< Previous124 NOVEMBER 2018 SI T E S E L E C T IO NAqaba Emerges as a magnet for investment in Jordan.Occupying a historic position in the Red Sea region, the ancient town of Aqaba begins in a grove of date palms abutting the crystal blue waters of the Gulf of Aqaba. From there it ascends toward rugged, red mountains that flank a small plain. Jordan’s only port city, Aqaba has for centuries been a vital crossroads connecting trade routes linking Asia, the Middle East and Europe.In the 17 years since it was launched, the Aqaba Special Economic Zone (ASEZ) has blossomed into a regional trade hub. A vision of His Majesty King Abdullah II, the ASEZ is a semi-autonomous special economic zone within the Kingdom of Jordan, and a “test case” for how INVESTMENT REPORT:AQABA, JORDANWith a trade history going back to 4000 B.C., Aqaba has flourished as a Special Economic Zone.Photo courtesy of ASEZA S I T E S E L E C T I O N NOVEMBER 2018 125a streamlined, business-friendly environment can create jobs and promote economic growth. In a recent speech, the King emphasized:“This is Jordan’s goal: re-launching growth and investment while deepening reform and inclusion. For this end, public-private partnerships are our building blocks. Today,” he continued, “Jordan’s forward-looking economic growth plan focuses on high-value-added sectors across the country. We have identified close to $15 billion in public-private partnership opportunities in fields as diverse as renewable energy, ICT, infrastructure, construction, healthcare, tourism and financial services. Whether it is free-trade-access manufacturing or green economy projects, or professional services, or an entirely new opportunity that you create: Jordan is open for business.”The King’s special interest in the Aqaba project has been key to its success.“The support of His Majesty King Abdullah II has been instrumental to Aqaba’s ability to flourish as a model of decentralization,” says His Excellency Nasser Shraideh, Chief Commissioner of the Aqaba Special Economic Zone Authority (ASEZA). “The Zone,” says Shraideh, “aspires to reclaim its historical role as a trade center and strengthen its position as a transport and logistics hub serving Jordan and the region.”The Special Economic Zone covers 145 sq. miles (375 sq. km.) of land plus the entirety of Jordan’s 17-mile (27-km.) coastline. Its law and regulations — including low flat-rate income tax, zero tariff and import taxes, no foreign equity restrictions and multi-use commercial, tourist and residential zoning — are designed to facilitate rapid expansion. ASEZA, responsible for the management and development of the Zone, is committed to providing:• A one-stop investment center to facilitate business start-up and smooth operations.• A world-class business environment that maximizes private sector participation in a tax-advantaged and continuously His Majesty King Abdullah II visits Aqaba’s Orbit Aluminum Industries at Aqaba International Industrial Estate.Photo courtesy of ASEZA126 NOVEMBER 2018 SI T E S E L E C T IO Nimproving investment climate.• A model approach to governance and environmentally sustainable development.Industries located within the ASEZ benefi t from Jordan’s preferential access, for products of Jordanian origin, to members of the World Trade Organization and Arab countries. Products manufactured in Jordan enjoy quota-free access to the U.S. market through the Free Trade Agreement and to the European Union through the Euro-Jordanian Association Agreement.Since the establishment of the Special Economic Zone, investment attracted to the ASEZ has reached about $ billion, far surpassing the $ billion goal that was initially targeted for . is surge in capital has eff ectively turned the desert outpost into a bustling city, with Aqaba’s population more than tripling from the late s, increasing from , to over , people today and paralleled by increasing job creation and living standards.Being the second-largest Red Sea port, Aqaba is an international city whose uniqueness derives largely from the fact that it is a multi-faceted economic zone; Aqaba’s Land Use Master Plan envisions a mix of percent tourism, percent logistics and percent industry. ASEZA aims to develop the Special Economic Zone as the epicenter of best practices in Jordan and throughout the Middle East. is is Jordan’s goal: re-launching growth and investment while deepening reform and inclusion.”—HM King Abdullah IILogistics yards and centers within ASEZ S I T E S E L E C T I O N NOVEMBER 2018 127AQABA’S ASPIRATIONSHis Excellency Nasser Shraideh is Chief Commissioner of the Aqaba Special Economic Zone Authority. H.E. Shraideh was born in Irbid in 1967 and obtained his first and second degrees in economics from Yarmouk University in 1988 and 1994. Having served in a variety of government posts, he was appointed chief commissioner in July 2016.In late October, Mr. Shraideh addressed the annual Trans Middle East Conference and Exhibition, held at the Intercontinental Aqaba Resort. Below are excerpts from his remarks:“The support His Majesty King Abdullah II grants Aqaba is unparalleled. This has had a tremendous effect on Aqaba’s ability to flourish as a model of decentralization …“Jordan, through Aqaba, looks forward to playing a bigger role in the region by offering a world-class multi-modal transport and logistics network, competitive investment legislative framework and true public-private partnership …“Despite all the instability and terrors that neighboring countries tragically went through, Jordan’s unwavering commitment and belief in a better future, a peaceful and prosperous one, are evident in the Kingdom’s nonstop efforts to build for the future. Not only Jordan’s future, but the Middle East’s as a whole …“Today, Aqaba Ports Community consists of 12 terminals stretching over 32 specialized berths, developed, rehabilitated and modernized as part of a comprehensive strategy to increase the Zone’s competitiveness …“With additional zones being developed and offered for investors, we have set ambitious strategic goals for the year 2025. By 2025 we aspire to:• Increase the number of containers handled at Aqaba Container Terminal from 797,000 TEU in 2017 to 2 milllion.• Increase the general cargo handled at Aqaba ports from 20 million tons in 2017 to 40 million tons.• Increase the number of logistics villages from five to 10 and the number of industrial estates from three to six.“Our aspirations for Aqaba are big, and Aqaba has much to offer in terms of investment opportunities.”H.E. Nasser Shraideh, Chief Commissioner, Aqaba Special Economic Zone Authority128 NOVEMBER 2018 SI T E S E L E C T IO NAqaba International Industrial Estate counts more than 100 investors in areas such as metalworking, renewable energy, food production, garments and plastics.Photos courtesy of PBI Aqaba“ e idea is to be a hub that is unique to the area,” says Ghassan Ghanem, CEO of the Aqaba Development Corporation (ADC), ASEZA’s central development arm. “Our standards are diff erent,” Ghanem tells Site Selection, “not only in tourism but also in logistics and industry. We want to exceed international standards by developing state-of-the art facilities in ports, industry and real estate development.”ADC, owned jointly by the government of Jordan and ASEZA, manages and leads development of Aqaba’s seaports, King Hussein International Airport (KHIA) and strategic parcels of land. It is tasked with operating and expanding key facilities, building new infrastructure and creating necessary business enablers including the development, modernization and expansions of Aqaba Ports Community and KHIA, as well as strategic logistics and transport projects. e Port of Aqaba has undergone major modernization and expansions and KHIA has been upgraded to the tune of $ million.Setting up Shop e number of companies setting up shop in Aqaba is growing steadily. A key area for industrial development is the ,,-sq.-ft. (,,-sq.-m.) Aqaba International Industrial Estate (AIIE), run by PBI Aqaba, a private company. Established in , AIIE off ers open lots, fully serviced land and fi nished buildings for lease or sale. Investors benefi t from ASEZ’s regime of fi nancial incentives.“ e government owns most of the land in this region, and one of the services we’re providing is to add infrastructure and improve land belonging to the government and then selling it or renting it to investors,” says Sheldon Fink, CEO of PBI Aqaba. “But our major job is a service job, which is to facilitate the investors coming here through licensing and permitting, fi nding local partners, fi nding local suppliers, sometimes fi nancing. We’re really a service company that’s attached to a real estate function.”Total investment in AIIE is in the range of $ million, with an associated , jobs and more than diff erent companies. In two S I T E S E L E C T I O N NOVEMBER 2018 129 e Zone aspires to reclaim its historical role as a trade center and strengthen its position as a transport and logistics hub serving Jordan and the region.”− H.E. Nasser Shraideh, Chief Commissioner, Aqaba Special Economic Zone Authority130 NOVEMBER 2018 SI T E S E L E C T IO Nyears, Fink expects to be up to about $1 billion of investment and 6,000 jobs. The volume of business in and out of the estate, says Fink, is between $400 million and $500 million a year.In 2015, PBI Aqaba signed a memorandum of understanding with China’s Shenzhen Chamber of Investment to develop and operate an industrial and logistics estate as an expansion of AIIE. The initial investment of $700 million is to create some 2,500 jobs. “We’ve moved into international the past three years,” says Fink, “and right now, that’s the most active part of what we’re doing. Among others, we have Chinese, we have Germans, we have Canadians, Americans, Iraqis, Syrians, Saudis, Israelis, Russians and Turks.”AIIE’s investors include Orbit Aluminum Industries, a Canadian company; Wiosun for Renewable energy, a German/Iraqi venture; Sydney Garments, a Hong Kong/Indian company; and Bareeq Li Tiknolojia Tarsheed Al-Taqah Co., an LED lighting company based in Shenzhen, China. “We are very happy we have chosen to be in Aqaba International Industrial Estate,” says Mumtaz Daaboul, CEO of Orbit Aluminum Industries, citing “continuous support” from AIIE.“We chose Aqaba because of its unique location in the Middle East,” says Adele Yan, managing director of Bareeq. “With its free trade agreements with the U.S., EU and other Middle East countries, we believe that having our advanced LED products made here can help us expand our market all over the world. Costs here are reasonable compared to China, which makes our ‘Made in Jordan’ products more price competitive in the market.”AIIE is located about six miles (10 km.) from Aqaba Container Terminal, 11 miles (18 km.) from the general cargo port and less than a mile from the airport. PBI Aqaba currently is looking at two additional pieces of land for expansion. “There’s a big future here,” says Fink. “We are Aqaba Container Terminal (ACT) is serviced by the world’s largest shipping lines.Photo courtesy of ASEZA S I T E S E L E C T I O N NOVEMBER 2018 131132 NOVEMBER 2018 SI T E S E L E C T IO NThe Ports of Aqaba consist of 12 terminals stretching over 32 specialized berths.Photo courtesy of ASEZA S I T E S E L E C T I O N NOVEMBER 2018 133increasing our staff and we’re talking to much bigger customers than we used to talk to.”Gateway to the LevantThe world is taking note of Aqaba’s rise. In late October, the city hosted the 15th Trans Middle East Conference and Exhibition, the region’s premier logistics gathering. Highlighting the city’s emergence, the two-day conference included some 400 senior government officials, transportation and logistics industry principals, terminal operators and representatives of leading shipping companies. Speakers included Dr. Yossi Sheffi, director of the MIT Center for Transportation and Logistics.“Aqaba has the potential,” said Sheffi, “to be a major hub of international flow of goods where value-added activities create a large number of jobs and help the economic growth of Jordan and the region. Aqaba sits in a geographically strategic location between Asia and Europe and is central to the Middle East.”Wolfgang Lehmacher, head of supply chain and transport industries at the World Economic Forum, another speaker at the conference, believes that Aqaba’s role could transform the flow of goods throughout the Middle East.“In today’s fractured but also more balanced world of global trade and commerce,” Lehmacher said, “the importance of geographic regions and their connectivity, capabilities and ability to collaborate with other markets has risen significantly. The way Jordan is going to ramp up its logistics platform will not only impact its own position, but the future role that other parts of the region might be able to play.”The Kingdom of Jordan represents a bastion of stability in a region that includes Israel, the Palestinian territories, Saudi Arabia, Syria, Iraq and Egypt. As a testament to the city’s resolve, Aqaba’s expansion has continued apace despite the years-long closures of Jordan’s borders to Syria and Iraq, the latter one of the city’s main trade routes.Aqaba general cargo port, industrial terminal and phosphate terminal.Photo courtesy of ASEZANext >