|ASEZA five years on !|
|As the Aqaba Special Economic Zone Authority (ASEZA) celebrates its fifth anniversary this month, the potential for further growth in investments and development projects has been evidently boosted by the economic activity that has evolved over the past five years.
The zone received investments to the value of $500 million with over $1 billion additional investments by 2008. ASEZA officials predict the area would host $6 billion in total investments by the end of 2020 that would turn Aqaba’s 27-km beach into a Jordanian Cote d’Azur.
Investments have directed mainly the development of infrastructure, industrial and commercial areas. This is not to forget the fact that these projects secure tens of thousands of jobs for Jordanians. Significant investments in tourism, hospitality and leisure projects are underway in the Red Sea city, where over $1.5 billion have been allotted for the next five years. “ASEZA was initially set up to create a sustainable economic growth at the southern part of the Kingdom, by developing a competitive environment for local, regional and international investments and upgrade the quality of living standards for its people,” said Nader Dahabi, ASEZA’s chief commissioner.
The Authority launched last week a series of missions to market Aqaba, beginnning with “Aqaba: Endless Opportunities” that was held in Amman for three days. The event featured workshops and seminars which tackled present and future investments, logistics and services for trade and industry. Of the projected touristic sites scheduled for Aqaba, Tala Bay, the Marina Town, Ayla Oasis and the Gateway are four projects that have the potential to turn Aqaba into a leading competitive entertainment and leisure magnet.
The $500 million Tala Bay project, Jordan’s first integrated resort and residential community, is already under construction, and occupies an expanse of more than two million square meters. Along with Marina Town, the project would offer 5,000 hotel rooms in addition to entertainment and sports facilities. The same goes for the $700 million Ayla Oasis on Aqaba’s north beach, where five hotels, a marina village plus 3,000 housing units, an artificial lagoon, and an 18-hole golf course would be ready within six years. The development projects are part of the ASEZA’s 20-year master plan, which was launched in 2001. About half of the $6 billion investments projected for the coming two decades would go to tourism, while the other half is divided between industrial and services sectors.
A brief walk around Aqaba’s streets would the changes that took place over the past four years, as scenes of modern commercial areas and infrastructure spread all over the Red Sea city and featured prominently but with moderate business activity. Fresh shopping malls and markets are also available, including the “City Center” that is located at Aqaba’s northern entry and comprises more than 150 retail businesses displaying duty-free shops, restaurants and entertainment outlets. Shopping malls are quite a few in Aqaba; some of which are still under construction and would be ready later this year. Dahabi said that many of the international merchandise companies have rented shops in these malls, with the target eventually to attract more than $50 million in investments by 2010. He asserted that it would not be easy for ASEZA to transform the current realities on the ground at once, as much work is needed to bring about a real economic and social growth in the city.
Dahabi pledged that residents of Aqaba would certainly “feel the change” once the development projects are concluded. All investments in Aqaba are duty free, with a 5 percent income tax levied on all businesses except banking, insurance and land transport that are subject to the prevailing income tax. Exports made through Aqaba are exempted from duties and taxes as well. All commodities are also exempted from the sales tax, except for 12 selected end-consumer goods that include electric appliances and alcohol in addition to hotel, restaurant and car-rental services, all of which are subject to a 7 percent sales tax. ASEZA’s revenues last year from taxes and duties reached JD 18.6 million, and are expected this year to almost double. About 45 percent of ASEZA’s revenues go to the government.
Dahabi alluded to a number of development projects that aim at enhancing social development among the city’s residents. He mentioned the JD 21 million Karama project, scheduled to be finalized by mid-2007, for the construction of residential areas to house the low-income group inhabitants in Aqaba. Another one is located at the northern part of the city where families have lived in corrugated tin-roofed houses. The Aqaba Development Co (ADC) was established in February 2004 to ensure a balanced development in the city, both socially and economically.
The company is fully owned by the public sector, with ASEZA claiming 50 percent of its shares. It aims at accelerating the development process in Aqaba by mobilizing all available financial and human resources. Imad Fakhoury, ADC’s chairman, said the company is working “through a clear strategy that entails mechanisms to help in marketing the city on regional and international scales.” Fakhoury pointed that the company started its operations by enhancing the quality of services at the Aqaba seaport, and its wedged commercial congestion that hindered the flow of goods to and from Jordan over the past year.
The Danish APM Company is now running the seaport since June 2004, and helped to ease the jamming of containers there by restructuring the port’s operations and infrastructure. Because of the congestion at the seaport, Fakhoury said the average waiting time for each cargo ship to unload at Aqaba was as high as 129 hours in January 2004, and declined massively to about 50 minutes one year ago. “We believe the Aqaba seaport plays a key role in enhancing the economic development since it is mainly used in exporting and importing goods for the Kingdom,” Fakhoury said. He noted that all the maritime companies would cancel their congestion fees on cargoes to Aqaba by the end of March, as many of them have already did since the beginning of this year. Once this decision is made, Fakhoury said it would save more than $80 million on Jordan’s economy.
Besides the touristic and commercial projects, ADC also takes part in developing social and educational projects, including the American University in Aqaba that would start operations by 2009. The university will be built on an area of 250 dunums close to the seashore, and catering to some 6000 students. Both Dahabi and Fakhoury called on the private sector in Jordan to make the initiative and build business partnerships in Aqaba. “We want the private sector to take part more progressively in the development process in Aqaba. It did well in the past through touristic and entertainment parks, but more is needed on the ground. With mutual cooperation, we can turn Aqaba into Jordan’s regional hub for business development,” Fakhoury anticipated.
Amman,03 07 2005