Risk Management in Transport PPP Projects
In the Islamic Countries
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5.5.2. Strategy and policy
In a Middle East troubled by conflicts and tensions, during the last decades Jordan’s
constitutional monarchy has emerged as an anchor of relative stability. Even though
government changes are frequent (ten prime ministers have served between 2005 and 2019),
the country does not experience major social and political turbulences. While in 2011 street
demonstrations abruptly transformed the political landscape of several Arab countries andwere
followed in some cases by armed conflict, protests in Jordan did not escalate to the degree
reached elsewhere. Before and after the Arab Spring, Jordan has been able to build a strong
reputation as a haven of safety for the refugees from neighboring countries escaping the Israeli-
Palestinian, Iraqi and Syrian crises, who have contributed to the country’s population growth.
From an economic perspective, the country’s monetary policy has been instrumental in
providing stability and a solid financial framework reducing uncertainty for national and foreign
stakeholders. In particular, pegging the Jordanian Dinar to the US Dollar has contributed to
avoiding inflation issues (which have plagued countries in the same region) and ensured overall
solidity of the economic system.
Traditionally, regional instability has however represented a hurdle to the country’s economic
development, together with its lack in natural resources, especially as regards water supplies
and oil (for the latter, Jordan completely relies on imports).
In order to boost economic growth, after his accession to the throne in 1999 King Abdullah II
launched a set of structural reforms and promoted liberalization and privatization policies,
which had partly already been inaugurated under the reign of his father, King Hussein. Since
then, Jordan has showed continued reform effort and liberal economic policies have contributed
to high economic growth during the first decade of the XXI century, before being slowed down
by the global economic crisis and the geopolitical consequences of the Arab Spring.
From 2000 onwards, PPPs have represented a pillar of Jordan’s policies in different sectors of
the economy. For water, wastewater and energy infrastructures in particular, the country has
widely resorted to PPPs as a way to address budgetary constraints and in order to benefit from
the private sector’s technical expertise. So far transport is not among the economic sectors
for which PPP schemes have been used the most.
According to Jordan’s Economic Growth Plan 2018-2022, transport contributes to about 9% of
the GDP. The government recognizes it as a vital sector for the Jordanian economy and as a
crucial component of the daily life of Jordanians. Today, the road sector represents the backbone
of the country’s transport system, despite being characterized by weak maintenance. No toll
roads have been implemented yet, partly as a result of acceptability issues, in a country where
personal cars and taxis remain the preferred means of transport. Both railways and public
transport are still underdeveloped. Amman’s international airport, named after Queen Alia, is
the country’s main entry point for tourists and developing into a significant hub for the whole
region. Finally, Jordan’s only seaport is located in Aqaba.