For Kurdi and the employees at
the Century Standard Textile plant, one of several that manufacture
clothing for top brands like Calvin Klein, Victoria’s Secret, Nike and
Reebok, the new record was a source of personal pride”.It’s also
the sign of the success of a key economic prize from Jordan’s peace
with Israel. The factory is one of dozens in Jordan’s Qualified
Industrial Zones, where companies that use a percentage of Israeli
inputs can export duty-free to the United States. The QIZs, as they are
known, have become the strongest engine for Jordan’s economic growth ..”Peace
with Israel has paid off,” Kurdi said. “It made us so busy getting
clothing to Americans that it’s hard to keep up with the demand.” ..But more than 10 years after the QIZs’ creation, Jordan is struggling to ensure that the general public feels the benefit ..The
QIZs have generated 36,000 jobs, but 75 percent have gone to Asian
workers, mainly from Sri Lanka, India, Bangladesh and China, because
Jordanians lack the necessary experience, said Abdalla Jahmani, the
director of the QIZ in the northern city of Irbid. While 109 companies
and subcontractors have opened in the 13 QIZs around the country, 80
percent of them are owned by non-Jordanians, mainly Arab and Asian
investors using the QIZs to gain access to the U.S. market ..”We
asked the government to shut them down because they’re not providing
bread and butter for Jordanian families,” said Jamil Abu Bakr, a
spokesman for the Muslim Brotherhood Movement, Jordan’s largest
opposition group ..Government officials, however, maintain that
QIZ firms — mainly textile factories — provided jobs for 9,000
Jordanians so far, a significant number considering that many lacked
the professional skills for the fledging industry. Thousands more are
being trained and will take over from Asian workers this year, said
Elias Farraj, an adviser at the Jordan Investment Board ..Farhan
Ifram, chairman of Jordan’s textile exporters’ association, said the
QIZs have also boosted Jordan’s hard currency reserves through exports ..”Workers
and factory owners are also spending their money in Jordan on
utilities, rent, services, transportation and shipping, and customs,
which is benefiting many economic sectors,” he said ..Spreading
the wealth from the QIZs is important, since the United States and
other proponents of the program have touted such economic benefits as a
potential enticement for other Arab states to follow Jordan’s path in a
Mideast peace. Egypt is the only other Arab country that has signed a
peace agreement with Israel, in 1979 ..The QIZs began to develop
just two years after Jordan signed its historic treaty with Israel in
1994. The U.S. Congress backed the establishment of the zones in the
country to boost Mideast stability through economic integration ..The
agreement was aimed at alleviating Jordan’s economic difficulties that
in part stemmed, at the time, from $7.3 billion in foreign debts and
rampant unemployment ..In the zones, factories manufacture
products with 8 percent contribution from Israel, along with a
35-percent value added content from Jordan, giving them duty free
status in the U.S. Egypt concluded its own QIZ deal with the United
States in 2005 ..Exports from the Jordanian QIZs to the U.S. have
shot up 100-fold, from $15 million in 1997 to peak at $1.5 billion in
2006, or roughly 20 percent of the country’s gross domestic product ..The
zones have also brought Jordan and Israel closer economically, even if
tensions remain stumbling blocks because of the faltering peace process ..Over
the past decade, Israel — which previously was the main Mideast textile
exporter to the U.S. — has helped its Arab neighbor develop greater
skills and access in the textile industry. Ten Israeli factories opened
shops in the QIZs. Exports from the QIZs go through Israel’s
Mediterranean port of Haifa to reduce shipping costs from Jordan, which
has only one sea outlet via the Red Sea ..The Israeli training has
helped Jordan’s new garment industry take hold. Arab, Chinese and other
Asian manufacturers, eager to export to the world’s largest consumer
market, have also entered the QIZs with millions of dollars in
investments, helping it weather the global downturn ..”I have 20
percent more orders than in 2007, which means I’m fully booked until
October,” said Eric Tang, chief executive officer of a joint Hong
Hong-Indian venture with a factory in Al Tajamouat Industrial City ..Now
Jordanian industry is hoping for an even greater boost from new, wider
free-trade deal with the United States which went into effect Jan. 1.
The agreement lifts U.S. duties from all products manufactured in
Jordan, even outside the QIZs, though the zones still offer an
advantage in infrastructure and ease of working through bureaucracy ..Jordan
has also struck similar trade deals with Canada and Turkey, said Ifram,
the chairman of the textile exporters’ association, adding that a
planned 2011 accord with Turkey will push Jordanian products to
Europe’s lucrative and diverse market ..The QIZs were also
advantageous to Israel, hiking its exports to Jordan 2.5 times from $66
million in 2001 to nearly $160 million last year — even during
heightened political tension over the Israel-Palestinian conflict ..”It’s
a success story, which other Arabs should learn from,” said Gabby Bar,
an Israeli trade ministry official who c-chairs Jordan’s QIZs .
Date:4/14/2010
Source: