Privatization 

In general, the Jordanian economy is private-sector oriented. Accordingly, direct state ownership is relatively small. It is significant only in the mining sector (phosphates and potash) and in public utilities (electricity, water, communications, and bus, railway and air transport). In 1992, before the privatization program began, the proportion of GDP from public sector establishments, excluding producers of government services, reached only 14%. The private sector share of GDP in 1992 was concentrated in construction (100%), manufacturing (94%), and in financial, business, community and personal services (95%).

However, Jordan recognizes that the continued recovery and future growth of the economy depends primarily on a more proactive role of the private sector and a redefinition of the role of the government in the economy. Therefore, the privatization program aims at enhancing enterprise efficiency through the sale of shares to technically advanced strategic investors, deepening the financial market through public share offerings, and reducing subsidies and consolidating public finances.

A series of policy initiatives were launched to downsize the government's direct participation in the productive sectors and allow the private sector to manage these sectors in a more efficient and cost-effective manner. In order to facilitate the process in a speedy and transparent manner, an Executive Privatization Unit (EPU) has been established at the Prime Ministry to: coordinate the preparation of the divestiture transactions within an overall framework based on comprehensive guidelines and regulations; manage the technical experts and consultants; manage the marketing efforts of enterprises being divested; execute transactions; negotiate with concerned parties, and disseminate information regarding the progress of the program.

The privatization program is being implemented in two phases. During the first phase, several entities within the telecommunications, tourism, energy, industrial, transportation, mining, and water sectors are at some stage of privatization. The second privatization phase looks at all the restructuring options available for privatizing the National Petroleum Corporation, Arab Potash Company, Jordan Phosphate Mines Company, Royal Jordanian Airlines, Jordan Investment Corporation's shareholdings, and the Postal Savings Fund.

The First Phase

• The sale of 40% of the Jordan Telecommunications Corporation to a strategic investor is currently underway with the participation of an international financial advisor. The transaction should be completed in early 1999.
• The government has sold its shares in several hotels.
• A 33% divestment of the shares of the Jordan Cement Factories has been authorized by the Board of Directors of the Jordan Investment Corporation.
• A privatization unit within the Ministry of Transportation has been established to privatize the Public Transportation Corporation.
• The feasibility of transferring the ownership of the Aqaba Railway Corporation is being evaluated, and a concession may be awarded to a Build Operate Transfer (BOT) option in 1998.
• The government is currently evaluating privatization options for the Port of Aqaba and the Jordan Investment Corporation.

The Second Phase

• A work plan for corporatizing and the privatizing the drilling operations of the National Potash Company (NPC) has been submitted to the government for approval.
• Proposals for selling the government's shares in the Arab Potash Company and the Jordan Phosphate Mines Company have been submitted to the government for evaluation and approval.
• A study of the strategic options for the privatization of Royal Jordanian Airlines has been completed and submitted to the government for approval.
• A proposal to divest from the Postal Savings Fund, with a management contract to be awarded to a commercial bank, has been submitted to the government for review.