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Why Jordan?
Jordan, officially the Hashemite Kingdom of Jordan, is a kingdom on the East Bank of the River Jordan in Western Asia. It borders Saudi Arabia to the east and south-east, Iraq to the east, Syria to the north and the West Bank and Israel to the west, sharing control of the Dead Sea. Much of Jordan is covered by the Arabian Desert. However, the north-western part of Jordan is part of the ‘Fertile Crescent’. The capital city is Amman.
Jordan is a Constitutional Monarchy with representative government. The reigning Monarch is the Chief Executive and the Commander-in-Chief of the armed forces. The King exercises his executive authority through the Prime Minister and the Council of Ministers, or Cabinet. The Cabinet, meanwhile, is responsible to the democratically elected House of Deputies which, along with the House of Notables (Senate), constitutes the legislative branch of the government. The judicial branch is an independent branch of the government.
Modern Jordan is predominantly urbanized. Jordan is classified as a country of "high human development" by the 2010 Human Development Report. Furthermore, The Kingdom has been classified as an emerging market with a free market economy by the CIA World Fact Book. Jordan has Free Trade Agreement with USA and enjoys "advanced status” with the European Union. It has more Free Trade Agreements than any other country in the region.
Jordan has a "pro-Western" regime with very close relations with the United Kingdom and the United States. It is also a major non-NATO ally of the United States since 1996, and is one of the two nations in the region, the other being Egypt, that have diplomatic relations with Israel. It is a founding member of the Arab League, the WTO, the AFESD, the Arab Parliament, the AIDMO, the AMF, the IMF, the International Criminal Court, the UNHRC, the GAFTA, the ESCWA, the ENP and the United Nations. Jordan is also currently undergoing close integration with the European Union and the Gulf Cooperation Council.
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| Qualifying Industrial Zones in Jordan |
 In 1996, the U.S Congress authorized designation of qualifying industrial zones (QIZs) between Israel and Jordan. QIZs allow Jordan to export products to the United States duty-free if the products contain 8% inputs from Israel. The purpose of this trade initiative has been to support prosperity and stability in the Middle East by encouraging regional economic integration. On March 6th, 1998, the United States Trade Representative (USTR) designated Jordan's Al-Hassan Industrial Estate in the northern city of Irbid as the world's first QIZ.
In order for a QIZ article to gain duty-free entry, QIZ factories must add at least 35 percent to the value of the article. This 35 percent minimum content figure can include value added in Israel, Jordan, or the United States. QIZs must encompass portions of Jordan and Israel, though the areas do not have to be contiguous. The immediate saving for an investor in the QIZ is the amount of the U.S. tariff on any specified good. Generally speaking, U.S. tariffs on clothing and textile goods are relatively high, which makes production of these goods in QIZs especially attractive. |
Benefits of QIZ with Jordan
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- Exports from Jordan to the United States grew from $15 million in 1997 to more than 1 billion Dollars in 2004.
- Jordan’s QIZs are the country’s strongest engines of job growth. Jordan estimates that more than 40,000 jobs have been created within its QIZs. Investment in Jordan’s QIZs is currently between $85-100 million and is expected to grow to $180 - $200 million.
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Following the QIZ, The United States and Jordan negotiated a full FTA (Free Trade Agreement) that the U.S. Congress approved in 2001. From January, 2010, the Garment Factories in Jordan began making use of the FTA which freed them from the obligation to buy 8% of their FOB’s worth of goods from Israel at much higher prices to qualify for Duty Exemptions under QIZ. This has helped the garment factories of Jordan to increase their profit margins in 2010.
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Jordan and Garment Industry
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| Jordan was not anywhere in the map of garment exporting countries until the year 1999. The Qualifying Industrial Zones agreement (described below), signed in 1996, began to show results in 1999 with an annual export of $10 million. By 2005, the annual export figure registered a steep climb to $1.3 billion. At that time there were just 120 factories, of which major factories were only 30-40 in the whole of Jordan. But, in 2006, the National Labour Commission of USA moved against 20-30 small factories portraying them as sweat shops and succeeded in closing them down. The volume of exports was affected slightly because of this in the year 2006.
Jordan registered a resurrection in 2007 with the annual export figures touching $1.14 billion. But, again, global recession took its toll and the figures for 2008 and 2009 dropped to $934 million and $748 million respectively. However, 2010 has proved to be a year of revival and the annual exports are to the tune of $1.058 billion, and the figures for CLASSIC FASHION have risen over $118 million.
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| CLASSIC FASHION was established in the year 2003 in Al-Hassan Industrial Estate, the world’s first Qualifying Industrial Zone which was inaugurated on March 6th, 1998. The Estate is in Ramtha in the City of Irbid. |
- Classic Fashion Unit 1
- Classic Fashion Unit 2
- Classic Fashion Unit 3
- Classic Fashion Unit 4
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| Irbid, known in ancient times as Arabella or Arbela, is the capital and the largest city of the Irbid Governorate of the Hashemite Kingdom of Jordan. It has a population of around 660,000, and is located about 70 km north of Amman. The city is a major ground transportation hub between two major cities of the region, Amman and Mafraq.
The Irbid region is also home to several colleges and universities, the most prominent being Jordan University of Science and Technology, Yarmouk University, Al-Balqa` Applied University (Irbid Campus), Irbid National University and Jadara University.
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Garment Industry - Some Background information
| Till the 1980s the retailers of garments in Europe and USA were selling the internal productions of their own countries and the supply from their internal sources were sufficient to meet the demand. In the 1980s the retailers started outsourcing garments as they found that the demand was higher than the supply and that outsourced garments would be cheaper.
By producing garments of satisfactory quality and selling at very competitive prices, the Third World countries started replacing all domestic production in USA and Europe by the end of the 1980s. In the year 2007, USA alone imported garments worth $81 billion. There was no major change in the scene in 2008 with the import coming down to $79 billion. But, in 2009, global recession took its toll and the import figures came steeply down to $70 billion.
A revival in demand was evident towards the end of 2009 and all through 2010. The stocks with the retailers and importers have been completely depleted and they are on a buying spree. All stakeholders are therefore expecting a brighter future in the years to come.
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