Supply Chains, Digital Transformation and the Construction Sector in Jordan
- August 7, 2020
Jordan was one of the first countries to impose an extensive lockdown to deal with the Covid-19 pandemic. IE Maha Ali, former Minister of Industry, reports to EMA Secretary General Clara Gruitrooy what this means for Jordanian SMEs, regional supply chains, digital transformation and female entrepreneurs.
HE Maha Ali was the Minister of Industry, Trade, and Supply in the Hashemite Kingdom of Jordan in 2015 and 2016. She was previously a member of the negotiations teams for Jordan’s accession to the World Trade Organization WTO and Jordan’s free trade agreements with the United States, Singapore, Canada, and Turkey. For her achievements, she was awarded twice with the Royal Medal by HM King Abdullah II in 2008. Being an engineer by profession, she is the CEO and founder of her own company Enrich Business Consulting and, since 2019, lso a professor at the AlHussein Technical University. In her various functions, such as at the UN in Geneva, she has proven her international mindset.
Clara Gruitrooy: Your Excellency, we are all still shocked by the explosions in Beirut last week. How is the situation perceived in Jordan?
H.E. Maha Ali: Well, it’s very sad news that we received in Jordan and I would like to send my condolences to families who lost their friends, their sons, their daughters. It’s really a big tragedy and everyone here in Jordan was shocked. His Majesty King Abdullah immediately gave instructions to send a military field hospital to help saving injured people which arrived in Beirut only two days after the explosions.
Speaking about the current global situation and the Covid-19 pandemic, what is your assessment of the situation and its effects on Jordan’s economy?
Well, Jordan is affected like other countries worldwide. In Jordan, the lockdown was implemented in an early stage: Schools and universities were closed, businesses were closed for a few months, and this helped in controlling the pandemic within the country.
But at the same time, it had an impact on the economy. Paying salaries has become difficult. Most of the companies in Jordan are categorized as SMEs, small and medium-sized enterprises. So, in the end, such SMEs are not always resilient enough to absorb such shocks. The government put in place several packages, but I would expect that the impact would not be limited to the time being. We would see it towards the end of the year and next year also.
What is your projection for Euro-Mediterranean economic relations and what changes to international trade due to the Covid-19 pandemic and its aftermath do you expect?
The EU remains an important trade partner for Jordan. We certainly import more than we export to the EU. But it is important to maintain these regional and international trade relations. We have seen some disruptions at the beginning of the pandemic as many factories were closed temporarily in many of the countries including our region and I would suppose also the EU may have a similar situation.
Many of the input materials for the factories and industries were supplies from China and Asia for example. The dynamic in place and the period of lockdown in different countries caused some disruption to the supply chain. So this would make us think of the need for having alternatives in place and for depending more on regional integration.
Covid-19 has been playing a very important role in terms of forcing companies, forcing governments, forcing countries towards digital transformation and the use of technology. And actually, we have seen this in Jordan: how much technology helped during the lockdown phase and the lockdown period. And now we are seeing companies starting to change and transform their business models to depend more on digital solutions, depend more on e-commerce, e-payment. All these solutions are becoming really important.
Indeed, Jordan is a very important hub for digital technologies. Speaking more about the traditional construction sector, the EMA is currently preparing with the German government a virtual delegation to Jordan in the field of sustainable construction. In light of its fast development in the last years, what prospects do you see for the Jordanian building and construction sector?
Well, I think this sector is one of the sectors negatively affected by Covid-19, similar to the tourism sector and others. Construction depends on projects – whether tendered by the government or by the private sector. It needs financing. Taking into consideration the pandemic situation globally, this has also affected the availability of funding worldwide.
Consumer behavior is really changing due to the Covid-19 pandemic. Priorities are changing for consumers. People are uncertain about the future and many people are looking at whether there will be a second wave or not, would there be lockdowns in different countries or not. So all this affects the different sectors. But hopefully, I expect things to get better next year, but this year things are a little slow and economic growth is also expected to be negative.
The virtual delegation that you are organizing could lead to an exchange of experiences on how this sector can be more resilient in facing such situations, from the experience of the EMA delegation, Germany, and other countries, how they are securing for example financing for their sectors, how strategies are being put in place to sustain these sectors and sustain businesses in these sectors.
We last met at the Arab-German Women’s Network Forum in Berlin, so please allow me a question about women in business. What strategies and measures that could be implemented to support and further female entrepreneurship in Jordan would you consider most effective?
Women entrepreneurs are affected like other entrepreneurs in the country in light of this pandemic. I would suggest that one of the first issues we need to focus on for women entrepreneurs is to educate women and to provide capacity building for women on how to sustain their businesses in such shocks and in such situations. Adjusting the business model and, again, digital transformation, I believe, is essential for any business: to have a strategy for digital transformation, to learn how to use technology, how to integrate technology in businesses. This is something that was not really common in many businesses in Jordan before Covid-19, but now we are seeing that businesses are realizing the importance of technology and technological solutions to be integrated into businesses. And this should also be reflected in our educational system.