Al-Dustour Center for Economic Studies – Hala Abu Hijleh:

The financial markets and services sector contributes strongly to the national economy in all its sectors, in addition to its primary role in terms of savings, providing financing and the comprehensiveness of the service it provides.

The financial markets and services sector includes 7 sub-sectors: banking, insurance, capital market, financial leasing, microfinance, financial technology, banking and money transfer, which gives it a great advantage in the future economic movement in general.

The market and financial services sector was one of the important and main sectors with all its sub-sectors that participated in the economic workshop organized by the Royal Court over several months and with the participation of about 500 economists representing about 17 sectors, until its outputs were launched under the patronage of His Majesty King Abdullah II at the Dead Sea last June.

The “sector” presented more than 30 priorities, represented by 12 initiatives during the economic workshop, and the sector relied, in its discussion and dialogue sessions, on a clear work mechanism to come up with the initiatives, as they were reflected in a short and medium-term time matrix.

Therefore, much hope is placed on this sector to achieve the goals of the economic vision, which is to raise growth rates, create job opportunities by about one million jobs in all sectors until the year 2033 and improve the citizen’s livelihood.

It is noteworthy that the economic vision includes 8 engines driving economic growth and also aims to double the GDP to reach 58.1 billion dinars in 2033, compared to 30.2 billion dinars in 2021.

Markets and Financial Services Sector:

The sector contributes to the GDP by about 2.3 billion dinars, which is 7.6% of the GDP. The “Economic Vision” aspires that the sector’s contribution to the GDP in 2033 will be about 4.6 billion dinars, and employment in the sector is estimated at about 26 thousand full-time employees representing 1.6% of the total employees. The economic vision aims to reach 49.3 thousand full-time employees in 2033.

Among the most prominent proposed initiatives:

• Update the financial inclusion strategy.
• Launching a campaign to raise the level of financial awareness and education.
• Expanding lending to micro, small and medium enterprises.
• Develop a pre-approved list of donors and lenders to microfinance companies.
• Developing the regulatory framework for financial leasing companies.
• Develop legislation and regulations to be more flexible and responsive to the rapid growth in the financial technology sectors.
• Developing the capital market to become more liquid and deeper (stocks and bonds).
• Accelerate the digital transformation of the sector.
• Establishing a local reinsurance company.
• Restructuring the insurance sector.
• Develop a roadmap for the development of the financial sector.
• Develop detailed strategies for sub-sectors.

Experts and participants:

The “Al-Dustour” Center for Economic Studies followed up on the importance and role of the markets and financial services sector in achieving the goals of the economic vision with the participation of workshop and experts to determine the most prominent aspirations and importance of this sector and what can be achieved to advance the Jordanian economy, raise growth rates and create new jobs until the year 2033.

Dr. Maher Al-Mahrouq – Director General of the Association of Banks in Jordan:

Dr. Maher Al-Mahrouq, Director General of the Association of Banks in Jordan, said that the market and financial services sector has leadership advantages, the most prominent of which is its connection with all other economic sectors such as the financial leasing sector, banks, finance and financial technology, which enhances its advantage. The number of workers in the sector at the moment is about 26,000, and it is expected that the number will increase to about 49,000 by the year 2033. Of course, we aspire to higher numbers when we talk about unemployment and employment.

What enhances the sector’s competitiveness and advantage is that the vision of economic modernization is based on digital transformation, and this is of course among the aspirations of this sector to adopt and accelerate digitization in accordance with the requirements of digital transformation in various sectors.

This sector is also characterized by the possibility of developing the legislation governing it in line with the challenges and requirements as the shift towards digitization requires that the financial technology sector be the incubator for the aspirations of young people to contribute effectively by providing the appropriate legislative environment.

Mazen Al-Wathafi – Director General of the Amman Stock Exchange:

The Director-General of the Amman Stock Exchange, Mazen Al-Wathafi, emphasized the launch of several creative initiatives within the vision of economic modernization. The initiatives focus on enhancing the depth of the capital market sector; the most prominent of which is the introduction of new tools in the market to increase the competitiveness of listed companies, apply international standards, strive towards digital transformation and achieve the requirements for joining international institutions in addition to provide new sources of funding, provide incentives for listing in other markets and reduce the cost of trading. The initiatives also include stimulating the establishment of investment funds by granting tax incentives.

He pointed out that for the first time, various financial and regulatory institutions are present at one table to achieve the interest of this sector and to develop new products and tools to upgrade it within the highest international levels.

Nour Ghazi Jarrar – CEO of Citibank / Jordan:

Nour Ghazi Jarrar, CEO of Citi Bank of Jordan, said that the role of the markets and financial services sector in the vision of economic modernization is complementary and possible. As economic growth needs a strong and attractive financial environment that offers various services, including the provision of financing, whether through the capital market and/or loans and bonds as well as innovative financial solutions and services that keep pace and meet the requirements of growth.

She said that the sector is able to achieve the goals of the vision of economic modernization, both with regard to raising the sector’s contribution to the gross domestic product until 2033 by continuing to achieve greater financial inclusion for citizens and small and medium-sized companies and expanding the customer base as well as by developing the capital market so that it becomes more Deepening, providing liquidity and restructuring the insurance sector to become more sustainable.

In addition to the sector’s role in achieving the goal of the “vision” by creating new jobs and increasing employment in the sector, noting that economic growth will increase the need and demand for financial and banking services. To meet the demand, there will be a need to provide more job opportunities and train and qualify staff. Also, the development in financial technology will require the presence of advanced technological expertise, which will increase the attractiveness of job opportunities especially for the new generations with a technical orientation.

As for the sector’s link with many other economic sectors especially finance and how to increase the sector’s effectiveness in supporting various other economic sectors, she said this will be done through increasing the available financing tools that are compatible with the requirements of the various economic sectors. For example, increasing the growth of financial leasing to become a source of financing for SMEs as well as increasing the role of microfinance companies due to their social/economic impact, and diversifying sources of financing including Islamic and green bonds linked to sustainable development goals. The accelerating adoption of financial technology would help access financing regardless of geographical location and serve a larger segment.

In response to a question whether the market and financial services sector needs new legislation? She said: With regard to the banking sector, the Central Bank of Jordan is making great efforts in the field of legislation and keeping abreast of the latest developments. Their tireless effort is reflected in the effectiveness and outstanding performance of the banking and financial sector under their supervision.

Regarding the plans to accelerate the digital transformation process in the sector, she confirmed that there are ambitious plans to accelerate the digital transformation. The Central Bank of Jordan has led the digital transformation in Jordan and now there is a package of digital services that reach a global level, and there are still great trends and plans to accelerate the digital transformation led by the Central Bank through JOPACK Corporation. These plans had a significant impact on increasing financial inclusion to more than 50%, and work is still underway to expand the segment of users of banking and financial services.

On ways to develop the capital market to become deeper and more liquid (stocks and bonds), she said that developing the capital market is a priority to provide financing alternatives as well as to provide opportunities, investment alternatives and a pricing reference pointing out that the development of the capital market requires the presence of various interrelated factors including legislative, institutional and technological.

She stressed the need to restructure the insurance sector in order to re-create a solid, strong and sustainable sector.

Regarding the idea of establishing a local reinsurance company, she expressed her belief that this must be well researched so that all the data are taken into consideration including the size of the Jordanian market and its ability to withstand this type of activity as well as credit rating and other matters that drive insurance companies noting that the focus should be on restructuring the insurance sector.