I wish to update on the London Initiative, a major international conference that the UK and Jordan will co-host here in London on Thursday, 28 February 2019. The event will convene senior leaders from international governments and the private sector, and will champion Jordan’s ambitious plans for economic transformation as set out within King Abdullah’s Vision 2025.
Jordan’s stability is inextricable from the UK’s global interests. The UK sees Jordan as a key ally, an island of stability at the heart of a turbulent Middle East, and a partner with whom we have enjoyed a mutually supportive relationship for over a century. Jordan’s stability matters to the region; it has been a long-time host to the victims of its neighbours’ conflicts – some 670,000 refugees of the Syria crisis have made their home in Jordan. And it matters to the UK. Jordan has similarly played host to approximately 6,000 UK troops annually for essential training. Jordan matters as a stable buffer against encroaching threats posed by maligned influences within the region. It was through the vital use of Jordan’s airspace that 5,000 UK aircraft flew in the fight against Daesh.
But Jordan’s resilience is being tested – not just by the influx of refugees from Syria that it has sheltered with characteristic generosity, but it is also being tested by long-standing economic challenges which the global financial crisis only exacerbated: a surge in the cost of energy following the Arab Spring; the loss of access to key export markets in Syria and Iraq as conflict brought a halt to trade flows; declining remittances and investment following the economic slowdown in the region; and rising interest rates that are pushing up the cost of borrowing and debt repayments.
Jordan’s efforts against these factors have been valiant. Successive governments have implemented vigorous fiscal adjustments to rein in the size of the public deficit, at times testing the boundaries of social contract which has held Jordan together since its independence in 1946. And yet, despite apparent political costs, Jordan has persevered, demonstrating a resounding commitment to economic transformation. And not without success - exports increased in 2018, supported by the re-opening of the border with Iraq, while tourism has grown strongly, and credit to the private sector has grown at solid rates for the third consecutive year. However, as Jordan confronts these challenges, the success of its new fiscal policies and macroeconomic reforms still relies on the backing of the international donor community and an upshot in interest from international businesses.
In November 2017, the Prime Minister announced in Amman that the UK would be entering into a new long-term Partnership to support and strengthen Jordan’s resilience in line with HM King Abdullah II’s Vision 2025 for economic transformation. The partnership is framed as a ten-year-long relationship between the UK and Jordan recognising Jordan’s importance to the UK today and offering a ‘whole of government’ effort to support the country’s resilience. This is why we are holding the London Initiative, an international conference that will rally the international development and finance communities around a new approach to supporting Jordan. An approach that pivots the UK’s support for Jordan away from humanitarian-focused grants and towards developing sustainable economic growth, led by private sector investment and helping Jordan to continue to provide for its population, including its young people, women and refugees. That is not to say that the UK’s humanitarian support for Jordan ends here. The UK remains committed to its humanitarian support for Jordan, including to Syrian refugees, recognising the increased pressure a rising population puts on community services. However, the conference will rally the donor community around a new model for engagement in Jordan – one in which Jordan’s advances in reforms will unlock greater international financial support.
The London Initiative will offer an opportunity for the Government of Jordan to demonstrate its commitment to economic transformation on an international platform, and will present Jordan credibly to international businesses as an opportunity for investment. In return, we will deploy an integrated UK ‘whole of government approach’ providing technical expertise and establishing peer-peer partnerships from a range of UK Government departments. For example, HMRC is already working with the Government of Jordan’s Income Sales and Tax Department to design new methods of limiting tax avoidance, exposing tax havens, and improving data collection to better identify leakages in the Jordanian system – and the Department for Education, the Department for Business, Energy & Industrial Strategy, and the Bank of England have additionally offered partnerships of their own. But the London Initiative will also be a global approach. In keeping with Global Britain, we, the UK, will use the full extent of our convening power to leverage global financial and policy backing behind Jordan’s reform Vision.
Jordan is ambitiously transforming its economic model, reforming its labour, and taking the right steps to encourage vigorous private sector growth. At the core of its objectives, the London Initiative sets out to champion the progress already made in all of these areas.
Firstly, the Initiative will be the driving force for the Government of Jordan to present a robust and realistic strategy for unlocking economic growth, underpinned by practical demonstration of its commitment to a package of necessary macroeconomic reforms, including those aimed at attracting private sector investment and increasing women’s participation in the workplace. Second, the Initiative will invite partners, including the G7 and GCC countries, to promise collective political backing for this vision, following the UK’s lead on an initiative linking aid to reform-implementation and unlocking larger volumes of concessional and private finance. Finally, the Initiative will also be a showcase for some of Jordan’s most exciting, investment ready sectors – particularly tourism, infrastructure, ICT and professional services – of which British businesses are already benefitting.
Britain, as a trading nation, relies on strong markets to thrive and through this conference, we’re helping support an important ally’s stability whilst building a market of the future. The event will initiate new public-private dialogues championing the Government of Jordan’s pipeline of infrastructure projects ready for investment, new funding vehicles to assist their financing, and their commitment to investment climate and ease of doing business reforms.
As well as bringing together CEOs, international investors and heads of state from around the world, the conference needs to have an impact that reaches the ordinary people on the streets of Jordan. In particular, it must provide opportunities for women and young people. Jordan’s young, educated and aspirational population has helped position the country as a pioneer in ICT, start-ups and creative industries. All of these, alongside the government’s commitment to reforms, are reasons to invest in Jordan.
The London Initiative on 28 February will be a staging post within the UK-Jordan partnership and the starting point of a long-term growth trajectory that will increase foreign investment and create high-quality jobs for all Jordanians. It should also provide a tangible demonstration of the UK’s leadership on the international stage and will be one of the clearest examples of the potential of Global Britain.
Jordan matters to the UK and is a natural partner for a Global Britain, a steadfast ally on the frontline of conflict and instability. The conference will be a demonstration of our strong relationship and will pioneer a new model for development in a vulnerable Middle-Income Country, anchored squarely in UK national interest.