Jordan reveals US-backed strategy to boost its Red Sea coastline economy

The plan seeks to position Aqaba as a destination for tourism and investment

The latest proposals seek to position Aqaba as a destination for tourism and investment. Reuters
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Jordan revealed a US-backed strategy aimed at growing investment in its Red Sea coastal city of Aqaba on Wednesday, with an emphasis on environmental protection, as the country battles the economic effects of the war in Gaza.

The kingdom is one of the top three recipients of US aid and has a defence pact with Washington. Consecutive US administrations have pledged support for Jordan, which has a peace treaty with Israel, to maintain its stability in the region.

Richard Chen, an official at the US Agency for International Development in Amman, said that Washington played a significant role in developing the strategy as part of its support for further economic reforms in Jordan.

“Aqaba is Jordan's gateway to markets and to the global economy,” he said at the launch of the 2024-2028 Strategic Plan of the Aqaba Special Economic Zone Authority, held at Ayla, one of the main property developments in the city.

The Jordanian economy has been stagnant for more than a decade.

The International Monetary Fund expects it to grow by 2.4 per cent this year, compared to 2.6 per cent in 2023. The fund attributed the economic slowdown towards the end of last year to the war in Gaza, which began on October 7.

The war has decreased tourism to Jordan and has hindered business appetite in the region.

The proposals seek to position Aqaba as a destination for tourism and investment. Previous plans have been announced but officials said the one revealed on Wednesday is different because it prioritises protecting the environment.

Aqaba's marine life has been harmed by large amounts of fishing, as well as damage from shipping or oil spills. The strategy aims to end the degradation of the coral reef on its 27km shoreline.

Nayef Al Fayez, head of the Aqaba Special Economic Zone Authority, said that the city's exports would suffer if environmental protection laws are not put in place.

If environmental protection laws are not applied “no one will be able to export anything from Aqaba”, Mr Al Fayez said.

About 300 projects aimed at attracting tourism, trade, and improving public services are set to be announced.

They will remain separate from the mega projects the government hopes to build in Aqaba's water and energy sectors with grants and financial guarantees from western donors.

Officials did not provide exact figures for the size of the projects or how much investment they are expected to generate.

In 2001, following instructions from Jordan's King Abdullah II, the government turned part of Aqaba into a special zone with lower taxes than the rest of the country.

Foreign investment fell sharply from a $3.6 billion peak in 2006 to $1.1 billion in 2022 – the last year of available UN data.

Updated: June 07, 2024, 10:04 PM