Jordan Growth and Competitiveness DPFs

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Jordan demonstrated resilience in the face of multiple external shocks, but the current pace of economic growth remains insufficient to generate the employment opportunities needed to address the country's persistently high unemployment rates. Although the economy has maintained positive annual economic growth post the pandemic, investment levels declined over the past two decades, including total, public, and foreign investment. Job creation in the private sector has not kept pace with the increasing Jordan’s population during this period, leading to a shortage of high-productivity employment opportunities. Additionally, female labor force participation (FLFP) rates remain among the lowest globally. To escape from this low-growth cycle and generate jobs, Jordan needs to mobilize high-value private investment aimed at boosting productivity and promoting export-led growth. Expanding and diversifying Jordan’s export basket along with improving integration into global value chains would further support these objectives. Sustaining private sector-led growth requires improved governance, greater regulatory stability and predictability, and enhanced access to finance. A more conducive business environment would not only support micro, small, and medium enterprises (MSMEs), which account for more than 80 percent of private firms in Jordan but also encourage greater inflows of Foreign Direct Investment (FDI) into high-value sectors. The Development Policy Financing (DPF) series aims to support the Government of Jordan’s efforts to promote private sector-led growth and job creation. This Program is the first in a programmatic series of two IBRD loans designed to support reforms initiated under the Government's Economic Modernization Vision (EMV) 2033. The initial single-tranche Program in the amount of US400 million dollars is structured around two pillars: (i) improving the enabling business environment, and (ii) deepening access to finance.