Were you one of those who shook their heads deridingly when Jordan's first national strategy for the development of the information technology sector was launched, in June 1999? Well take a look around now.
Microsoft announced on Wednesday that it will open shop here in February and it will seal an alliance with Yarmouk University. Other giants of the caliber of Sun Microsystems, Hewlett-Packard and Oracle have started certification programs at Jordanian universities. Some of them have already invested in the newly created Jordan Hi-Tech Fund, and much more is cooking. Officials privately whisper that one of the world's top financial conglomerates is seriously considering opening a division over here soon.
When, in last June's REACH Initiative, IT entrepreneurs set the target of attracting $150 million in foreign direct investments (FDI) by 2004, some dismissively rolled their eyes. Meantime, King Abdullah and sector leaders rolled up their sleeves. Over the last 18 months, one-third of that then-seemingly far-fetched goal has already been achieved, and the IT sector lured in $53 million in FDI.
“Global companies want to come here because they know that King Abdullah is personally following up on things, and because we are doing the right things,” states Bassem Awadallah, head of the economic unit at the Royal Court. “We are an industry that has covered a lot of ground over the past 18 months,” says Karim Kawar, chairman of [email protected], Jordan's IT association representing some 50 firms. “The momentum that has been created was never witnessed in any other sector. This is largely due to His Majesty's keenness in seeing Jordan becoming a leader in the software development and IT services industry.”
Another representative of the young but accomplished generation of Jordanian IT professionals, Ramzi Abdel Jaber, CEO at the financial portal menafn.com — with a CV that must have been the envy of many while he was in Silicon Valley — offered a summary of the past year's developments in the IT sector at a meeting on Tuesday of the Economic Policy Forum of the Jordan Development Center. “Over the past 12 months, Jordan has witnessed its own IT revolution,” Abdel Jaber told the meeting, held in cooperation with Germany's Friedrich Ebert Stiftung.
In March, Egypt's EFG Hermes invested $3 million in maktoob.com and Syntax Digital, while Arabia Online, an Amman-based leading general-purpose portal in the region, signed a $4 million venture deal. In October, Arabia Online also raised $15 million with Compaq as a leading investor. In June, menafn.com raised $1.5 million.
In July, Al-Bawaba, another regional general purpose portal, raised $5.15 million in international funding, and One World Software Solutions raised $12.2 million from Citibank, Advent International, New Horizons Capital and Foursan — a new Jordanian venture capital firm targeting non-publicly traded start-ups and emerging IT ventures in the MENA region. Two months ago, Italy's Acotel acquired one-third of info2cell, in a deal worth some $4 million.
In one of the first significant mergers on the local IT scene, Batelco Jordan was born three weeks ago, with Gulf giant Bahrain Telecommunications Co. (Batelco) buying a strategic stake in two local Internet service providers (ISPs): Firstnet and NETS.
Meanwhile, most Jordanian e-solution providers, generally regarded as visionaries only a couple of years ago, are now going global, opening offices in the US and European capitals. Abdel Jaber placed the number of individuals currently employed by the industry at around 4,000 and added that $30 million in IT exports were reached this year.
The number of Internet users is estimated at more than 80,000, while the country's six ISPs have declared 25,000 account holders. Companies comptroller, Salem Khazaleh, was recently quoted in the Arabic press as saying that 434 IT-related companies had registered in the first 11 months of this year, with a total paid-up capital of 26.7 million Jordanian dinars.
True, IT experts and leaders admit that Jordan lags at least five years behind Europe in terms of IT development — and five years in the electronic era are a lot. But King Abdullah has undeniably succeeded in placing Jordan on the global IT map. IT giants sent their number twos and vice-presidents to Jordan's first IT Forum, convened last March by the King at the Dead Sea to show-case local companies and provide them with a chance to network at the global level.
In addition, well-placed sources say that, when Jordan was negotiating the Free Trade Agreement with the US, signed in October, CISCO's CEO John Chambers and AOL's CEO Steve Case took it upon themselves to lobby in the Kingdom's favor. Cisco, the company with whose equipment 80 percent of the Internet was built, even issued a worldwide press communiqué saluting the signing of the FTA with Jordan.
“In every single trip abroad, His Majesty meets with business leaders, especially from the IT, pharmaceuticals, fertilizers, and mining sectors,” says Awadallah, who is also the rapporteur of the 20-member, royally-appointed Economic Consultative Council.
The highlight of King Abdullah's work to promote Jordan's IT potential abroad was a meeting with the father of Microsoft, Bill Gates, during last February's World Economic Forum, in Davos, Switzerland. Mentioning that meeting in an article on the Kingdom published in July, The Economist reported: “Gates was charmed by the King and announced that he would be thinking about setting up shop in Jordan.”
It was more than just a thought, obviously. “His Majesty's charisma certainly played a major role in getting the big players' attention to Jordan,” says [email protected] CEO Raed Bilbessi. “But, like the old saying goes, business is business. The big companies realized Jordan's potential — and their own opportunity to capitalize on what Jordan can offer — and have therefore decided to invest in us as a nation.
“We believe that once these big companies realized how serious and determined we are to make IT a reality in our country, they could not but support our efforts since we truly are doing the right things,” Bilbessi added. The first “right thing” that Jordan did was to promulgate and enforce world-class Intellectual Property Rights legislation, which paved the way for this year's accession into the WTO. The second was to focus on education.
“His Majesty has been pressuring the government very hard on education reforms, and now English and computer skills are taught in grade one in public schools,” says Awadallah. “A road, for example, can wait for one year to be repaired. But if we wait on educational reforms, a whole generation will be missing out for one year,” he adds.
Creating a new type of partnership between the public and private sector was also another major achievement in Jordan's IT development drive. “We are doing the right things,” agrees Kawar. “The IT industry is private sector led, in partnership with the government. Our leadership has the vision. Our private sector developed a clear and well-defined strategy. A detailed and specific action plan has been presented as well.”
Industry and government representatives sat together for 10 weeks and, in September, came up with Reach 2.0 — a revised version of REACH, and a demanding, long to-do list, including amendments to key legislation such as the Investment Promotion, Companies, Securities and Labor Laws.
Some amendments are expected to lift the current restrictions in transforming private shareholding companies into public ones — a major hurdle, the Reach proponents say, in the path towards consolidation, as companies normally use their shares as currency in acquisitions.
The so-called “IT package,” or “Reach package,” is expected to be championed by Post and Telecoms Minister Fawaz Zu'bi and Deputy Prime Minister Mohammad Halaiqah within the Cabinet. It should be submitted to Parliament in its current ordinary session, to close in March 2001. “Parliament's agenda is quite packed with laws that have been in the queue for several months,” admits Kawar. “Nevertheless, we believe that the amendments will be given the needed priority and attention. We hope that a team-spirit will prevail among all parties involved, including the Parliament, to work towards one common strategic objective from which everyone stands to benefit.”
The government also announced last week it has finalized a draft on e-commerce and electronic signatures, expected to be included in the package. Zu'bi, the youngest minister in the government of Ali Abul Ragheb and the architect of an innovative plan to turn his ministry into an Info-Com-Technologies (ICT) ministry, is also overseeing the implementation of a national e-government strategy endorsed by the ECC in September. “When you talk about e-government, that means you are serious about administrative reforms,” points out Awadallah, suggesting that, after a years-long and inconclusive debate on administrative reforms, Jordan might now leapfrog directly into e-government.
In addition to continuing to work on implementing Reach 2.0, streamlining, organizing, and boosting the sector, [email protected] also plans another important appointment in 2001: The second Jordan IT Forum will be held right at the heart of the sector's ideal capital. “It is our intention to hold the second Jordan IT Forum in Silicon Valley between the end of May and the beginning of June 2001,” says Kawar. “In the first Jordan IT Forum held at the Dead Sea, the objective was to share with foreign and strategic investors our plans as laid out in the Reach Initiative. We needed their input regarding our strategies and action plans, which were crucial at such an early stage.
“Although the participation was beyond our expectations, nevertheless we hope to reach a larger audience,” Kawar says. According to Bilbessi, “the main purpose is to market our IT sector worldwide through a first-class annual IT forum, which will possibly be held each year in a different continent.” Awadallah summed up an intense, productive year for the IT sector. “2000 was the year in which IT was squarely identified an engine of economic growth with high potential and REACH started being implemented,” he declared. “2001 will be the year when we will start to reap the fruits, and see Reach 2.0 become reality.” — ( Jordan Times )
By Francesca Sawalha
© 2000 Mena Report (www.menareport.com)