In the aftermath of the Arab Spring, Jordan is at the center of a political and economic crisis that has been exacerbated by instability and conflict affecting its key neighbors and trading partners. Economic growth has slowed; an influx of refugees from nearby countries has strained the economy; and the poverty rate hovers at around 13 percent.
More than 50 percent of the Jordanian workforce is employed by micro and small enterprises (MSEs). And one route out of poverty is the growth of these enterprises, which help reduce poverty by creating jobs, including jobs for women. But the enabling environment for these enterprises is insufficient, and local governments lack the capacity and authority to nurture existing businesses and attract new investment. Most of the economic growth and job creation has taken place in larger firms.
The U.S. Agency for International Development (USAID) has designed the Jordan Local Enterprise Support (USAID LENS) Project to create an enabling environment for MSE growth and innovation. FHI 360 is the implementing partner, and as a subcontractor to FHI 360, ICMA is a key player in this five-year effort.
USAID LENS is designed to improve the economic resilience of vulnerable and underserved populations in Jordan, including women and youth, and facilitate their participation in economic growth. It has three primary objectives:
- To promote a policy environment that (1) enables micro and small firms to produce, transport, market, and sell efficiently and at competitive cost; (2) helps clarify the availability of resources for municipalities to undertake local economic development (LED) initiatives and support their capacity to access such resources; and (3) encourages investment at the local level
- To create effective markets for business support services, particularly access to finance, for MSEs and vulnerable populations and increase the appreciation of firms for the value they provide
- To improve the capacity of local government leaders to implement local economic development through streamlined communications with citizens, the private sector, and national government actors; clearer lines of authority; and improved ability to market the assets and investment opportunities in their municipalities.
ICMA’s activities focus on the third objective, to strengthen the ability of Jordanian municipalities and their local development units, together with the local business community, to attract investment and facilitate growth. ICMA’s role has two primary components:
- Supporting changes in national policy and regulations to facilitate better local economic development (LED) by identifying political, economic, and social barriers; analyzing the system of revenue transfers from the national to the local level; and mobilizing LED resources to reduce the need for transfers
- Building local capacity to design and implement successful LED strategies with the involvement of governmental, private-sector, and other local stakeholders.
ICMA’s work plan includes assessing current capacity of selected municipalities, providing LED training for mayors and for staff at the local and governorate levels, and creating CityLinks partnerships matching Jordanian cities with their counterparts in U.S. jurisdictions for information- and knowledge-sharing exchanges.
Overall, USAID LENS seeks to encourage entrepreneurship, strengthen the economic engagement of women and youth, and drive greater understanding and ownership for economic potential at the municipal level. The project will focus on sectors with emerging or high growth potential, including tourism; food distribution; information, communications, and technology; and transportation/logistics. Activities began in the governorates of Zarqa, Irbid, and Amman (outside the Greater Amman Municipality), with plans to expand to at least one other governorate in early 2015.