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.
