Concern in Jordan over Aqaba port special economic zone
(AFP, AMMAN) - Alarm bells are ringing in Jordan over an ambitious government plan to turn the southern Red Sea port of Aqaba into a duty-free special economic zone capable of drawing millions of dollars in investment.
The project calls for launching, in 2001, a low-tax economic zone to attract six billion dollars from tourism, information technology firms, industry, commerce and services, create 70,000 jobs and help double per capita income by 2020.
A special authority will administer the new zone, where sales taxes will be lowered to between zero and five percent compared to around 13 percent in the rest of the kingdom.
Opponents say it will turn Aqaba -- Jordan's only outlet to the sea -- into a self-rule haven for money-launderers, smugglers and moral corruption.
Aqaba's proximity to Israel is also fanning passions with many Jordanians worried that Israelis who will buy land under the cover of foreign investors.
"Aqaba is very sensitive. It shares borders with Israel and Saudi Arabia. It is our only port. We cannot play games or take risks with it," respected economist Fahed al-Fanek told AFP.
Fanek, echoing several MPs and analysts, expressed concern that custom-made legislation for Aqaba within defined boundaries will undermine sovereignty, consecrating "Aqaba's separation from the rest of Jordan."
Deputy Salameh al-Hiyari is more blunt. "It is as if we will set up a state within a state," he said, also voicing concern that gambling casinos will mushroon in Aqaba and upset Jordan's conservative Muslim society.
But Deputy Prime Minister Mohammad Halayka and his associates on a task force appointed by King Abdullah II to carry out this mission strongly refute suggestions that Aqaba will fall prey to evil.
"Jordan's sovereignty in Aqaba will not be undermined in any way. We are only trying to find an engine to create economic growth... attract foreign investment and create jobs to overcome unemployment and poverty," Halayka said.
With seven billion dollars in foreign debt, high unemployment and around 40 percent of the five-million population living beneath the poverty line, Jordan is in dire need of an economic boost.
Halayka is a former secretary general of the trade ministry and led Jordan into the World Trade Organisation this year after tough negotiations. Abdullah decorated him for his efforts. He remains confident in his new venture.
"Investors come to a region wanting an easy export route, water, manpower, infrastructure, good living conditions and easy investment procedures. Aqaba is the only place in Jordan with those conditions," he explains.
Legal safeguards have been drawn up to monitor the sale of land only to investors rather than foreign settlers and the government is determined "to preserve Jordan's moralistic values and Arab and Islamic culture".
"There won't be any investment without scrutiny or controls," he said.
Harvard Law School graduate Salah Bashir, a key architect of the legal framework for the Aqaba development, argues that parliament, the prime minister and the cabinet will always have their say in Aqaba.
"The law is providing for specific provisions which relate to economic activity as well as a system for taxes and customs treatment... the rest of Jordanian law will apply," Bashir said.
"We are putting the legal framework which will allow us to reap the benefits of the investment that has been done in Aqaba over the past 30 years," he told AFP.
The special zone will help Jordan double its annual income per capita in 20 years from 1,100 (1,540 dollars) dinars to 2,200 (3,080 dollars) dinars, he said.
"The total revenue to the budget out of Aqaba today is less than one million dinars (1.4 million dollars). The projection is 20 times that per year," Bashir said.
Jordan's Customs chief Khaled al-Wazani told AFP that port revenues from Aqaba will continue to directly feed the national treasury and will even grow.
"Economic benefits will be much higher because activity at the container port will develop under the action plan, with tourism taking up 50 percent of overall activity, services 30 percent and industries 20 percent," Wazani said.
Last week the government passed its first hurdle when a joint committee of parliament's legal and economic commissions endorsed the draft plan for Aqaba and submitted it to parliament for approval.
By Hala Boncompagni
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)