Jordan

Outsourcing to Jordan
Outsourcing index: 
6.2
Rank: 
6

Jordan is rapidly becoming one of the most competitive locations for global sourcing companies today. The country has a highly skilled workforce, and most of the middle and upper class have strong English language skills. A component of its modern development was to invest in reliable wireless application protocol, general packet radio services (GPRS), and ICT infrastructure that uses fiber-optic links around the globe to enhance IT systems.  Stanford Research Institute ranked Jordan a lucrative and "Business Friendly" policy environment for investors; its openness to foreign investors and leniency with the tax system makes it a lucrative option for offshore operations.

Jordan’s strengths in outsourcing are in financial services, healthcare pharmaceuticals, energy and renewable energy, information and communications technology, and engineering services. There are over 82,000 engineers in Jordan, although there are only 8,000 who work in their specialty. The government plans to bridge the gap by using global sourcing to create more jobs. Their primary goal is to transform the information and communication technology (ICT) industry, particularly under the key sectors of contact research organizations (CROs), outsourcing and shared services (BPO), knowledge process outsourcing (KPO), and medical services sectors.

The outsourcing business is projecting to reach $200M by the end of 2011. The government has launched a joint public-private sector venture: "Turn to Jordan...your Smart Destination," which aims to attract investors and encourage offshore outsourcing companies to establish their businesses in the country by November 2011. 

Country overview

Jordan - Petra

Jordan has been a key trading location in the Middle East for centuries because of its proximity to the crossroads of Europe, Africa, and Asia. Despite its lack of sustainable natural resources, the country has emerged as the "business capital of the Levant" and often touted as the "next Beirut". Its economy is recently shifting to knowledge intensive industries.

Information and Communications Technology (ICT) is the fastest growing sector in Jordan, which is expanding 50 percent annually. Total exports have averaged 18 percent growth in 2006. The industry is among the top three for highest annual FDI achieved ever since 2002. Over the last five years, the Telecom and IT sector revenues have more than doubled, from $70M USD in 2003 to an estimated $770M USD. The services considered to be amongst the fastest growing IT sectors in the country are banks and financial services due to their demand for on-call twenty-four hour services.

The CIA World Fact Book cites Jordan  as being an "emerging market with a free market economy."  Jordan’s GDP in 2011, measured by the current exchange rates is around USD $33.79 billion. It is undergoing a rapid privatization of its previously state-controlled industries, particularly in Aqaba and Amman, and its six economic zones are now attracting billions of local and foreign investments. These zones include: Irbid, the Dead Sea, Ajloun, Ma'an, Mafraq, and Aqaba. The Aqaba Special Economic Zone is considered a model for economic growth due to its low tax and low regulations. Amman was ranked by the Economist Intelligence Unit as the fourth most expensive city in the Arab World next to Dubai, Abu Dhabi, and Beirut.

Jordan is currently facing civil disturbances, and unless the government manages to solve the growing unrest, the chances of moving forward economically will be more difficult for the nation. 

Population: 6.5 million
Source: CIA Factbook, 2009

Gross domestic product: $25.1 billion
Source: World Bank, 2009

Gross domestic product (PPP): $33.3 billion
Source: World Bank, 2009

Gross National Income Per Capita (Atlas): $3,310
Source: World Bank, 2009

Gross national income (PPP): $5,730
Source: World Bank, 2009

Cost competitiveness

Jordan - Dinar
Cost competitiveness index: 
7.6
Rank: 
6

Outsourcing in Jordan is highly competitive, particularly in the emerging areas of finance, IT, insurance and health sectors. Its wages are only slightly higher compared to Indian employees, and its average IT staff salaries are only 75% lower than in United Arab Emirates and one-fifth of Ireland.

Employee compensation

The cost of junior resources is an important component in the competitiveness of a country, particularly in large outsourcing efforts that require a higher number of junior assets. Junior software engineers with one to four years experience are about 18.5% of those in the US, with their salary ranging from $8,000 to $20,500. Senior software engineers with ten to twenty years of experience have a lesser differential compared to its US and Western European resources. The usual salaries are 24.3% of their US counterparts, with salaries ranging from $3,800 to $18,000 USD. Similarly, Project Managers with ten to twenty years experience are 25.4% of US resources, and their salaries are from $25,000 to $49,000 USD.

Compensation in the Junior BPO Non-voice is about 15.6% of US resources.  Employees who belong to the senior levels and highly-skilled BPO employees with five to nine years experience charge an average of 33% of their American counterparts.

Taxes

Taxes in Jordan are average compared to Malaysia, Indonesia, Thailand, Philippines, and India. Indirect taxes are relatively high compared to the US, with a 16% rate compared to 7% for the US. 

Salaries: Junior BPO resource: 15.7 % of US
Source: PayScale, Sourcingline, March 2010

Salaries: Skilled BPO resource: 33.0 % of US
Source: PayScale, Sourcingline, March 2010

Taxes: Corporate tax rates: 25.0 %
Source: KPMG, October 2009

Taxes: Indirect tax rates: 16.0 %
Source: KPMG, October 2009

Taxes: SMB effective tax rates: 31.2 %
Source: Doing Business (World Bank), 2010

Resources and skills

Jordan - IT Workers
Resources and skills index: 
2.7
Rank: 
23

 

Education and skills

Jordan has a moderately sized workforce at 1.7 million. its adult literacy rate is 90 percent, well below the rates of leading nations like the US, Canada, and those in Western Europe. Estonia scores below United States according to the Program for International Student Assessment (PISA). Reading scores reached 405; Mathematics score of 387; and Science achievement was 415 in the survey conducted by the Organization for Economic Cooperation and Development (OECD).

Language

The official language in Jordan is Arabic, but English is widely understood, particularly among the middle and upper classes. 

Workforce size: 2 million
Source: CIA Factbook, 2009

Adult Literacy: 91 % of population
Source: UNESCO, 2009

Basic Education: Expenditure on education: 4.9 % of GDP
Source: UNESCO, 2009

Educational achievement: Reading: 401 PISA literacy scale
Source: OECD PISA, 2006

Educational achievement: Math: 384 PISA mathematics scale
Source: OECD PISA, 2006

Educational achievement: Science: 422 PISA science scale
Source: OECD PISA, 2006

University Graduates: University educated population: 15.9 % of population
Source: UNESCO, 2009

University Graduates: Annual graduates: 50 thousands
Source: UNESCO, NASSCOM, SourcingLine, 2009

Annual science and technology graduates: 
25.0% of total
Source: UNESCO, 2009

Technological Readiness: Internet access: 3.9 users per 100 inhabitants
Source: International Telecommunications Union, 2009

Technological Readiness: Broadband Internet access: 3.2 subscribers per 100 inhabitants
Source: International Telecommunications Union, 2009

Notes: 

Workforce : Jordan does not report at the Misc. Business Services level. Number includes merchant services (i.e. Other Business Services).

Business and economic environment

Jordan - Economy
Business & economic environment index: 
5.7
Rank: 
15

 

Economic competitiveness and stability

Jordan’s economic competitiveness is moderate with a 4.2 index. Macro economic stability scores the same index, comparable to India’s 4.3 index score.

Infrastructure

A nation’s infrastructure is a major component in deciding where to set up sourcing operations. Road quality in Jordan is above average. With a score of 4.7, is beats India (3.3), Indonesia (3.5) and is well above Eastern European nations with scores that fall below 3.0. Electrical supply is very high with a 5.8 score, beating most competing nations’ indexes.

Regulation

Jordan’s overall ease of doing business ranks 111 among outsourcing nations globally. The complexities associated with starting a business are fairly low – its takes thirteen days to register a start-up company, and filing taxes requires just 101 hours, less than India (258 hours), Thailand (264 hours), and the US (187 hours).

Corruption

The perception of corruption in a country can be harmful for attracting foreign investment. Corrupt locations usually come with unforeseen costs and inefficient business practices. Jordan scores low to moderate for its corruption perception with a 4.4 index, better than India and comparable to the Czech Republic.

Legal and intellectual property protection

Contract enforcement in Jordan consists of 38 procedures, typically lasting 689 days. The average cost of contract enforcement is 31 percent of the total contract value. Intellectual property protections score a 4.4 index, higher than many competing outsourcing locations. Software piracy is moderate to high at 57 percent – the US is just 20 percent.

Economic competitiveness: 4.2 GCI score
Source: The Global Competitiveness Report, 2009

Economy: Macroeconomic stability: 4.2 GCI score
Source: The Global Competitiveness Report, 2009

Infrastructure: Quality of roads: 4.7 index (1-7)
Source: The Global Competitiveness Report, 2009

Infrastructure: Quality of electric supply: 5.8 index (1-7)
Source: The Global Competitiveness Report, 2009

Infrastructure: Mobile phone penetration: 95.2 subscriptions per 100 inhabitants
Source: International Telecommunications Union, 2009

Labor market efficiency: Rigidity of employment: 24index (0-100)
Source: Doing Business (World Bank), 2010

Labor market efficiency: Cost of laying off employees: 6.0 weeks of salary
Source: Doing Business (World Bank), 2010

Regulation: Overall ease of doing business: 111 rank (1-183)
Source: Doing Business (World Bank), 2010

Regulation: Complexity of starting a business: 13 days to register a start-up
Source: Doing Business (World Bank), 2010

Regulation: Complexity of paying taxes: 101 hours per year
Source: Doing Business (World Bank), 2010

Corruption perceptions: 4.7 CPI index
Source: Transparency International, 2009

Legal protection: Procedures to enforce contracts 38 procedures
Source: Doing Business (World Bank), 2010

Legal protection: Time to enforce contracts: 689 days
Source: Doing Business (World Bank), 2010

Legal protection: Cost to enforce contracts: 31.2 percent of claim
Source: Doing Business (World Bank), 2010

Intellectual property: Protection: 4.4 index (1-7)
Source: The Global Competitiveness Report, 2009

Intellectual property: Software piracy: 57 percent
Source: BSE-IDC Global Software Piracy Study, 2009