Amman, July 17, 2006 — The
International Finance Corporation, the private sector arm of the World
Bank Group, today signed an agreement with the government of Jordan, through
the Ministry of Industry and Trade and the Ministry of Labor, to simplify
licensing and inspection procedures for businesses in Jordan. The
project is organized by PEP-MENA, IFC’s private enterprise partnership
facility in the Middle East and North Africa.
Private sector development is critical
to Jordan’s economic growth and prosperity. Despite Jordan’s recent progress
in improving regulatory processes and creating a better environment for
private investment, there is still room for improvement.
PEP-MENA’s licensing and inspections
simplification project aims to attract private investment into Jordan by
reducing regulatory constraints for establishing businesses. The project
will conduct a comprehensive review and streamlining of current inspection
procedures at selected ministries, such as Jordan’s Ministry of Industry
and Trade and Ministry of Labor.
Michael Essex, IFC’s regional director
for Middle East and North Africa, commented, “IFC welcomes this opportunity
to collaborate with the government of Jordan to develop the investment
climate in the country. With this technical assistance, PEP-MENA aims to
help streamline governmental inspection processes, thus stimulating private
sector growth and creating a healthy environment for investment.”
Recognizing the importance of an efficient
regulatory framework, the government of Jordan has launched several initiatives
to foster the growth of the private sector and strengthen the business
enabling environment. In 2005, the Ministry of Industry and Trade facilitated
the start-up company registration process and streamlined procedures. In
addition, the ministry set up the “Committee on Awareness, Instruction,
and Supervision for the Industrial Sector,” to address the burden
of inspections on business operations.
PEP-MENA’s project will complement
these ongoing reform efforts. The project aims to reduce the cost and time
of complying with regulations for private firms and create a transparent
inspection system. It will include a review of the legal framework and
the maintenance of a risk-based management system. By actively involving
the private sector and all stakeholders in the process, the program hopes
to increase public awareness about the reform efforts, thereby maximizing
its potential for success.
In addition to working with the Ministry
of Labor on overall inspection reform activities, the project will also
include a component on corporate social responsibility in the Qualified
Industrial Zones. The project will aim to design a market-based incentive
system to increase compliance with international labor principles and local
labor law in the garment sector. This component will be jointly managed
by PEP-MENA and IFC’s Foreign Investment Advisory Services.
PEP-MENA is IFC’s technical assistance
facility that supports private sector development in the Middle East and
North Africa. It focuses on improving the business enabling and regulatory
environment; strengthening the financial sector; promoting the growth of
small and medium enterprises and their support services, such as business
organizations and consulting firms; helping restructure and privatize state-owned
enterprises; and developing viable private sector and public-private partnership
projects, especially in infrastructure.
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other
institutions of the World Bank Group but is legally and financially independent.
Its 178 member countries provide its share capital and collectively
determine its policies.
The mission of IFC is to promote sustainable
private sector investment in developing and transition countries, helping
to reduce poverty and improve people’s lives. IFC finances private sector
investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY05, IFC has committed more than $49
billion of its own funds and arranged $24 billion in syndications for 3,319
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY05 was $19.3 billion for its own account and $5.3 billion held
for participants in loan syndications.