Khaberni - Various governments have placed a significant emphasis on direct foreign investment in recent decades due to its positive role in stimulating the economies of countries, whether developed or developing. The United Nations Conference on Trade and Development defines direct foreign investment as a long-term investment based on establishing economic projects fully or partially owned and managed by the foreign investor within the host country, whether the investor is an individual, institution, or company. For an investment to be considered "direct," the foreign investor's ownership must exceed 10% of the capital or voting power in management.
Direct foreign investment is characterized as a long-term investment based on owning real productive assets, not speculative financial investments. It transfers knowledge, modern technology, skills, and expertise, and opens doors to international markets for the host country. All these factors are needed by the Jordanian economy in its phase of transformation and modernization.
In this context, the Jordanian Strategy Forum confirms that foreign investors are increasingly playing a role in providing public services globally, contributing to finding solutions for significant challenges such as climate change, improving the business environment, developing industry standards, and supporting infrastructure in local communities. This type of investment enhances domestic savings, creates jobs, reduces unemployment, supports economic restructuring, and contributes to desired social welfare by injecting capital into the local market.
It is apparent that attracting direct foreign investment reduces the government's need to borrow from international bodies or other countries, with all the ensuing commitments, terms, and restrictions, in addition to the cost of installments and interest. Jordan also possesses natural resources that can be better exploited through this investment, enhancing competitiveness and marketing national wealth.
According to statistics from the Central Bank of Jordan, the volume of direct foreign investment in 2024 reached about 1.160 billion Jordanian dinars, down from 1.424 billion Jordanian dinars in 2023 by a decrease rate of 18.5%, while it was 621 million Jordanian dinars in 2019, and 678 million Jordanian dinars in 2018. This fluctuation is attributed to geopolitical factors surrounding the region.
Therefore, based on royal directives, the government must address the challenges of declining flows of direct foreign investment by developing legislative, regulatory, and technical frameworks in line with the latest international standards and enhancing the investment environment to make it more attractive. It also requires providing accurate information to investors from relevant bodies, monitoring Jordan's ratings in relevant global indices, which contributes to reducing dependence on external borrowing and curbing the escalation of public debt, achieving competitiveness, and translating royal visions into stimulating investment.
