The Levant Banks on Stability
Platt, Gordon, Global Finance
Caution and conservative growth are the key goals of Levantine economies. By Gordon Platt
The resource-poor countries of the Levant have been trying to promote open markets, free trade and labor mobility among themselves to strengthen their economies, but the ongoing hostilities in Syria have complicated the effort.
Banks in the Levant - countries on or near the eastern Mediterranean - have witnessed several political and economic crises in recent years, which has taught them to be cautious and conservative in their operations, says Abdel Hamid Shoman, chairman of Arab Bank, based in Jordan. He says taking a prudent approach during turbulent times is critical to long-term success. "This [stance] has allowed us to be well positioned to capitalize on times of growth," Shoman says.
The unrest in Syria started to take its toll on neighboring countries in 2011. "Tourism in the region has been affected, as well as trade," Shoman says. "Syrian exports are relatively cheap in comparison to other options."
Amid the uprisings, the kingdom of Jordan, which has been invited to join the Gulf Cooperation Council, is working on reform, both politically and economically, Shoman says. "The fiscal challenge is large, and the 2012 draft budget aims to reduce the deficit by controlling spending in areas with little social returns and increasing the revenue effort," he says. "Efforts have also been expanded in supporting small and medium enterprises as well as entrepreneurship, given their potential to drive economic growth." In addition, the country is working to boost the Amman Stock Exchange and revise investment regulations to create a healthier and ultimately more attractive market for investors.
"Despite the challenges that lie ahead for Jordan, there are still positive indicators in the form of a steady flow of foreign remittances, a tourism industry that boasts great potential, and robust exports of phosphate and potash," Shoman adds. The Jordan Free Zone is also playing a major role in attracting investments from the region and globally. …