Saturday, May 10, 2008

Dude, who sold my country?

The prime minister met informally with the parliament last Thursday to explain the plans to sell the new army headquarters and possibly the King Hussein Medical Center. Here are the main points:

1- The government puts the welfare of the citizen above all else blah blah blah.

2- The government commits to be transparent, frank and open blah blah blah.

3- The government has formed a guiding committee to look into using all state lands and what to do with them.

4- The government’s priority is to lure investments, and not erecting buildings or residential areas.

5- But, if the government fails in luring job-producing investments, what are they to do? The government must facilitate investments as dictated by the investors. I don’t understand the logic. If investments don’t help the economy, why should the government facilitate them?

6- Investors told them they want to open regional offices in Amman because of it’s access to Iraqi markets and because it is cheaper than Dubai.

7- The government studied what buildings investors might like and decided that the new army headquarters might fit the bill. Going back to point 5, will these offices be staffed by Jordanians or by representatives of the multi-national companies that will occupy them?

8- They haven’t sold anything, yet.

9- The lying rumor mongers spread lies that the deal has been done.

10- The Social Security Corporation will be “leading the investment”. Previously, the minister of labor, Bassem Salem, who is also the head of the SSC board, said that the corporation will establish a company with a capital of 100 million dinars for this purpose. He also said that they will have “strategic partners”. Now, the lowest estimate for the value of the property has been put at 2 billion. So, the SSC company will have capital to cover 5% of the value of the property. Of course, you can’t but a Hyundai with a 5% down-payment. Who are they kidding? Anyway…

11- Jordanians will have priority in the investment (presumably unlike the Aqaba deal).

12- The SSC will seek funding through “Islamic bonds”. More on Mullah Nader’s Talibani stances in a future post, although I have mentioned one aspect earlier. BTW, it is not his business how the SSC funds its projects or for him to impose his ideological preferences on it.

13- If no Jordanian investor has 2 billion dinars laying around, and the Islamic bonds are too expensive, then the will seek foreign investors in a “transparent open process”.

14- They will “discuss” with the army medical services (who run the KHMC) whether they would like to move to a God forsaken corner of the Jordanian desert or not. It will be purely up to them. Right.

15- In any case, the medical services will still do their job, wherever they are.

16- Everybody should seek non-conventional solutions for the economic situation. Of course, he gives himself too much credit here. There is nothing non-conventional or innovative about this. Most Jordanians have sold their properties to cope with financial difficulties. In the long-run, they lost their assets and spent the money.

17- The money will be used to build a new medical center and to pay off some of the country’s outstanding debt (how much is, of course, left vague).

18- The scheme will create jobs and help the economy blah blah blah.

19- We should trust them.

To me, I would say that I have no ideological issue with holding on to any property, as long as the deal will help improve the economy and create jobs. On the other hand, this long statement not withstanding, the whole scheme does not make any sense. Clearly, the involvement of the SSC is for cosmetic purposes (a fig leaf, if you will). The Islamic bonds scheme seems to be the key. Who can object to Islamic bonds? That would be, well, un-Islamic. My guess is that the Imarati investors will come in through this door, which, as I said, I have no problem with although I resent the insult to my intelligence.

And how much will it cost to build new army headquarters and a new medical center? Construction costs have skyrocketed in the last couple of years. Of course, massive projects provide for opportunities for massive kick-backs. Sorry. I didn’t say that.

Anyway, the discussion after the meeting was interesting as well. More on that later.


At 10:17 PM, Anonymous Anonymous said...

I share your stance. Jordanians should open the door for other Arab investors if they do not sufficient funds to carry out the projects.

At 10:46 PM, Blogger Tallouza said...

The wishy washy way in which various government led investment deals have been shrouded with secrecy has turned many of us into cynics and skeptics. There are assets that are icons of great sentimental values. I strongly believe that they should never be up for sale. They hold a collective institutional memory of our country and we should vehemently oppose losing them for some investor. I still remember Philadelphia Hotel (one of the oldest hotels in downtown Amman) and how painful it was to learn that it had been demolished.

At 2:11 AM, Blogger Habchawi said...

Nobody seems to know how much we paid for the new army HQ and off course we don’t know how much new army HQ and moving the KHMC would cost. However, it appears that nothing much would be left out of the 2b.
In any case we’ve been attracting millions in investments, the economy have not improved as far as anybody can see, so why should the so called new investments be different?
Additionally why the hell all of those investments are in Amman what about the other 11 cities (3M people) of the country. And why do I always feel that no matter who is the PM it’s still the same group running the country in the same way for the last 10 years. Stop fooling us and just dismantle the gov and parliament, let’s create a new COMMITTEE to run it.

At 3:52 PM, Anonymous Anonymous said...

Although I am very dismayed by the secrecy and non-transparent manner in which the government conducted this deal, I have to say I do not think moving the army headquarters, and even the madina, is a bad idea. First of all, neither of these are public property; they were located in a very central part of the city, but both are closed to public access. The army headquarters are only accessible to those who work there, and the madina is only accessible to military and government employees (26% of the working population) or to those who have big wastas. So in terms of urban planning, they were poorly located to begin with.

Moving them well outside Amman is a very good idea (the hospital is a specialist hospital, therefore any arguments about close access for emergency are null) and can actually contribute to the development of town life outside amman. If the government builds affordable housing and a school surrounding them, then it would make more sense for the employees of both to live there, taking some of the strain off the densely populated capital. As long as, of course, they are moved to the east or south of the capital (moving them to the west (Madaba) will mean building on fertile land which should be utilized for agriculture).

As to the need to attract local rather than foreign in investors, I agree with you on that.

At 5:54 PM, Anonymous Anonymous said...

The Social Security will establish a company with this 5% (100 million) to conduct a feasibility study. Of course we all know the results...the project will "not" be "unfeasible"...
But what if it really turns out to be unfeasible... No problem, they, with the help of our dear Parliament will increase the retirement age and decrease the retirement benefts, increase the social security percentage they charge, and find all sorts of innovative "sick" ways to stay "healthy".

At 8:35 PM, Blogger Khalaf said...

100 million for a feasibility study? Of an office complex? That's beyond unbelievable.


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