three interrelated categories.

Group 1: The Situational Assessment In order to develop a clear understanding of Jordan’s current level of growth and competitiveness, key trends that have already unfolded, and new patterns that are now emerging, we will develop a situational analysis that includes official statistical data, the standard, periodic indices and reports, and other relevant research and literature prepared by national institutions, multinational organizations and subject matter experts. The idea is to prepare a situational analysis largely on the basis of secondary data that can be used appropriately across all other dimensions of the overall assessment.

While we recognize that practically speaking economic growth and competitiveness are inextricably linked, from a methodological point of view we will look at each of them independently, and then put them together.

ECONOMIC GROWTH (SECTORS) Jordan is a small open economy. The structure of the country’s GDP exhibits a clear domination of the services sector over the other industrial and agriculture sectors. However, the economic foundation of analyzing growth, competitiveness, and development within any economy requires a full review and analysis of all sectors.

This team’s review and analysis will include effective use of statistical data and applicable research and literature. We will start by identifying and obtaining all necessary statistical data that need to be

Group 1: Situation

(Questions 1 & 2)

Productive Capacity (Factors)

Determinants of Competitiveness

(WEF Pillars)

Economic Growth

/ Output (Sectors)

Group 2: Implications

(Questions 3 & 4)

Dimensions (Challenges,

Opportunities and Priorities)

Points of View

(Private Sector, GoJ, Donors, Experts)

Group 3: Response

(Questions 5 & 6)

Current and Planned

Programs (Donor Matrix)

Opportunities (Gap Analysis)

Optional Approaches (EDE Assessment)


collected/collated from official sources such as: The Department of Statistics (DOS); the Ministry of Planning and International Cooperation (MOPIC); the Ministry of Finance (MOF); the General Budget Department (GBD); and the Central Bank of Jordan (CBJ). We will also identify the data supply agencies and institutions with whom we should have technical discussions around data quality and usage, and to obtain additional and unpublished data that can enhance our research and findings.

The team will also conduct a full literature review on the macroeconomic structure of Jordanian GDP from both a demand-side and a supply-side point of view, that is, the final demand components and the sectorial contributions to GDP. For the demand side, the data will come from official sources (e.g., DOS, MOF, and CBJ) for investment and consumption, divided between the private and public sectors, as well as exports minus imports. The data for the supply-side also comes from official sources, analyzed by the contribution of each of the economic sectors to overall GNP, including each sector’s contributions to employment, trade and use of investment. The analysis will focus impact of each sector on economic growth, mainly since 2012. By doing so we should expect to understand the actual behavioral influence of the final demand (expenditure) component and supply (consumption) component for each economic sector and subsector on the GDP.

This study will work with available data to determine the relevant impact of each sector/subsector on value added, on employment (with special attention to youth and self-employment), on social inclusion (with special attention to gender and refugees), and for its contribution to GDP. Finally, the process will lead to a gap analysis, to postulations on “what needs to be done,” and to the overall implications for public policy.

We will use the International Standardized Industrial Classification system (ISIC) as the organizing framework for our analysis of sectors, this procedure will enable USAID/Jordan to use comparable data and reports to update the assessment, track unfolding trends, and continually validate key findings and recommendations after this exercise is completed. To the extent possible, we will develop a “crosswalk” that highlights how to move from ISIC category definitions to the sectoral terminology sometimes used in development contexts.

COMPETITIVENESS Complementing the situational assessment of the economy and the sectoral growth will be our situational assessment of competitiveness focused on specific determinants. As stated earlier, the World Economic Forum (WEF) defines competitiveness as “the set of institutions, policies and factors that determine the level of productivity of a country.” The WEF competitiveness index framework breaks the universe of determinants down into twelve pillars across three categories. (See Annex VI). While the full set of WEF indicators will be used, in some cases we will examine other efforts as complementary or even primary sources of information.

The competitiveness assessment will also involve measuring, analyzing and projecting the main growth-related variables into the future. These would include productive capacity, rate or level of capacity utilization, national absorptive capacity, fiscal space, domestic revenue enhancement, recurrent expenditure rationalization, productivity, employment generation, income distribution, and needs for national capacity building. Numerically articulating the above variables in full will depend on the availability of appropriate statistical data, and the projections perforce will be estimates.

Concerning improving and creating the right enabling business environment in Jordan, we are planning to examine:


1. How to trace the evolving paths of each of the above listed parameters on the right environment of doing business (DB) index and the comparative ranking scores,

2. How to go about enhancing the compatibility of these indicators with an international standard and hence upgrading Jordan’s score in the international indexation ranking,

3. How to complete and support these indicators to move as quickly as possible to reach the targeted frontier, and

4. What are the policy, regulatory, capacity and institutional enhancement that should be in place to move these rankings upward?

While the WEF framework includes some relevant summary indicators for the business environment, it is not as thorough as the World Bank’s Doing Business framework. The number of countries in each study is different, which means that the absolute rankings that a country receives for business environment indicators in each study would be different. As such, we will be using the World Bank Doing Business indicators as principal data inputs for assessing this dimension of competitiveness.

The objective is to identify ways to enhance Jordan’s position in creating a more enabling business environment within the international countries ranking, achieving single digit (or small two digits) scoring level improvement. The above methodological and analytical process would be approached both quantitatively and qualitatively.

In sum, the team will try to delineate the areas within the Jordanian competitiveness setting that, apparently and actually, correspond to perceived needs, aspirations for change, and realistic policy options --- emphasizing those that could effectively utilize donor support and technical assistance. The goal is to forge a possible path to accelerated economic growth and improved competitiveness.

Outlined in Table 1 is an outline of the data collection and analysis approaches the team will utilize for answering questions 1 and 2. A complete GTA Matrix can be found in Annex IV.


Table 1: Outline of Data Collection and Analysis for Group 1 Questions

Evaluation

Questions

Methods for Data Collection,

e.g., Records, Structured Observation, Key Informant Interviews, Mini-Survey

Data Analysis

Methods

Data Source(s) Method

1. How have the sectors in the Jordanian economy changed since the 2012 economic growth assessment?

● Relevant GoJ Ministries ● Sector associations and

Chambers ● Private sector survey ● Global market forecasts

and analysis ● GoJ Reports

● Document review ● In depth interviews ● Private sector survey

● Situational Analysis ● Trend analysis ● Content analysis ● GAP analysis ● Forecasting ● Gender and social

inclusion analysis

2. How has the macroeconomic environment changed since the 2012 Economic Growth Assessment?

● All sources from Q1 ● WB/IFC Doing

Business ● WEF Competitiveness

Report ● USAID JCP and

FRPRM ● Customs ● Multilateral Institutions

● Document review ● In depth interviews ● Private sector survey ● ISIC Classification ● WEF Pillars of

Competitiveness

● Situational Analysis ● Trend analysis ● Content analysis ● GAP analysis ● Forecasting/outlook ● Cross-tabulations ease

of doing business ● Comparative analysis ● Gender and social

inclusion analysis

Group 2: Assessing the Implications The second part of the methodology focuses on clarifying how the present status and trends in Jordan’s economic growth and competitiveness are impacting performance, decision-making and strategy among different stakeholder groups. The main points of view requiring data collection are the private sector, the GoJ, donors and subject matter experts.

DEFINE THE PRIVATE SECTOR SEGMENTATION APPROACH The private sector comprises a broad range of businesses interests. When assessing competitiveness, it is useful to segment private sector interests by enterprise size, purpose, and geography. When possible, segments should also include ownership and “sophistication” (defined below); and then analyze these segments across different sectors and geographies.


KINZ is the most comprehensive, accurate and current data source for business intelligence in Jordan. Through its information sharing arrangement with Jordan’s Company Control Department (CCD) KINZ represents a “cleaned” extract of the GoJ’s business registration system. In addition to being used extensively by the Private Sector for marketing, sales and customer relationship management purposes across Jordan, KINZ is also used by the Ministry of Industry and Trade for official government business. The team will review the KINZ database as an important step toward selecting a sample of Jordanian firms for the private sector survey.

Table 1 of Annex II displays the KINZ database by sector and number of firms. The largest portion (40%) is in commerce, followed by health and hospitality. Electricity, mining and water are last.

Table 2 organizes the data by governorate location, with Amman at the top of the list (73%) followed by Irbid and Zarqa. Location, divided by region in Table 3, shows that firms in the north outnumbers those in the south. Other KINZ tables present the distribution of Jordanian firms by size, with size measured by the number of full-time employees (FTEs).

Drawing on the tables in Annex II, the team will calculate the required sample sizes for the different segments in order to ensure that statistically significant inferences can be drawn to effectively represent the different segments. For sampling purposes, we will define statistical significance as having a 95% confidence level and a margin of error of plus or minus 5%. While this approach is necessary for determining whether certain segments are experiencing aspects of the business environment differently, it means that the segment-level samples will not be proportional to the population. To mitigate this variation, wherever the analysis requires aggregate inferences to be drawn across several segments that have been analyzed individually, we will weigh the proportion of each segment’s contribution to an aggregate statistic by its size relative to the aggregate population.

Rather than distort the survey, the team determined it was more effective to incorporate the perspective of informal businesses into the overall assessment through other means, including:

• Having qualitative discussions with groups of non-registered businesses.

• Review and incorporation of the existing LENS survey data of non-registered businesses.

• Isolation of survey data for groups of registered businesses that are similar to groups of non-

The only clear shortcoming associated with using KINZ is the fact that it does not include informal businesses. The assessment team did explore ways to mitigate this shortcoming by evaluating the possibility of sampling from the LENS project database. But the team ultimately determined that there were several drawbacks to using this approach that undermine its overall utility for this particular application, including:

• The LENS data includes businesses from only the subset of Governorates where the LENS project was active; using LENS to establish sampling frames and to draw our samples would therefore introduce bias into inferences drawn about the rest of the country.

• There is no proper way to proportionally incorporate informal businesses into the quota sampling approach that is being used for this survey as the population of informal businesses is unknown; i.e.


From the private sector survey, the team will seek information not available from the KINZ data. Questions will be inserted pertaining to ownership, source of investment, sophistication and purpose. The team will work with Mindset, MESP’s Amman-based the data collection partner, to develop the size of the sample and conduct the survey.

● A first cut of the survey results will focus on firm ownership, distinguishing between interests that were established or capitalized through Foreign Direct Investment (FDI) and those which have relied exclusively on domestic inputs and investment.

● A second cut will focus on sophistication, distinguishing between those interests that are engaged in Global Value Chains (GVCs) and those that are serving primarily domestic and/or regional markets.

● The third cut will differentiate by size. The Ministry of Industry and Trade distinguishes between Micro (1-9 FTEs), Small (10-49 FTEs), Medium (50 to 249 FTEs) and Large (250 and higher FTEs). These size parameters correspond to the firm size statistics also utilized by the Jordan Chamber of Industry. Employment by gender will be incorporated into the size categories.

● A fourth cut will differentiate purpose, separating companies that have a growth focus (innovation driven) from those that have a livelihood focus (efficiency driven). The reason for these different segments is that they identify groups of interests that are typically affected in different ways by different dimensions of competitiveness, and they typically have different needs and priorities to reach their optimal operating conditions. In each case, the team will use sampling approaches that result in statistically significant observations.

We will use this overall segmentation scheme to analyze the private sector’s challenges, opportunities and priorities across sectors and regions. The scheme for analyzing sectors will follow the ISIC classification described for Question 1, while the regional classifications will replicate the footprint established by the portfolio of USAID/Jordan EDE activities.

DEFINE THE TOPICS AND QUESTIONS The topics and specific questions that are selected will determine what data get collected. Given the nature of this assessment, the questions will focus on identifying challenges, opportunities and priorities among the array of factors that determine competitiveness. To the extent possible, questions will be selected from existing survey instruments. The following surveys will be examined to evaluate the relevance of including their questions in the assessment.

1. The WB Enterprise Survey (Establishment Survey) 2. The WEF Executive Opinion Survey 3. The USAID/Jordan LENS Survey, and 4. The USAID/Jordan Employment Survey.

The content of these existing survey instruments will orient the team’s selection of a final set of questions for the quantitative survey of the private sector, and for the qualitative key informant interviews (See Annexes III and IV).

Devising questions for topics of interest that were not covered in existing surveys serves two purposes. First, it enables the assessment team to capture a new “time stamp” for the respective existing survey thus providing additional information on trend. If we were to simply develop an entirely new survey, there would be no past time period against which to compare our results. Second, developing effective surveys


can be a very complicated and time-consuming process involving multiple rounds of testing, the development of interview guides, devising effective calculation methodologies, etc. By using an existing survey as the foundation, much of the time and effort required will have already been done, which allows the team to focus more resources on obtaining required data from more respondents.

DEVELOP THE DATA COLLECTION INSTRUMENTS

There are at least three instruments that need to be developed: ● A formal survey instrument to be administered to companies by the MESP data collection

partner, ● A questionnaire to be administered by the assessment team to key informants selected for

interviews or focus group discussions, and ● Focus groups with beneficiaries

Once the survey instrument has been finalized internally, it will be passed on to Mindset to test and refine as appropriate, prepare its administration, and train survey enumerators. In preparing for the face-to-face interviews, we will develop the qualitative questions to mirror the quantitative survey, but define the questions in a way that is more exploratory than definitive. The aim is to add context and texture to the information gathered from the sample survey, as well as gauge the opinion of key business, economic and public policy leaders with degrees on influence on forging the country’s future. A final step in this part of the methodology will be reviewing the sets of questions with each of the subject matter experts within the assessment team to incorporate additional questions, as necessary, to ensure the GoJ, private sector, US government, professional association, and donor data collection effort provides sufficient treatment of the six questions.

COLLECT AND ANALYZE THE DATA

The first step is to finalize the list of survey respondents and face-to-face interviews. This will involve updating the sampling strategy defined in step one, and reviewing the status of the interview schedule. The GoJ interviews will occur in ministries and agencies like MOPIC, MIT, CBJ, and MOF. Donors contacted will include the World Bank, the Danish, Norwegian, and Japanese governments, and the ILO. Key professional and business associations are the Jordan Chapter of Industry and the Jordan Tourism Board. USAID interviews will occur with the technical specialists for the EDE components, as will those with Implementing Partners. NGO and subject matter expertise will come from contacts with CARE, OXFAM, and the Jordanian National Commission for Women. Business executives from a range of enterprise are expected to provide incisive observations on growth and competitiveness. A list of planned interview with institutional stakeholders is in Annex V.

The team will keep USAID apprised as required concerning the questions for and names of the key contacts and informants. The findings and recommendations from data collection will be processed and updated in tandem with the informant interviews. Separate findings and recommendations will be maintained for each of the different points of view and summarized at the end of the process.

Outlined in Table 2 is an outline of the data collection and analysis approaches the team will utilize for answering questions 3 and 4. A complete GTA Matrix can be found in Annex IV.


Table 2: Outline of Data Collection and Analysis for Group 2 Questions

Evaluation Questions

Methods for Data Collection, e.g., Records, Structured Observation, Key Informant Interviews, Mini-Survey

Data Analysis Methods



● All sources for Q2 ● Previous

surveys/instruments ● Donors ● Subject matter

experts ● EDE IPs

● Survey GAP analysis

● Survey data analysis ● Frequency

distributions ● Cross-tabulations ● Content analysis of in

depth interviews ● Meta-analysis

4. What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders in: Business Enabling Environment, Investment Promotion and Facilitation, Export Promotion and Facilitation, Employment, MSME Growth

● All sources for Q3 ● Survey GAP analysis

● Survey data analysis ● Frequency

distributions ● Cross-tabulations ● Content analysis of in

depth interviews ● Meta-analysis


Group 3: Programmatic Response

INITIAL DOCUMENT REVIEW AND DONOR MAPPING

The assessment team will assemble lessons learned from the various types of interventions and approaches that are being implemented by donors and the GoJ to support economic growth and competitiveness. We will conduct a preliminary review of literature, including academic publications, news articles, and donor resources. This step will include USAID’s initial donor mapping matrix to ascertain which donors are actively implementing programs. We will take note of available data that portray the level of resources that donors have committed to each activity, such as the number of staff or overall budget. This initial step will allow the assessment team to obtain an initial understanding of the donor landscape in Jordan. To finalize the list, the evaluation team will cross-reference the listed donor activities with the USAID donor coordinator to ensure that all relevant bilateral, multilateral and private sectors organization’s interventions are included. Using the cross-referenced list of donor activities, the team will create a list of relevant stakeholders including donors, implementing partners, and government ministries with whom the team can conduct key informant interviews.

For consistency, the team will then utilize a classification scheme to code the range of funded interventions sponsored by bilateral and multilateral donors, the US government, and the Jordanian government. The team will select a classification system that most adequately fits the range of projects, activities, and components related to economic growth, competitiveness, and social inclusion. The initial choices under consideration are (a) the US State Department’s Program Area 4 - Economic Growth of Foreign Assistance Standardized Program Structure and Definitions, (b) USAID’s Federal Program Inventory Strategic Goals 2 and 3, (c) the OECD Credit Reporting System (CRS), (d) the twelve WEF pillars described above, and (e) an organizational method used by the Jordanian government. The team may find it advisable to construct a classification scheme tailored specifically to the assessment purposes. A coding system will label the intervention’s sponsor, assign it to a pertinent economic sector, place it in the relevant subcategory, and document its findings. The approach ideally will allow the team to portray the source, type, scale, and funding for Jordanian economic growth, competitiveness and inclusion projects in tables, charts, and graphs.

DATA COLLECTION

The assessment team will conduct interviews with donor representatives that are strategically positioned with the donor’s organizational structure and who can speak about both current and planned operations, strategy and learning at an activity and organizational level. The team will attempt to gather relevant information regarding four overarching themes related to donor activity: a) background and context, b) types of programmed interventions for economic growth and competitiveness, c) coordination with other donors and the GoJ, and d) key lessons learned.

The team will also conduct interviews with government officials in order to understand the perceptions, challenges and opportunities related to government coordination of donor activities. We will conduct key informant interviews with relevant government officials including those in the Ministry of Planning and International Cooperation (see Annex III). The interviews will contribute to the team’s understanding of the donor landscape given the diversity in donor priorities, resources and the challenges and opportunities associated with donor coordination.


ANALYSIS

During the analysis phase, the team will conduct content analysis on the qualitative data from key informant interviews. Information from interviews will be triangulated with relevant quantitative data from the private sector survey and donor documents. This will allow the team to generate a clear set of findings that highlight challenges and priority opportunities related to donors’ current and planned future resource allocation and strategies. During data analysis, the team will construct a map of activities to understand the programmatic and geographical footprint of donors. This diagram will illustrate the overlaps in donor priorities and activities and facilitate comparison with sector data gathered under Question 1. Additionally, the team will present information that facilitates learning and collaboration between USAID and other donors around approaches that maximize impact, highlighting key lessons learned, success stories, and with insights as to how donor priorities may shift over the next several years. A number of the questions will allow findings to be cross-cutting with respect to gender, youth, refugees, and social inclusion in general.

Outlined in Table 3 is an outline of the data collection and analysis approaches the team will utilize for answering question 5. A complete GTA Matrix can be found in Annex IV.

Table 3: Outline of Data Collection and Analysis for Question 5





5. What types of interventions and approaches are being implemented to support economic growth and competitiveness in Jordan?

● Donors (to be added)

● Donor and IP documents

● Donor IPs

● In depth interviews with donors and donor IPs

● Document review

● Content analysis ● Cross-tabulations ● GIS mapping ● Gender and social

inclusion analysis


REVIEW OF THE EDE’S PORTFOLIO

The Activities under the EDE portfolio are intended to contribute to the Mission’s Development Objective 1, Broad-based, Inclusive, Economic Development Accelerated, through the implementation of a unique model with several inter-related components. The EDE is designed to 1) enhance private sector competitiveness, 2) increase workforce development and opportunities for vulnerable groups, especially for the poor, women, and youth, 3) improve management of energy resources, and 4) improve fiscal stability and public financial management.

Each component has a particular focus. The objective to enhance private sector competitiveness, for example, is based on the premise that a supportive business environment can raise living standards, help the private sector’s performance, increase investment, and enlarge employment opportunities. For vulnerable groups, especially the poor, women, and youth, the objective is to match training and other workforce development programs to the demands of the labor market. To answer Question 6, the assessment will produce findings and conclusions on the effectiveness of the different approaches within the EDE programming in meeting intended country-specific goals and in providing information on which interventions or approaches are more likely to be sustainable without additional USAID support. The main methodological approach will focus on the status of indicators across the whole portfolio, ascertaining which are closest and furthest from meeting their targets on schedule.

Another important aspect of the EDE assessment will be the information obtained from key informant interviews (KII), project implementers, high-level decision-makers, beneficiaries, and knowledgeable stakeholders. Interviews will take place with project implementers for the EDE components (JLGF, BEST, LENS, JCP, FRPRM, SCHEP, WFD, and ESCB). These interviews will help identify results and outcomes that could verifiably be directly or indirectly attributed to the EDE portfolio. This outcome includes non-numeric achievements such as legislative and/or regulatory reform or the establishment or strengthening of institutions. Key activity documents will also be reviewed as part of the EDE portfolio assessment.

Because of time constraints, only two projects of the EDE portfolio will be analyzed in greater detail -- the Jordan Competitiveness Program (JCP) and the Jordan Local Enterprise Support Network (LENS). The exercise will include, inter alia, reviewing project reports (quarterly and annual), information from the Jordan Development Knowledge Management Portal, publicly available economic and public policy data, and other formal records related to activities and outputs. Data from these sources, as well as interviews with EDE technical managers, will be utilized to capture the extent and variety of outputs and outcomes growing from the various projects and activities under JCP and LENS.

The team will explore whether the JCP and LENS activities can be associated with the effectiveness of other activities within the EDE portfolio to strengthen the business environment and promote job creation. Other positive results would be facilitating small and medium firms access to finance, supporting legal and institutional reforms to encourage private investment, or improving access to the labor market and developing public-private partnerships. The review will seek to identify these results as well as those that are less definitive, bearing in mind that some interventions require a long time horizon making expectations of early impacts to be unrealistic. Finally, near the conclusion of the overall assessment, the team will ascertain which EDE activities seem most closely associated with future priorities for Jordan’s economic growth and competitiveness.


The data collection method for the EDE portfolio will involve a thorough reading of implementer reports, interviews with USAID technical managers and implementers, and the possibility of meetings with a select number of beneficiaries.

In conducting the portfolio review, the team will bear in mind the relationships among the components under each activity, and the effectiveness of approaches to address their challenges. Five of the activities have an objective of job creation. Four of them aim to increase access to finance, promote PPPs, or improve legisla0tions relating to the business environment. Another three have objectives to improve access to productive resources for vulnerable or marginalized groups, including women. The figure below arranges some of these relationships by theme and beneficiaries.


Table 4: EDE Themes and Beneficiaries

EDE Main Overarching Themes Types of Beneficiaries

Capacity Building MSEs, SMEs, GoJ, Financial Intermediaries

Matching Labor Demand and Supply

Private sector, unemployed and under-employed, including women, youth, refugees

Policy intervention that improves the enabling environment

Private sector, GoJ, consumers, local governments and local communities

Access to services and resources for vulnerable groups or communities

Women, youths, local communities, municipalities

Public Private Partnerships (PPP) Corporations, MSEs, SMEs, consumers, local governments, GoJ

Access to Finance MSEs, SMEs, commercial banks, and other financial Institutions

During interviews and data analysis, the team will explore commonalities among the approaches in each of the activities to ascertain what approaches have been most effective and the lessons learned from those that faced challenges. The team will also come to conclusions on where opportunities exist to maximize the benefits from the interventions for their intended beneficiaries.

Outlined in Table 5 is an outline of the data collection and analysis approaches the team will utilize for answering question 6. A complete GTA Matrix can be found in Annex IV.




Methods for Data Collection, e.g., Records, Structured Observation, KeyInformant Interviews, Mini-Survey



6. To what extent haveapproaches implementedwithin the EDE portfolio beeneffective in promotingeconomic growth andcompetitiveness?

● DevResults● USAID EDE

project documents● USAID EDE Team● USAID EDE IPs● Beneficiaries● GoJ● WEF Inclusive

Growth Index● LENS survey

● In-depthinterviews

● Documentreview

● Indicatorreview

● Includequestions inGeneralPopulationSurvey

● Performance scale● Content analysis● Gender and social

inclusion analysis● Sustainability analysis● Comparison with

national priorities● Cross-tabulations

GENDER AND SOCIAL INCLUSION

Consistent with the Mission’s Development Objective 1: Broad based, inclusive economic development accelerated,” the assessment will necessarily include a gender and social inclusion analysis. For the purposes of this exercise, inclusive economic development will be defined as economic planning, practice and growth driven by values of equity, transparency, sustainability, and community engagement.

Gender and social inclusion analyses assess the differential impact of policies and programs on social groups. Economic analysis is undertaken with an appreciation of gender differences and with a focus on social exclusion. We will focus on four key social groups: women, youth, refugees (Palestinian and Syrian) and the poor.

The potentially differential effects of economic growth policies, strategies and programs on women, youth, refugees and the poor are often masked or obscured. The explicit consideration of gender and social inclusion in an economic growth and competitiveness analysis reveals previously hidden effects and their implications. The team will compare how and why economic growth in Jordan has affected these four social groups in terms of its effects (high or low impact), direction (favorable or unfavorable) and pace (rapid, slow, or static).

The gender and social inclusion analysis will use three frameworks to guide the analysis. The first is the UN Women’s Empowerment Principles, adapted in this assessment for the three other social groups examined (youth, refugees, people living in poverty). The assessment will examine the alignment of


Jordan’s economic growth policies and programs with the empowerment principles. The second framework is the World Bank’s/IFC Doing Business with Women report, also to be adapted for the other social groups. The framework focuses on women as leaders, entrepreneurs, employers, consumers and stakeholders. The assessment’s private sector survey will explore these roles in specific questions to the sample of Jordanian businesses, complementing information available from existing research and published reports. The third framework is the World Economic Forum’s Inclusive Growth and Development Framework, which provides a more detailed assessment of Jordan’s level of economic development than does an analysis based solely on GDP per capita.

We will conduct the gender and social inclusion analysis in three stages: (i) Document Review and Secondary Data Analysis, (ii) Primary Data Collection and Analysis, and reporting on (iii) Assessment, Conclusions and Recommendations. Findings from the gender and social inclusion analysis will be used to develop recommendations geared towards Jordan’s realization of inclusive economic development.

DOCUMENT REVIEW AND SECONDARY DATA ANALYSIS

The assessment team will conduct a review of the literature on gender and social inclusion in Jordan, including academic publications, news articles, and donor reports and resources to understand the landscape for gender equality and social inclusion. During this phase, we will gather existing disaggregated economic growth and private sector data and statistics to understand the inclusive nature of the economic growth landscape in Jordan and to uncover patterns, pace and trends. The review will include national and sectoral statistics and indicators. When available, the team will collect and review data disaggregated by gender, age, refugee status, ethnicity, religion, location and income to provide insight into the extent how access, benefits and contributions that are socially excluded depress Jordan’s economic growth and competitiveness. The team will also identify gaps in disaggregated data and statistics and develop recommendations for future data collection.

PRIMARY DATA COLLECTION AND ANALYSIS

To supplement patterns identified in the review of the secondary data, the assessment team will address gender and social inclusion issues in the private sector survey and in the protocols for key informant interviews with government, the private sector, the informal sector, donors, civil society organizations and representatives from key marginalized groups. Key focus areas for the private sector survey and key informant interviews are constraints, opportunities, priorities and prospects for inclusive economic development in Jordan (see private sector survey methodology above). In interviews with donors including USAID Economic Development and Energy staff, the assessment team will gather information on positive interventions and approaches designed to promote the inclusion of socially excluded groups.

CAPTURING THE INFORMAL ECONOMY

Because the informal economy and the formal economy are inextricably intertwined, the assessment will include a review of past trends and future prospects for Jordan’s informal economy. The team will examine documents by the ILO, UNDP, MOPIC, the IMF and UNHCR, as well as the USAID LENS project survey, for relevant information on informal microenterprises. MESP’s General Population Survey will add to these findings by looking specifically at informal and formal MSMEs. The General Population Survey will disaggregate employed and unemployed respondents by age, sex, income, geography, refugee status and nationality along with notations on the formal or informal nature of their employment status.


ASSESSMENT, CONCLUSIONS AND RECOMMENDATIONS

The assessment team will compile a summary of gender and social inclusion findings and interpret results through a gender and social inclusion lens. To assess social inclusion patterns, pace and trends in economic growth in Jordan the assessment team will analyze both qualitative and quantitative data. In conducting the qualitative analysis, the assessment team will perform content and narrative analysis of the literature on economic growth and competitiveness in Jordan and on the notes and observations from key informant interviews to identify recurrent themes. For the quantitative analysis, the assessment team will conduct a trend analysis of disaggregated economic statistics. An increasing trend in access, participation and benefits for socially excluded groups will be interpreted as a positive indicator of inclusive economic development and a downward trend will be interpreted as the opposite. Similar evaluations related to impact and pace. Explanations for observed trends will be explored in key informant interviews to bring together recommendations for future strategy and programs. Triangulation of the two sets of data will enable assessment team members to identify areas of convergence of findings as well as areas of disparity and provide a deeper explanation of results and future prospects for inclusive economic growth in Jordan. The final stage will be drafting recommendations on future directions of social inclusion programs to abet economic growth and competitiveness.

WORKPLAN

The team’s schedule of planned activities is listed below. The inception phase ends with the approval of the Assessment Design. Meanwhile, the team will be involved in data collection through secondary data collection and some primary interviews, which continue during Phase 1, ending approximately the end of October. Phase 3 encompasses the analysis of findings, leading to conclusions and recommendations, during which additional data collection may continue to fill in gaps discovered during the F/C/R process. The team will present preliminary findings to USAID at periodic stages of the assignment, including prior to finalizing the Report.



Activity Responsible Dates Location

Inception Phase

Initial meeting with EDE Team Team Leader and MESP August 9 Amman

Review of Assessment Documents Assessment Team August 16 – September 10 Remote

Team Planning Meeting Assessment Team September 11-12 Amman Development of Assessment Design Assessment Team September 12 – 23 Amman Status Report Meeting with USAID Assessment Team September 20 Amman Submit Assessment Design to USAID Team Leader October 8 Amman

Data Collection Phase

Data Collection through key informant interviews (KII), in depth interviews (IDI), and focus groups (FGD)

Assessment Team September 24 – Nov 1 Amman and relevant governorates

Private Sector Survey launched Assessment Team October 1 – Nov 12 Amman and relevant governorates

Initial Analysis and Mid-Term Briefings

Mid-Term briefing with USAID Assessment Team October 25 Amman/Remote Initial data analysis of qualitative and survey data Team Leader Nov 2 - 15 Amman/Remote

Pre Report Briefing with USAID Team Leader Nov 15 Amman

Co-Generation of Recommendations Assessment Team/USAID Nov 15 Amman/Remote

Submission of Draft Report Team Leader December 15 Amman/Remote Summary Briefing with USAID Team Leader Jan 15 Amman


ANNEXES

I. Basic Concepts II. Jordan Economic Sector Database III. Twelve Pillars of Competitiveness IV. Getting to Answers (G2A) V. Institutional Interviews – Initial Contacts List VI. Sample Questions for Qualitative Interviews VII. Roles & Responsibilities VIII. USAID Jordan Economic Growth and Competitiveness Assessment 2017

ANNEX I: BASIC CONCEPTS

Economic Growth

Economic growth is an increase in an economy or country's productive capacity. Growth is normally measured by comparing gross domestic product (GDP), and/or gross national product (GNP), in a given year with its level in the previous year. Growth can also be defined as the increase in the goods and services produced by an economy or a country over a given period of time, usually one year, adjusted for inflation. The function of various economic and social sectors within the national economy is to create and provide the market with the required goods and services. In a combined manner, sectors are the generators of the material growth in the economy. The real rate of growth of GDP is, in essence, the weighted average of the real growth rates of different sectors. The sum of these calculated sectoral weights can be added up to total 100 or 1.0. The principal growth engines are, by and large, the level of investment, skilled and productive labor, advanced technology, and quality improvement in the level of education, linked to the concept of economic development.

Economic development coupled with policy interventions aim at economic and social wellbeing of people and poverty alleviation; in other words, the social and political welfare of society. As such, economic development encompasses both growth and welfare, in a two-way relationship. As the prominent economist Amartya Sen pointed out, “economic growth is one aspect of the process of economic development.” In recent years, the idea of sustainable development has incorporated additional factors such as environmentally sound practices that need to be taken into account for growing an economy.

Business Enabling Environment (BEE)

USAID and the EU define the business environment as the set of Institutional, Regulatory, Policy, Infrastructure and Cultural conditions that govern formal and informal business activities. BEE includes the administration and enforcement of government policy, and national and local institutional arrangements that affect the behavior of relevant actors who, in combination, comprise the important players in the business-enabling environment. For the Jordan case, the team will analyze i) the status of the enabling business environment for the period 2012-2016, ii) the current doing business environment in Jordan with international comparisons, iii) the main gaps in specific comparative indicators, and iv) the structures and bottlenecks with negative impacts on the Jordanian business environment.

Competitiveness


Competitiveness is the ability of an economy to optimize the use of available mobilized resources and factors of production to generate goods and services with high-quality standards and minimal economic cost to satisfy local demand and, through exports, the international marketplace. The World Economic Forum (WEF) incorporates into the concept of competitiveness the set of institutions, policies and factors that determine the level of a country’s productivity. In sum, to be competitive, the economy’s productive systems should create adequate net economic returns of the resources and factors of production used to produce these products and services, leading to higher income levels and improved wellbeing.

This concept of competitiveness is closely linked to the behavior and output of a country’s economic sectors – among them, manufacturing, agriculture, finance, energy, mining, transportation, construction, and services. The economic foundation for growth, competitiveness, and development within the economy depends on the behavior and output of economic sectors. (See discussion below on sectors.)

Gender Equality

Gender equality is the state of having the same rights, status, and opportunities as others, regardless of one's gender, with equal ease of access to resources, economic participation and decision-making.

UNICEF elaborates on this concept by defining gender equality as situations and social relations whereby women and men, and girls and boys, enjoy the same rights, resources, opportunities and protections. The ILO defines a state of gender equality when all human beings, both men and women, are free to develop their personal abilities and make choices without limitations set by stereotypes, rigid gender roles or prejudices. Under all these definitions, gender equality means that the different behavior, aspirations and needs of women and men are considered, valued and favored equally. It does not mean that women and men should become the same, but that their rights, responsibilities and opportunities will not depend on whether they are born male or female.

Gender equity also implies fairness of treatment for women and men, according to their respective needs. This notion may include equal treatment -- or treatment that is different but which is considered equivalent in terms of rights, benefits, obligations and opportunities. Consequently, gender equality is the goal, while gender neutrality and gender equity are practices and ways of thinking that help to achieve the goal. Gender equality often requires policy changes.

In its 2012 Gender Equality and Female Empowerment Policy, USAID declares that gender equality is a concern for both women and men, and it involves working with men and boys, women and girls, to bring about changes in attitudes, behaviors, roles and responsibilities at home, in the workplace, and in the community. Documents also allude to the role of institutions, policies, and cultural orientations as abetting or frustrating equality --- in five domains:

● Laws, Policies, Regulations and Institutional Practices ● Access to and Control over Assets and Resources ● Gender Roles, Responsibilities and Time Use ● Cultural Norms and Beliefs ● Patterns of Power and Decision- making

Genuine equality means more than parity in numbers or laws on the books. It means expanding freedoms and improving overall quality of life so that equality is achieved without sacrificing gains for males or females. USAID also notes that female empowerment is achieved when women and girls acquire the


power to act freely, exercise their rights, and fulfill their potential as full and equal members of society. While empowerment often comes from within, and individuals can empower themselves, cultures, societies, and institutions create conditions that facilitate or undermine the possibilities for empowerment.

Social Inclusion

Social inclusion is the process of improving the terms by which individuals and groups take part in society. Inclusion is a process of improving the ability, opportunity, and dignity of those persons who are disadvantaged or marginalized based on their identity. In every country, certain groups—whether migrants, indigenous peoples, refugees, or other minority groups— confront barriers that prevent them from fully participating in their nation’s political, economic and social life. These groups are excluded through a number of practices ranging from stereotypes, stigmas, and superstitions based on gender, race, ethnicity, religion, sexual orientation and gender identity, to disability status. Such practices can rob them of dignity, security, and the opportunity to lead a better life.

The World Bank in its 2013 report, “Inclusion Matters: The Foundation for Shared Prosperity,” suggests how policies and programs can be designed through the lens of three main areas in which individuals and groups want to be included: markets, services, and spaces. Consequently, social inclusion is the process of improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity to take part in society’s markets, services and spaces.

Informal Economy

The informal economy includes production and employment relationships that comprise the sum total of underground, parallel, unregistered or illegal activities. It includes economic activity, employment and self-employment organized without official government recognition. The informal economy is the part of the economy that is neither taxed nor monitored by any form of government. Unlike mainstream industry, commerce and services in the formal economy, activities of the informal economy are not included in a country’s GNP and GDP. The informal economy contributes to value added but is not recorded in national accounts. The IMF estimates that the informal economy makes up 26% of the overall Jordanian economy. According to a UNDP/GoJ study, informal employment represents 44% of Jordan’s total employment.


ANNEX II: JORDAN ECONOMIC SECTOR DATABASE

Table 1. Sample of Firms by Industry Sector (From KINZ Database)

Table 2. Sample of Firms by Governorate Table 3. Sample of Firms by Region


ANNEX III: TWELVE PILLARS OF COMPETITIVENESS

Source: Figure is from the World Bank webpage, drawn from the WEF document The Global Competitiveness Report 2016–2017 (Geneva: World Economic Forum, 2016).


ANNEX IV: GETTING TO ANSWERS (GTA)


Type of Answer/ Evidence Needed (Check one or more, as appropriate)


Sampling or Selection Approach,

(if one is needed)

Data Analysis Methods, e.g., Frequency Distributions, Trend Analysis, Cross-Tabulations, Content Analysis


1. How have the sectors in the Jordanian economy changed since the 2012 economic growth assessment? a) What are the

key growth sectors in Jordan, particularly over the next 3-5 years?

Yes/No ● Department of Statistics

● CBJ ● MOIT ● MOF ● MOPIC ● Chamber of

Commerce ● Chamber of

Industry ● Private

sector associations

● MOA ● Jordan

Tourism Board

● MOE ● NAPCO ● Private

sector survey ● Global

market forecasts

● Macroeconomic reports

● GOJ specialized reports

● Document review

● In depth interviews

● Private sector survey

● Questions in private sector survey relating to sectors

● Questions in private sector survey relating to gender and social inclusion

● List of specific names

● Situational Analysis

● Trend analysis ● Content

analysis ● GAP analysis ● Forecasting ● Gender and

social inclusion analysis

X Description

X Comparison

X Explanation

2. How has the macroeconomic environment changed since the 2012 Economic Growth Assessment? a) What are the

effects of these changes, both at the

Yes/No ● All sources from Q1

● WB/IFC Doing Business

● WEF Competitiveness Report

● USAID JCP ● IMF ● OECD ● EU ● USAID

FRPRM

● Document review


● Private sector survey

● ISIC Classification

● WEF Pillars of Competitiveness

● Specific names to be added

● Questions in private sector survey relating to business environment, export promotion, etc.

● Situational Analysis

● Trend analysis ● Content

analysis ● GAP analysis ● Forecasting/ou

tlook ● Cross-

tabulations ease of doing business

● Comparative analysis


firm and at the national level?

● JIC ● Customs

● Questions in private sector survey relating to gender and social inclusion

● Gender and social inclusion analysis

X Description

X Comparison

X Explanation


Yes/No ● All of the above in Q2

● Previous surveys/instruments

● Donors ● Subject

matter experts

● EDE IPs


● Private sector segmentation

● Survey data analysis

● Frequency distributions

● Cross-tabulations

● Content analysis of in depth interviews

● Meta-analysis X Descripti

on

X Comparison

X Explanation

4. What are the key challenges and opportunities, as perceived by the Private Sector and key stakeholders in: a) Business

Enabling Environment,

b) Investment

Yes/No ● All of the above in Q3


● Specific survey questions related to employment and MSMEs

X Description

X Comparison


c) Promotion and Facilitation

d) Export Promotion and Facilitation

e) Employment f) MSME

Growth

X Explanation

5. What types of interventions and approaches are being implemented to support economic growth and competitiveness in Jordan? a) What have

been some key lessons learned?

Yes/No ● Donors (to be added)

● Donor and IP documents

● Donor IPs

● In depth interviews with donors and donor IPs

● Document review

● Sample of donors implementing economic growth activities

● Sample of relevant donor IPs

● Content analysis


● GIS mapping ● Gender and

social inclusion analysis

X Description

X Comparison

X Explanation

6. To what extent have approaches implemented within the EDE portfolio been effective in promoting economic growth and competitiveness? a) Which of

these interventions and approaches are more effective?

b) Which of these interventions and approaches

Yes/No ● DevResults ● KaMP ● USAID EDE

project documents

● USAID EDE Team

● IPs ● Beneficiaries ● Governorates ● Municipalitie

s ● OECD-DAC

classification system

● WEF Inclusive Growth Index

● GINI Coefficients

● LENS survey


● Document review

● Indicator review

● Include questions in General Population Survey

● Sample of coded activities

● Performance scale

● Content analysis

● Gender and social inclusion analysis

● Sustainability analysis

● Comparison with national priorities


X Description

X Comparison


are more sustainable?

X

Explanation


ANNEX V: QUALITATIVE INTERVIEWS / INITIAL CONTACT LIST

Stakeholder Institutional Interview List

GoJ

Department of Statistics (DOS)

Ministry of Finance (MOF) (different departments)

Ministry of Planning and International Cooperation (MOPIC)

Ministry of Industry and Trade (MIT)

Central Bank of Jordan (CBJ)

Jordan Investment Commission (JIC)

Ministry of Labor (MOL)

Ministry of Education (MOE)

Ministry of Higher Education (MOHE)

Economic and Social Council

The Economic Policy Council (Royal Court)

Ministry of ICT

Ministry of Transport

Ministry of Public Works

Ministry of Public Sector Development

Ministry of Social Affairs

JEDCO (Microenterprises)

Refugee Coordination Office (Police Department)

Higher Council for Youth

Higher Population Council

Local Municipal Mayors (preferably Irbid, Zarqa, Aqaba, Mafraq, Ma’an)


Former Senior Government Officials

Munher Sharé, former Minister of State in economic area

Jawad Anani, former Minister of State in economic area

Yousef Mansour, former Minister of State in economic area, CEO Jordan Stock Exchange

Kamel Abu Jaber, Senator and former Minister of State

Akel E. Biltaji, former Mayor Amman, tourism advisor to King Abdullah II

Professional and Sector Associations

Jordan Bank Association Addli Kandah, CEO

Jordan Business Association Hamdi Taba'a

Jordan Federation of Tourism Associations Michael Nazzal, Chairman

Jordan Tourism Board Abed Al Razzaq Arabiyat, Managing Director

JITOA (Inbound, Outbound, BEST Project) Fadi and Wa'el Kewar

Logistics & Transportation (JETT) Malek Haddad

Jordan Export Association Halim Abu Rahmah

Construction Contractors Association of Jordan Ahmad Taraweneh

Jordan Housing Developers Association Kamal Awamleh, Chairman

Exporters / Traders (Export Association) Halim Abu Rahmah

Audit and Advisory Talal Abu Ghazalah

Medical (HCAC) Hospital Zaid Al Kilani, Farah Hospital

Private Educators Haifa Najar, also in Senate

Jordan Engineering Association (JEA) Majed Tabbaa, President

Jordan Architecture Association Sakher Dodin

Jordan Forum for Business and Professional Women Reem Al Damin

Private Hospital Association (PHA) Fawzi Hammouri


Health Care Accreditation Council Said Darwazeh, May Abu Hamdia, CEO, Salma Jaouni, Managing Director

Jordan Chamber of Industry Dr. Maher Mahrouq

Jordan Chamber of Trade

Amman Chamber of Industry

Amman Chamber of Trade

Information and Communications Technology Association of Jordan (ICT)

The Council of Education in Jordan

Royal Scientific Society (RSS)

Amman Industrial Zone

Local Chambers of Commerce

Mafraq/Ma’an Economic Development Zones

US Government Officials

EDE Director

EDE Deputy Director

EDE Project Management Specialists (AORs/CORs)

USG Unit Responsible for Gender

USG Unit Responsible for Youth

USG Unit Responsible for Economics

USG Unit Responsible for Refugees

EDE Activities

JLGF

LENS

JCP


FRPRM

SCHEP

WFD

ESCB

BEST

Private Sector

El Zay Ready Wear Manufacturing Nadim Yousef Issa Al-Muasher

Nuqul Group / Fine Ghassan Nuqul

Pharmacy One Amjad Aryan, CEO

Jordanian Pharmaceutical Manufacturing Company (JPM) Adnan Badwan, General Director

HIKMA Said Darwazeh, ex Minister of Health

Specialty Hospital Dr. Fawzi Hamouri

National Paints Micheal Sayegh

Social Security Corporation (SSC) Marwan Awadh, President, also ex Minister of State

Arab Bank Radwan Shaban, Chief Economist

KINZ Marwan Juma’a, ex minister of IT

ARAMEX Fadi Ghandour, Founder

Umniah Telecom Ihab Hinnawi

Zain Telecom Ahmad Hanandeh

AZADEA Group (multinational) Said G. Daher

Manaseer Group Eng. Ziad Al Manaseer

Ahli Bank

Microfinance Company (AMC)


Etihad Bank

Microfund for Women (MFW)

National Microfinance Bank (NMB) Al Watani

Jordan Micro Credit Company (Tamweelcom)

Incubators / Private Equity

Jordan Fund Nasha'at and Omer Al Masry

Oasis 500 Maher Kaddoura, Investor and Mentor

Silicon Badia Emile Cubeisy

Endeavor-Jordan Reem Goussous

Al Hassan Scientific Foundation

King Abdullah Fund

Nextmove

NGOs / Subject Specialists

Arab Women Media Center Mahasen EL-EMAM, President Jordan

Director of Amman Center for Human Rights Studies Dr. Nizam ASSAF

INJAZ Deema Bibi, Executive Director

Welfare Society Dr. Atallah Kuttab, former Exec Director

Business Development Center Nayef Z. Stetieh, President & CEO

Al-Ghad Daily Newspaper Ms. Jumanah Ghunaimat, Economist

Jordanian National Commission for Women Dr. Salma Nims

UN Women

CARE

International Rescue Committee (IRC)

OXFAM


Arab Women Media Center

Amman Center for Human Rights Studies

Business Development Center

American Center of Oriental Research (ACOR)

Jordan Strategy Forum

Department of Business Economics, University of Jordan

Center for Strategic Studies, University of Jordan

Multilateral Institutions

UNDP

UNOPS

EU

UNHCR

World Bank

IFC

Islamic Development Bank

European Bank for Reconstruction and Development (EBRD)

ILO

Bilateral Donors

AFD (France)

DFID (UK)

Norway Refugee Council (NRC)

Swiss Agency for Development and Cooperation (SADC)

DANIDA (Denmark)

Danish Refugee Council (DRC)


South Korea

CIDA (Canada)

JICA (Japan)

USAID

GIZ (Germany)


ANNEX VI: SAMPLE QUESTIONS FOR QUALITATIVE INTERVIEWS

STANDARD INTRODUCTION

The team will customize introductions to each stakeholder group below that does not include its own introductory paragraph.

Good morning/afternoon and welcome. Thank-you for taking the time to talk with me today. My name is _______________ and I work for MSI with the USAID Monitoring and Evaluation Support Project (MESP). The MESP project provides monitoring and evaluation support to the US Agency for International Development (USAID) Jordan. Our team is currently working on an Economic Growth and Competitiveness Assessment for Jordan. The Jordan Economic Growth and Competitiveness Assessment will collect information on past trends and future priorities for economic growth in Jordan. The assessment team will identify positive interventions and approaches and develop recommendations for sectors of the Jordanian economy and Jordan’s macroeconomic situation with an aim to promote broad-based, inclusive economic growth and development.

We feel that business and professional associations have important information and insights on these questions.

We are soliciting your input to assist in identifying (1) trends and changes in the macroeconomic environment and sectors in the Jordanian economy, (2) challenges, opportunities and priorities for promoting economic growth and competitiveness, and (3) the extent to which approaches and interventions have been beneficial and effective.

I will ask you a series of questions on issues related to broad-based inclusive economic growth and development in Jordan. At the close of the interview, you will have an opportunity to share anything you think is relevant to the topic that was not covered in the interview, or ask questions. The interview should take between 45 minutes and one hour. Your responses are confidential. Nothing you say will be personally attributed to you. Our report will be written in a manner that no comment can be attributed to a particular person. Are you willing to participate in the interview?


QUESTIONS FOR JORDANIAN GOVERNMENT INSTITUTIONS

The team would divide the questions below among Jordanian public entities responsible for investment, trade, finances, employment, social inclusion, and regulations. Questions would be phrased suitably for high-level informants (Ministers, Secretary Generals (SGs) and/or Director Generals (DGs) and for officials responsible for execution (undersecretaries, operational heads, and department managers). In each meeting, MESP interviewers will select those questions from the list below that are most appropriate for the informant and that realistically could be covered in a 45 to 60 minutes meeting.

1. What is your view on the performance of the Jordanian economy since 2012?

2. Why in your opinion has economic growth slowed down in Jordan?

3. Which do you see as the most promising sectors for growth in the Jordanian economy?

4. How can this growth be stimulated?

5. Which sectors have the best prospects for increasing exports?

6. Which sectors have the best prospects for substituting for imports?

7. What do you believe are the main factors needed to improve the competitiveness of the Jordanian economy?

8. How might the government and business community act to improve Jordanian competitiveness?

9. Why do you think that the international ranking of Jordan on the “the business enabling environment” index has deteriorated compared to other countries?

10. How would you suggest to go about improving the business enabling environment conditions that would raise Jordan’s score?

11. What is the outlook among public agencies for increasing state revenue?

12. What is the outlook among public agencies for rationalizing recurrent expenditures?

13. What is the outlook among public agencies for reducing the public debt?

14. What would be the fiscal policy that you feel most appropriately should be adopted?

15. What would be the instruments that would allow that fiscal policy to be efficiently implemented?

16. In the existing economic circumstances and development environment, is pegging the JOD exchange rate economically justifiable?

17. In the existing economic circumstances and development environment, is the existing high interest rate economically justifiable?

18. Can you describe current mechanisms for creating public-private partnerships for investment projects?


19. If so, how effective are these mechanisms for identifying, selecting, appraising, prioritizing, and costing investment projects by economic sector?

20. If so, how effective are these mechanisms for identifying, selecting, appraising, prioritizing, and costing investment projects by geographic region?

21. What steps can be taken to strengthen MSME? Encourage entrepreneurship? Help companies scale up?

22. How would you propose to go about creating the conditions for sustainable development in Jordan? That is, growth that creates wealth while it increases employment, improves prospects for women, youth, and refugees, and is environmentally sound?

23. How would you propose to go about creating the conditions for inclusive economic and social development in Jordan?

24. What are the main challenges for increasing labor force participation?

25. If these challenges are structural – e.g., regulations that obstruct more employment -- how can they be addressed?

26. If these challenges are cultural – i.e., discouraging women in the workplace – how can they be resolved?

27. If these challenges are skill-based – i.e., workers with inadequate training for existing and new jobs – how can they be rectified?

28. If these challenges are nationality base – i.e., foreign laborers, refugee population – how can they be mitigated?

29. Do you have other thoughts on improving Jordan’s growth and competitiveness?

30. Do you have other thoughts on enhancing economic and social inclusion?

QUESTIONS FOR USAID AND US GOVERNMENT

US government interviews will focus on funded activities at both a general level and, when suitable, specific to the project that the informant is supervising.

General Questions

1) In your words, what has been your role in relation to -------- NAME OF THE ACTIVITY?

a. What years did you play that role?

2) In terms of implementing -------- NAME OF THE ACTIVITY:

a. Did activity implementation closely stick to the original design?

b. Were there any major course corrections or changes? Could you describe them?


c. Were the project objectives and targets realistic?

3) What do you see as the major achievements or successes of -------- NAME OF THE ACTIVITY?

a. What factors assisted or made those achievements possible?

b. What were some of the challenges and how were they overcome?

4) Does --- NAME OF THE ACTIVITY --- have components or approaches designed to promote inclusion of socially or economically marginalized groups? If yes, can you elaborate?

a. To what extent has this been successful?

b. Is there a gender component?

5) In terms of promoting economic growth and competitiveness in Jordan: a. In your opinion, do the strategic objectives of --NAME OF THE ACTIVITY-- align with the current economic growth needs of Jordan? Has that changed over time?

b. Has the activity utilized human and material resources efficiently?

c. Has there been any interaction between --NAME OF THE ACTIVITY—and other USAID activities? Is their collaboration or information exchange between them?

d. How has the design process differed?

6) Which of these interventions and approaches mentioned above are more likely to be sustainable without additional support? Why? 7) If -------- NAME OF THE ACTIVITY could be redesigned and/or re-implemented, what changes would you propose in light of what you know now?

a. What lessons have you learned in regards to design and implementation?

8) Is there anything that we have not discussed already that is important for understanding this activity? More Specific Questions for AOR/COR of each Activity


LENS

a. In this Activity, how effective has the PPP model been? What changes, if any, would you suggest?

b. Could you elaborate as to which approach or component of the activity has been most successful (i.e. strengthening local economic networks, capacity building, enabling environment)

c. What type of support do you think a young person would need to start their own business?

d. What type of support do they think a woman would need to start her own business?

JCP

a. What measures if any are you taking or anticipate in the future to ensure sustainability of the export development program?

b. What recommendation would you make to other (national, local) organizations concerning building capacity in the area of work force development?

c. How effective has the PPP model used in the activity been? What changes, if any, would you suggest?

JLGF

a. To what extent will you continue with the model of stimulating private sector to private sector investment that has been established as a result of your work with the project? What changes do you anticipate?

b. What measures, if any, are you taking or anticipate in the future to ensure sustainability of SME access to finance?

c. Given your experience, what recommendations would you make to other (national, local) organizations concerning mobilizing bank lending for SMEs using loan guarantees?

WFD

a. What lessons have been learned about building capacity with local organizations in the area of work force development?

b. What recommendation would you make to other (national, local) organizations concerning building capacity in the area of work force development?

c. What difference has the project made to the beneficiaries in terms of facilitating access to employment?

BEST

a. In this Activity, how effective has the PPP model been? What changes, if any, would you suggest?


b. USAID has been working in the tourism industry by supporting three 5year activities before BEST. Have you been able to identify and track long-term trends and/or successes? Has BEST been able to capitalize on those opportunities?

c. Are there any areas that the activity has been more successful in increasing tourism industry competitiveness and support job creation?

d. What recommendations would you make to other (national, local) organizations concerning enhancing Jordan´s international image and brand positioning as a tourism destination?

ESCB

a. Do you feel the local environment is welcoming to new entrepreneurial ventures in the energy sector?

b. If USAID were to design a new energy sector capacity building project, what areas and activities should be considered a priority to increase the adoption of energy efficiency and renewable energy technologies?

c. What could the project do/have done to facilitate diversification and use of alternative energy sources?

SCHEP

a. How effective have been the project´s interventions or approaches designed to promote inclusion of socially excluded groups?

b. What measures, if any, are you taking or anticipate in the future to ensure sustainability of your work on cultural heritage resources preservation and management?

c. What recommendation would you make to other local organizations to enable communities, not participating in the project, to preserve cultural heritage resources and market them as a destination to both international and domestic visitors?

FRPRM

a. Out of all the areas and activities pursued by the activity to date, which ones can be considered a priority for USAID to focus implementation during the remainder of the activity? How would this contribute to the project goals of improving fiscal stability and public financial management?

b. What measures, if any, are you taking or anticipate in the future to improve transparency and promote gender-responsive budgeting?

c. How effective have been the project´s interventions or approaches designed to expand public financial management capacity beyond the MOF to line ministries, spending agencies, state-owned enterprises, and governorates?


QUESTIONS FOR PROJECT IMPLEMENTERS

Interviews with EDE project implementers will focus on funded activities at (a) a general level and, when suitable, (b) specific to the project the informant is managing.

General Questions

1) In your words, what has been your role in relation to -------- NAME OF THE ACTIVITY For how many years did you play that role?

2) How would you describe the process of implementing -------- NAME OF THE ACTIVITY?

b. What factors helped this?

c. What factors hindered it?

d. Are any of those factors unique to Jordan?

3) What do you see as the major achievements or successes of -------- NAME OF THE ACTIVITY?

c. What factors assisted or made those achievements possible?

d. What factors impeded those achievements?

4) Does --- NAME OF THE ACTIVITY--- have interventions or approaches been designed to promote inclusion of socially or economically marginalized groups? If yes, can you describe?

5) What have been the major bottlenecks/challenges/problems for -------- NAME OF THE ACTIVITY?

a. What factors contributed to those bottlenecks/challenges/problems?

b. What factors alleviated or countered those bottlenecks/challenges/problems?

6) Does --- NAME OF THE ACTIVITY --- have interventions or approaches been designed to promote economic growth in Jordan? Economic competitiveness in Jordan? How effective have they been?

7) Which of these interventions and approaches mentioned above are more likely to be sustainable without additional support? Has the project taken steps to obtain continuing support?

8) If -------- NAME OF THE ACTIVITY could be redesigned and/or re-implemented, what changes would you propose in light of what you know now?

9) After the NAME OF THE ACTIVITY ends what are the key interventions that you think will be long sustainable?

10) Which of the key interventions you think has the highest impact on the Jordanian economy?

11) Which of your activities do you think should be replicated in any future project designs?

12) What are the key lesson learned in your NAME OF THE ACTIVITY that you would like to see altered in any future programming?


13) What are in your opinion the key missed technical opportunities or areas that this USAID NAME OF THE ACTIVITY didn’t tackle? That you would like to see in any future support projects?

14) What would you alter in the USAID design if you have the chance to re-design this project?

15) Is there anything that we have not discussed already that is important for understanding this NAME OF THE ACTIVITY?

MORE SPECIFIC QUESTIONS BY COMPONENT OR ACTIVITY

LENS

1. What are the technical or financial needs of youth owned businesses to grow and prosper? 2. Since the activity started, what are the technical or financial needs of women owned businesses to

grow and prosper? 3. More in-depth questions to be posed subsequent to conversation with AOR/COR, such as: 4. How effective has the activity’s model been at promoting PPPs? What changes, if any, would you

suggest? 5. What are the key challenges facing MSEs in Jordan today? And, what has USAID LENS done to

address those? 6. What would you say the main impact of USAID LENS on the competitiveness of MSEs in Jordan? 7. What would you say the top MSEs needs in Jordan to be where they need to be? I.e., to be more

competitive? 8. What are the most effective interventions the project was able to offer? 9. Which of them are most likely to stay after the project? 10. What is the impact of the grants fund within the design of USAID LENS? 11. Which approach would you say is best suited to serve MSEs in Jordan from the various ones you

piloted in USAID LENS? 12. What are the key challenges facing MSEs in Jordan today? And, what has USAID LENS done to

address those? 13. What would you say the main impact of USAID LENS on the competitiveness of MSEs in Jordan? 14. What do you see coming up that USAID needs to address in the coming five years? 15. What do counterparts and stakeholders see are the USAID LENS main impact on MSEs Growth? 16. What is USAID LENS leaving the Jordanian economy with? In other words, what have been its key

impacts? 17. What have been some of the key lessons learned over the past 4 years?


JCP

1. What measures if any are you taking or anticipate in the future to ensure sustainability of the export development program?

1. What have been the project’s most effective job creation or job placement interventions?

2. Thinking of the activity’s model to promote PPPs, how effective has it been? What changes, if any, would you suggest?

3. More in-depth questions to be posed subsequent to conversation with AOR/COR, such as

4. Based on their experience: what did USAID need to do to address the issue of WFD when it comes to the competitiveness of the economy?

5. What is USAID`s JCP main impact on the Jordan’s Economic competitiveness status?

6. What are the key impact interventions you have seen in JCP? What are the ones that would sustain after the life of the project? What are the ones with the highest impact on jobs and investment USAID should consider replicating?

7. After working in the Jordanian economy for the past four years on competitiveness, in your opinion what is the best model or approach to be taken by donors to increase competitiveness? For example, would it be sector specific, cluster specific, geography specific? Or working through the BSPs?

8. What have been the most effective components within the project? Which are the ones with the highest impact on the economy and with the highest likelihood of staying after the project?

9. What did USAID miss when it designed the JCP as it is? How effective was the design and the assumption of working through the eco-system?

10. What are the key challenges that prevented them from doing your work?

11. What are the key trends that USAID needs to be aware of?

12. What do you see coming up that USAID needs to address in the coming five years? 13. What have been some of the key lessons learned over the past 4 years? 14. What do counterparts and stakeholders see are the USAID JCP main impact on Jordan’s economic competitiveness status?

JLGF

1. To what extent will your organization continue with the current operational model?

2. Which interventions and approaches within your activity are more likely to be sustainable without additional support? Has the project taken steps to obtain continuing support?

3. What recommendation would you make to other (national, local) organizations concerning mobilizing bank lending for SMEs using loan guarantees?

4. To what degree do you find the recommendations of the JLGF to be valid and operational?


WFD

1. What lessons have been learned about building capacity with local organizations in the area of work force development?

2. What difference has the activity made to the beneficiaries in terms of facilitating access to employment?

3. What recommendation would you make to other (national, local) organizations concerning building capacity in the area of work force development?

BEST

1. In this Activity, how effective has the PPP model been? What changes, if any, would you suggest?

2. What difference has the project made to its beneficiaries in terms of increasing tourism industry competitiveness and support job creation?

3. What recommendation would you make to other (national, local) organizations concerning enhancing Jordan´s international brand positioning and image as a tourism destination?

ESCB

1. Do you feel the local environment is welcoming to new entrepreneurial ventures in the energy sector?

2. If USAID were to design a new energy sector capacity building project, what areas and activities should be considered a priority to increase the adoption of energy efficiency and renewable energy technologies?

3. What could the activity do/have done to facilitate diversification and use of alternative energy sources?

SCHEP

1. How effective have been the activity´s interventions or approaches designed to promote inclusion of socially excluded groups?

2. What measures, if any, are you taking or anticipate in the future to ensure sustainability of your work on cultural heritage resources preservation and management?

3. What recommendation would you make to other local organizations to enable communities that are not participating in the activity to preserve cultural heritage resources and market them as a destination to both international and domestic visitors?

4. What is your current assessment of the GoJ’s capacity to manage Jordan’s archaeological sites? What deficiencies, if any, are there in GoJ’s capacity? What are their most immediate need(s)?


FRPRM

1. Out of all the areas and components pursued by the activity to date, which ones would you suggest to USAID to focus implementation during the remaining of the activity? How would these meet project goal of improving fiscal stability and public financial management?

2. What if any measures are you taking or anticipate in the future to improve transparency and promote gender-responsive budgeting?

3. How effective have been the activity´s interventions or approaches designed to expand public financial management capacity beyond the MOF to line ministries, spending agencies, state-owned enterprises, and governorates?

QUESTIONS FOR THE PRIVATE SECTOR

The questions below would be divided between private sector executives at the (i) ownership or CEO level and (ii) managers in operational divisions. Questions for owners and CEOs would focus on strategic and policy issues, while those at operational levels on the issues encountered in managing operations and reaching targets. In each meeting, MESP interviewers will select those questions from the list below that are most appropriate for the informant and that realistically could be covered in a 45 to 60 - minute meeting.

1. Since 2012, what would you say are the key growth sectors in Jordan’s economy?

2. Have there been changes in the environment for doing business in Jordan since 2012? In what ways/areas?

3. What effects have the changes you observed had on your business? On the national economy?

4. What is the top challenge for increasing employment in Jordan? The top opportunity?

5. What is the top opportunity for growing micro, small and medium enterprises in Jordan? The top opportunity?

6. What is the top challenge for export promotion and facilitation in Jordan? The top opportunity?

7. What is the top challenge for investment promotion and facilitation in Jordan? The top opportunity?

8. What is the top challenge for creating and maintaining a favorable business enabling environment in Jordan? The top opportunity?

9. What is the top challenge for the inclusion of women, youth, refugees and the poor in Jordan’s economy? The top opportunity?

10. Can you share an example of an effective approach or intervention for inclusive economic development implemented in Jordan? Did this approach or intervention promote economic growth and competitiveness in Jordan?

11. What do you see as the top growth sectors over the next 3-5 years?


12. What do you think the top priorities for enhancing Jordan’s economic growth and competitiveness should be? What would need to be done?

13. To what degree would private companies be interested in working with each other and USAID to implement projects for economic growth and competitiveness? How would such cooperation be best organized?


QUESTIONS FOR GENDER AND SOCIAL INCLUSION (GESI) INFORMANTS

Note: Questions will be strategically selected in a number that can be covered suitably for each interview.

GESI Questions/Stakeholder

Gov’t of Jordan

Sector Organi-zations

USG

USAID

EDE IPs

Private Sector

Incubators Private Equity

NGOs

Donors

1. Please describe thefeatures of yourorganization’sprogram for theinclusion of women,youth, refugees orpeople living in poverty in Jordan.

X X X X X X X X

2. Does yourorganization havetargets for the inclusion of women, youth, refugees or people living in poverty in economic activities?

X X X X

3. In your opinion isthe direction ofeconomic growth inJordan promotingthe inclusion ofwomen, youth,refugees or peopleliving in poverty?For which groups?Why or why not?

X X X X X X X X

4. Is the GoJ doingenough toincorporate women,youth, refugeesand/or people livingin poverty ineconomic growthactivities in Jordan?If not, what morecould it do?

X X X X X X X X


5. Is the private sector in Jordan doing enough to incorporate women, youth, refugees and/or people living in poverty in economic growth activities in Jordan? If not, what more could it do?

X X X X X X

6. Are the varying roles (leaders, entrepreneurs, employees, consumers, or stakeholders) women, youth, refugees and people living in poverty recognized in economic growth strategy and plan for Jordan’s economy? If not, how could they be more recognized?

X X X

7. What are the challenges for employment for women, youth, refugees and people living in poverty in Jordan?

X X X X X X X X

8. What are the challenges for entrepreneurship and business ownership for women, youth, refugees or people living in poverty in Jordan?

X X X X X X X X

9. Are there cultural factors that play a role in the

X X


employment of women in Jordan? Please explain.

10. Is there a gap in salaries for men and women? For Jordanians and refugees? If so, how is it affecting business?

X X X

11. Do you think the inclusion of women, youth, refugees and/or people living in poverty will give Jordan’s companies and Jordan’s economy a competitive edge? Why or why not?

X X X X X X X X

12. Do you think the inclusion of women, youth, refugees and/or people living in poverty in Jordan’s economy can contribute to sustainable economic growth for Jordan?

X X X X X X X X

Team will review questions in the Gender DO evaluation and Takamol to compare wording and answers to detect commonalities and differences in the responses.

Specific questions EDE Gender Specialists:

In your work, what are the definitions you use for gender equality and social inclusion? Do the EDE implementing partners use similar definitions?

1. How does the EDE team integrate gender equality and social inclusion in its economic growth portfolio? How do the implementing partners integrate gender equality and social inclusion in their economic growth programs?

2. What challenges has EDE had in integrating a gender equality and social inclusion lens in its economic growth strategy? What challenges have implementing partners had in integrating gender equality and social inclusion in their economic growth programs?


3. What initiatives have you taken to address those challenges? What initiatives have implementing partners taken to address challenges they’ve encountered?

4. What opportunities have the EDE team identified for integrating a gender equality and social inclusion lens in its economic growth portfolio? What opportunities have implementing partners identified for integrating gender equality and social inclusion in their economic growth programs?

5. What initiatives have you taken to leverage those opportunities? What initiatives have implementing partners taken to leverage opportunities they’ve identified?

6. What do you think are the best programs implementing partners have worked on that promote gender equality or social inclusion in Jordan’s economy?

7. What are some specific things EDE plans to do in the next 2-3 years to promote gender equality and social inclusion in its economic growth portfolio?

Professional and Business Association Interview Questions

1. Could you please describe the objectives and activities of your association?

2. Have there been changes in the environment for managing association affairs in recent years? In what ways/areas?

3. Are the effects the same or different for the association and the national economy?

4. What changes are needed for your membership to achieve their objectives more efficiently?

5. Which would you say are the key growing sectors in Jordan’s economy?

6. What factors do you think are key in enhancing Jordan’s future economic growth?

7. What factors do you think are key in enhancing Jordan’s future competitiveness?

8. What is the top challenge for employment in Jordan? Top opportunity?

9. What is the top challenge for micro, small and medium enterprise growth in Jordan? Top opportunity?

10. What is the top challenge for export promotion and facilitation in Jordan? Top opportunity?

11. What is the top challenge for investment promotion and facilitation in Jordan? Top opportunity?

12. What is the top challenge for creating and maintaining a favorable business enabling environment in Jordan? Top opportunity?

13. What is the top challenge for the inclusion of women, youth, refugees and the poor in Jordan’s economy? Top opportunity?

14. Can you share an example of an effective approach or intervention for inclusive economic development implemented in Jordan? How did this approach or intervention promote economic growth and competitiveness in Jordan?


15. To what extent did this approach or intervention promote women, youth, refugee or the poor’sinclusion in and benefits from the economy?

16. What is the key lesson from your example for future economic growth policy and/or programs?

17. Do you other ideas on how your association, the Jordan business community, or the Jordaniangovernment could promote Jordan’s economic growth and competitiveness?

Donor Interview Questions

Introduction

We represent a team working with the Jordan Monitoring and Evaluation Support Program (MESP). MESP is designed to support USAID Mission Performance Monitoring, Evaluation and Project Planning and Design systems. Our team is currently undertaking a broad-spectrum Economic Growth and Competitiveness Assessment of Jordan. As part of this assessment the assessment team will be mapping the different types of economic development interventions and approaches being implemented across Jordan by donors, GoJ and other relevant stakeholders. The assessment team will aim to identify some key lessons learned by key stakeholders (donors, implementers, and GoJ etc.) working on supporting economic growth and competitiveness in Jordan. In this regard, we greatly appreciate that you have taken the time to meet with us.

The interview should take between 45 minutes to an hour. Your responses are confidential. Nothing you say will be personally attributed to you. You can end this interview at any time and refuse to answer any question/s that you are not comfortable answering. Our report will be written in a manner that no comment can be attributed to a particular person.

If you have any questions, comments or concerns during the interview, please feel free to speak up at any point. Do I have your permission to continue with the interview?

1. Background and Context

a. Could you please describe your role?

b. Could you describe _______ (donor name) areas of focus in Jordan?

i. Are certain focus areas and/or sectors more of a priority? (for example, ifprompted, education, youth, economic growth, energy, health, water,environment, democracy, human rights, governance)

ii. Are there geographic priorities?

iii. Are there priorities related to gender and social inclusion of marginalizedgroups?

iv. How would you characterize your activities in terms of humanitarian versuslong-term development?

c. What is the funding allocated to each focus area in the overall donor portfolio?


i. Has that changed over time?

ii. Is there any anticipation of change in the next 3-5 years?

d. Do you know how long _______ (donor name) has been implementing activities in the country?

e. Is there a source that details all of _____ (donor’s name) current activities?

2. Economic Growth and Competitiveness Programming

a. Would you be able to describe _______ (donor name) current economic growth and competitiveness programming?

i. For how long has _________ (donor name) been conducting economic growth and competitiveness programming?

ii. Are there specific focus areas and/or sectors within your economic growth and competitiveness programming?

iii. Who are the key beneficiaries of your interventions?

iv. Have priorities or focus areas shifted or changed over time in regards to conducting economic growth and competitiveness programming?

b. What is the funding allocated to economic growth and competitiveness programs?

i. How has economic and competitiveness programming and funding changed over time?

ii. Is there any anticipation of change in the next 3-5 years?

iii. Do you have any key partners on these activities?

c. Can you describe how _______ (donor name) approaches program design with regard to economic growth and competitiveness programs?

i. Are there any specific approaches that are prioritized (i.e. working with Jordan NGOs vs. local NGOs; private contracts vs. grant agreements; use of trainings and advisors; geographical focus; etc.?)

ii. How have design strategies evolved over time in the Jordan context?

iii. Are there components of gender and social inclusion included?

iv. To what extent are women, youth and marginalized groups involved in the activities?

1. Is there sufficient opportunity for them to engage?


2. What are the major opportunities and challenges regarding theirparticipation?

d. How have economic or other trends affected design or approaches to programming?

i. Have these trends affected results?

3. Effectiveness and Sustainability

a. Based on your experience, which interventions and/or approaches have been moreeffective when it comes to promoting economic growth and effectiveness? Why?

b. Which of these interventions and approaches are more likely to sustain without additionalsupport? Why?

4. Coordinationa. Can you describe any coordination between your organization and other donors?

i. Does coordination occur at the agency level?

ii. At the activity level?

iii. Are there existing protocols or standard operating procedures that guidecoordination activities?

iv. Do you have suggestions for a way to improve coordination?

v. Does your organization have any key relationships?

b. Can you describe any coordination you have with the GoJ, specifically MOPIC?

i. How often are interactions?

ii. How would you describe the relationship?

5. Lessons Learned

a. What are some key lessons learned regarding ______ (donor’s name) economic growthand competitiveness programming in recent years?

i. What have been some key constraints or challenges to success?

b. Are there any activities that you would consider or like to highlight as success stories?

i. Can you describe the activity?

ii. What contributed to its success?

iii. What were some of the challenges that you had to overcome and how did you dothis?


6. Conclusion

a. Given our conversation today, do you recommend that we speak to anyone else at your organization?

b. Are there any evaluations/assessments of your work that you would recommend for us to review?

c. Do you have any questions or concerns that you would like to ask or relay to the assessment team?


ANNEX VII: ROLES AND RESPONSIBILITIES

ASSESSMENT TEAM MEMBERS AND DESIGNATED TASKS

Peter Cleaves, PhD, Team Leader, will be responsible for team organization, scheduling, and primary liaison with the MESP staff regarding technical aspects of the evaluation. He will have overall responsibility for the preparation and submission of the final report with substantial input from the other team members. The other team members will report to him on assessment issues.

The team leader will take the lead in preparing the project schedule and work plan, and will work closely with the other team members to determine information requirements, develop key questions, conduct interviews, and gather other relevant information. He will also lead the team’s effort to prepare and deliver a presentation on the team’s response to the assessment questions, as well as the findings, conclusions and recommendations for future action at the team’s final meeting with USAID/Jordan. He will support team members faced with time constraints in gathering and interpreting data.

Dr. Cleaves will also supervise the preparation of the final report, and will ensure the quality of its contents. Upon receiving USAID’s comments on the final draft report, he will be responsible for making any final corrections and improvements, and the submission of the final version to USAID.

Dr. Cleavers’ career has been in private business, consulting, philanthropy, and academia in the Middle East, Latin America, the United States, and Europe. His specialties include governance, entrepreneurship, sustainable development, higher education, microfinance, youth development, public policy, democratic processes, project management, and corporate social responsibility. He has held executive positions at First Chicago, the Ford Foundation, AVINA Foundation, Emirates Foundation, First Chicago, and the University of Texas. He advises businesses, multilaterals, private equity funds, banks, universities, and oil and gas companies on their international activities. Dr. Cleaves’ PhD in political science is from the University of California, Berkeley.

Khalid Al Wazani, PhD, Senior Economist, will focus his attention on the competitiveness of Jordan’s economic sectors. He will utilize quantitative and qualitative methods to track the trends in sector competitiveness and to identify those sectors that have the most favorable prospects to advance in the future. Widely familiar with the Jordanian economy, he will assist in arranging appointments with leading members of the public and private sector, a large number whom he knows personally. He will assist the team to understand their perspectives and evaluate their plans for growing production, exports, domestic and international competitiveness, and employment.

Dr. Wazani, a Jordanian citizen, has held senior official positions in Jordan, advised other governmental institutions on economic affairs, and held a full professorship and deanship at universities in the Middle East. In Jordan, his high-level responsibilities have been in the customs department and the national pension and social security fund. He has private sector experience in real estate management. Through board position and consulting, he is familiar with the operations of Jordanian public sector institutions and the business community. Dr. Wazani’s doctorate is from Cairo University, and his publications include Principles of Macroeconomics now in its 10th edition.

Hashim Al Ali, PhD, Senior Economist, will be primarily responsible for the assessment’s analysis of economic growth and the business environment. He will contribute to the sector analysis and social inclusion elements of the assessment, and participate actively in evaluating the prospects for Jordan’s


economic prospects and enhanced competitiveness. He will carry out a large number of interviews with Jordanian government officials both to assemble relevant data on economic trends and to ascertain the national leaders’ perspectives on the country’s economic growth strategy.

Dr. Al Ali, born in Iraq and a Canadian citizen, has served as a senior consultant for Wharton Econometrics. Internationally, he has advised senior government officials in Rwanda, Somalia, Timor-Este, Sierra Leone, Saudi Arabia, Yemen, Bangladesh, Kosovo, Kenya, UAE, Uganda, Libya, South Sudan, and Iraq. His considerable experience in Jordan (including governorates) includes public management, capacity development, administrative reform, and national planning. Among his most recent of nearly eighty publications are those dealing with sectoral linkages, input-output tables and their modelling applications, regional development, public finance management and fiscal frameworks, social accounting matrix, and macroeconomic modelling and forecasting. Dr. Al Ali received his PhD at the University of Wales, United Kingdom

Andrew Schneider, private sector specialist, is well versed on the challenges and opportunities facing businesses internationally. He will take the lead in analyzing the perspectives of national and international company owners and managers with respect to maintaining and growing their enterprises. An expert in quantitative surveys, he will determine the value to the assessment of constructing a questionnaire for a large sample of businesses of all sizes, sectors, and regions. The survey would complement other recently completed surveys by concentrating on challenges for and obstacles to growth, competitiveness, and employment including women and marginalized groups. Mr. Schneider will actively contribute intellectually and methodologically to the work undertaken by all other team members.

Mr. Schneider’s experience has focused on the private sector in a range of developing and middle-income countries. He has analyzed and crafted policy, designed reform programs, facilitated capital transactions, built teams, and delivered results for companies, business associations, financial institutions, donor agencies and host governments. Countries assisted include Bosnia, Pakistan, Botswana, Uganda, Serbia, Montenegro, Zambia, South Africa and Kenya. In the United States, he advised Fannie Mae and had private sector management responsibilities for Price Waterhouse and IBM international financial activities. Mr. Schneider’s M.A. degree is in public policy analysis at the College of William and Mary in Williamsburg, Virginia.

Francisco Molina, Senior Economist, will lead the team’s analysis of the USAID’s portfolio of activities in the program for Economic Development and Energy (EDE). He will carry out an assessment of the orientation and general purposes of the program’s eight main foci. He will ascertain their relative effectiveness in reaching their targets, and their correspondence with the main factors stimulating Jordan’s past and future economic growth and competitiveness. Mr. Molina will delve more thoroughly into the results achieved by two of EDE’s sub-programs, the Jordan Competitiveness Project (JCP) and the Jordan Local Enterprise Network (LENS). Their results are significantly related to the team’s overall mandate to analyze growth and competitiveness.

Mr. Molina, a citizen of El Salvador, has extensive experience in macro and micro economic analysis, monitoring, project evaluation and social research using rights based approaches to development, including for women and children. He held key economic positions in the Central Reserve Bank of El Salvador and USAID prior to a range of consulting and evaluation assignment with UNCTAD, UNDP, IADB, USAID, IPEC ILO, UNICEF, ECLA, the government of Japan and with private sector entities. Countries covered are El Salvador, Honduras and Nicaragua, Argentina, Dominican Republic, Guatemala, and Mexico. Mr. Molina’s M.A. degree in economics is from American University in Washington.


Patricia Morris, PhD, who is a gender specialist, will concentrate her efforts to understanding the relationship between gender and social inclusion with Jordan’s economic growth and competitiveness. She will characterize the current status of women, youth, and refugees in the country’s current economic structure, including workforce participation, and examine the degree to which structural obstacles and cultural norms have evolved to hinder or advance these groups’ opportunities. She will consider and report on ways to more fully incorporate these groups would assist Jordan’s goals for economic growth and competitiveness.

Dr. Morris has evaluated numerous USAID projects, as well as implemented gender mainstreaming initiatives, strengthened national and overseas staff capacity, conducted portfolio and program assessments and evaluations, and created effective external partnerships. She has developed measurement approaches for institutional, national and community progress towards equitable and inclusive development, with contributions covering Afghanistan, South Africa, Benin, Burkina Faso, Côte d'Ivoire, Niger, Togo and Ghana. She has been President of Women Thrive Worldwide, Executive Director of Peace X Peace, and currently is Adjunct Professor at American University in Washington, DC. She received her PhD from in International Politics from Florida State University.

Raj Kapoor, Technical Specialist, will be engaged most fully in understanding and documenting the priorities and activity of other external donors to Jordan’s economic growth and competitiveness. He will oversee gathering publically available information on their interventions including their content and budget resources. He will establish an interview schedule and interview major donors for additional information and insights. One result will be to categorize their interventions and compare them to past and prospective USAID programs in Jordan related to economic growth and competitiveness. He will in addition provide continuous support to the Team Leader and team members to conform to the assessment’s schedule of activities and overall deliverables. He will also be responsible for drafting specific sections of the final report.

Mr. Kapoor is Technical Manager for Management Systems International (MSI). He has experience in over sixty projects conducting research, collecting data, and facilitating institutional learning from initiatives in a wide range of international development projects. Fields of expertise include trade, employment, citizen participation, infrastructure, education, youth, press freedom, and fundraising. His breadth of experience includes South Sudan, Vietnam, Pakistan, South Africa, Burma, Mozambique, Malawi, Zimbabwe, Angola, Nigeria, and Mauritius. Previously he directed a community-based organization in Rio de Janeiro, Brazil. Mr. Kapoor holds a M.A. in International Affairs from the School of International and Public Affairs at Columbia University.


ANNEX VIII: PRIVATE SECTOR SURVEY: SAMPLING PLAN

INTRODUCTION

The sampling approach for a survey must be driven first by the research objectives and then shaped by the appropriate statistical theory. The objectives for this survey include:

1. To reach statistically significant conclusions about different behaviors, attitudes and preferences of formally registered Jordanian businesses.

2. To understand how these behaviors, attitudes, and preferences, differ among different groups defined according to size, location and industry.

3. To develop an additionally detailed and statistically significant perspective about Jordanian businesses that are involved with the tourism sector.

In terms of statistical theory, sampling approaches can be broadly categorized into two groups: probability-based and non-probability sampling.

PROBABILITY-BASED SAMPLING

Probability-based approaches are generally preferable because they are less likely to introduce bias into the statistical inferences that are drawn about the population from the sample. The probability-based sampling approach that comes closest to what is required for this survey is Stratified Random Sampling. Stratified random sampling involves the division of a population into smaller groups known as strata based on members' shared attributes or characteristics. A random sample from each stratum is taken in proportion to the stratum's size when compared to the population and the subsets of the strata are then pooled to form a random sample.

There are two reasons why the stratified random sampling approach is not a good fit for this survey. First, the scope of required stratifications is not compatible. Our survey requires stratification according to three different variables whereas the stratified random sampling approach is constrained to stratification using a single variable. The second reason relates to purpose. The purpose of using a stratified random sampling approach is to make statistical inferences about an entire population more accurate or efficient, i.e. the focus is entirely on the population. The approach does not necessarily facilitate analysis of each of the strata within the population, or the differences between them. Since one of the clear purposes of our survey is to look closely at groups of businesses, and differences between them, the approach is not a good fit.

NON-PROBABILITY SAMPLING

Non-probability sampling refers to techniques where samples are gathered through a process that does not give each unit in the population an equal chance of being selected. Quota sampling is a type of non-probability sampling that provides substantial benefits in terms of our survey objectives. Quota sampling refers to a process where units of a population are selected into a sample on the basis of pre-specified characteristics so that the total sample has the same distribution of characteristics that exist in the population being studied. Quotas can be set at the sub-group level, rather than just the population level, which facilitates statistical significance in sub-group level inferences, as well as differences between sub-groups. Quotas can also be set up for subgroups according to more than one variable, which suits the purposes of our survey well.

USAID.GOV ECONOMIC GROWTH ASSESSMENT | 2

One potential downside in using quota sampling approach is the possibility that bias is introduced to population-level statistical inferences. However, because we will be using three variables to establish sub-groups and associated sampling quotas, there will be three different weighted average aggregation approaches that we can use to assess any potential bias in population-level statistics.

Given its more direct applicability for our survey purposes, and the ability to mitigate any potential bias through weighted average comparisons, the private sector survey will be developed through a quota sampling method. Details of the application of this method are discussed below in terms of sampling units, sampling frames and sample sizes.

SAMPLING UNITS

As discussed above, the answers to research questions about a population are often desired for different subgroups of the population. The characteristics that define these specific subgroups of a population are the survey’s “sampling units”. This private sector survey will use three categories of sampling units: (i) location of business; (ii) industry of business; and (iii) size of business.

Sampling units define the segmentation approach for sub-groupings of the overall population of registered Jordanian businesses. Our quota-based sampling approach is designed to enable analysis of the population overall, as well as the subgroups.

For the first group, Location of Business, sampling units will be defined as those businesses where the principal activity takes place within the territory of a Governorate, for each of Jordan’s 12 Governorates.

The second group, Size of Business, sampling units are defined according to number of employees, for each of the following categories:

a) Micro Enterprise (10 or fewer employees)b) Small Enterprise (11 to 25 employees)c) Medium Enterprises (26 to 100 employees)d) Large Enterprises (More than 100 employees)

Sampling units for the third and final group, Industry of Business, are defined using the International Standard Industrial Classification 4th Revision (ISIC Rev4). There are several levels of classification within ISIC. The highest-level classification scheme of ISIC Rev4 is an alphanumeric coding system for 21 Sections of industrial activity. The 21 Sections of ISIC are then broken down into 88 Divisions which are identified by 2 digit numeric codes. Finally, for an even more granular segmentation of industry classifications, the 88 Divisions can be broken down into 419 Classes, which are identified by 4 digit numeric codes. Divisions can be identified within the Class scheme by the first two digits of the Class code.

In addition to the standard ISIC coding schemes, there are two additional schemes available for use with national accounting systems called SNA coding schemes. The top-level SNA scheme, often referred to as the A*10 system, is useful for distinguishing between the various stages of production, from production of raw materials to processed goods and for separating production-oriented from services-oriented activities. The second level SNA scheme, the A*38 system, further helps analysts to differentiate between market production, non-market production and production for own final use.

The relationship between the standard ISIC Codes and the SNA Schemes is illustrated below:


For the purpose of our survey sampling units are established at the Division level, which is the lowest level of disaggregation that is feasible to look at for a survey capturing the entire spectrum of industrial activities. By establishing sampling units at the Division-level we will be able to aggregate survey results up to both of the SNA levels as well as the ISIC Section level which will be useful for studying survey answers to different types of questions.

From sampling perspective, each of these three groups of sampling units are to be seen as independent. In other words, there is no intention to create a tiered structure of sampling units where the sampling unit in each group would be defined by combinations of all the different sampling units from each of the other groups. That level of detail would require a level of time and effort that is far beyond the resources for, and requirements of this survey.

SAMPLING FRAMES

Sample frames are datasets that contain the populations for each of the different sample units. For the purposes of this survey the sample frames have been established according to active companies contained in KINZ database.

Established in 2009, KINZ was Jordan’s first company specializing in corporate data mining. KINZ has a clear focus on building distinctive databases to serve the various sectors of the Jordanian economy, coupled with a host of added value products and services. KINZ is unparalleled in the volume and quality of data available online. The data includes all key information such as complete corporate address, names and titles of key personnel, and the application of ISIC 4 industry classification schematics, which is the same segmentation scheme employed in the overall assessment framework. All of KINZ’s records are checked twice a year and updated where necessary by professional staff. KINZ has a service level agreement for data exchange with Jordan’s public registry of companies and several GoJ institutions use the KINZ data

A*10

ISIC "Sections" (21)

A*38

A*38

ISIC "Divisions" (88)

ISIC "Di i i " (88)

ISIC "Classes" (419)

ISIC "Cl " (419)


for official government business. For all these reasons, KINZ is recognized as the most accurate source for business information in Jordan.29

There are also several operational reasons for using the KINZ database to anchor the private sector survey in terms of defining sampling frames and obtaining the required samples, including: ⇒ KINZ is comprehensive; it includes over 79,000 registered businesses in Jordan whereas previous

enterprise surveys like the World Bank Enterprise Survey selected samples from an overall samplingframe of only 7,000 to 8,000 businesses.

⇒ KINZ includes up to date information on the location and contact information for each business,including their telephone numbers, which allows us to conduct a phone survey, or in case requested bythe respondents, an in-person survey.

⇒ KINZ provides comprehensive geographic coverage in all governorates, not just the ones where USAIDhas focused.

In fact, the only clear shortcoming associated with using KINZ is the fact that it does not include informal businesses. The assessment team did explore ways to mitigate this shortcoming by evaluating the possibility of sampling from the LENS project database. But the team ultimately determined that there were several drawbacks to using this approach that undermine its overall utility for this particular application, including: ⇒ The LENS data includes businesses from only the subset of Governorates where the LENS project was

active; using LENS to establish sampling frames and to draw our samples would therefore introducebias into inferences drawn about the rest of the country.

⇒ There is no proper way to proportionally incorporate informal businesses into the quota samplingapproach that is being used for this survey as the population of informal businesses is unknown; i.e.sampling frames for formal and informal businesses would be fundamentally different in nature andthis would dictate the use of different sampling techniques such as a cluster-based approach which isnot as well suited to the survey’s objectives.

⇒ The way in which informed consent was obtained by the LENS team (assurance of confidentiality)complicated our ability to go back to those respondents for a separate data collection effort.

Rather than distort the survey, the team determined it was more effective to incorporate the perspective of informal businesses into the overall assessment through other means.

According to the KINZ data extract reviewed in August 2017 there are close to 80,000 unique and active businesses registered with Jordan’s Company Control Department within the Ministry of Industry and Trade. A breakdown of these businesses by Governorate is provided below in Table 1.

29 For more information see: www.kinz.jo/site/about

http://www.kinz.jo/site/about


TABLE 1: KINZ Sample frame analysis disaggregated by location

Sampling Unit (Governorate)

Sampling Frame

Ajlon 636

Amman 58,334

Aqapa 2,120

Balqa 2,289

Irbid 5,427

Jarash 689

Karak 1,397

Ma'an 870

Madaba 1,202

Mafraq 1,482

Tafilah 530

Zarqa 4,576

Total for all Governorates 79,552


SAMPLE SIZE

Sample size is important because it directly affects how accurate the findings of the survey are at representing the different characteristics and responses of each sampling frame. The larger the sample size, the more accurate the findings. But larger sample sizes have higher costs, so determining the right sample size comes down to balancing requirements for accuracy and availability of resources.

Accuracy is generally defined by two parameters:

(1) Level of Confidence(2) Margin of Error

Table 2 provides sample size requirements for various combinations of accuracy parameters.

TABLE 2: Sample size requirements for different levels of accuracy

Population = 80,000 Margin of Error

Level of Confidence +/- 2% +/- 2.5% +/- 3%

99% 3,955 2,577 1,807

95% 2,331 1,508 1,053

90% 1,646 1,062 740

Table 2 shows that accuracy requirements have a profound impact on the required sample size; as accuracy requirements increase the number of observations increases sharply. With USAID-funded surveys like this private sector survey it is typical to sample sufficient to achieve a 95% level of confidence with a 5% margin of error (+/- 2.5%). Using these two parameters as a guide, the minimum sample size for this survey is 1,500 registered businesses.

SAMPLE QUOTAS

While the minimum overall sample size of 1,500 reflects the aggregate population of approximately 80,000 registered Jordanian businesses, the sampling quotas are set at sub-group level for each of the three different variables. Quotas are calculated on a proportional basis, subject to maximum and minimum amounts to ensure that businesses in categories that are heavily skewed towards certain categories do not dominate the resulting sample.

For example, there are 30,000 businesses active in ISIC Division 47, which captures all retail trade, excluding motor vehicles. And there are 437 businesses active in ISIC Division 14, which captures manufacturers of wearing apparel. If a strictly proportional allocation of the aggregate sample was used to set the sub-group quotas, the sample would include 418 retail businesses and 6 apparel makers. By establishing a maximum quota of 60, and a minimum quota of 12, for each ISIC Division the quotas become 60 retail businesses and 12 apparel makers.


Quotas for each of the three variable groups, and the parameters for establishing them, are outlined in Attachment A.

TOURISM SECTOR SEGMENTATION

In order to incorporate a robust evaluation of businesses involved in the tourism sector into the survey an additional sample of tourism-related businesses is also being developed. This involves building an additional sample of up to 500 additional businesses that are involved in the tourism industry, bringing the total sample up to approximately 2,000 companies.

Because the tourism element is focused on a more detailed set of industrial activities the sampling units capture activity at the 4-digit “Class” level of ISIC. Details for the development of the Tourism Sector sample are also outlined in Attachment A.

https://drive.google.com/open?id=0B4fB3hF5jBtaN0I1TTdwM19xd1k

https://drive.google.com/open?id=0B4fB3hF5jBtaN0I1TTdwM19xd1k

ASSESSMENT REPORT ECONOMIC GROWTH AND … · quality control measures 137. coding. 138 data entry...

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