Will Jordan become the next Dubai?
There's more to the Red Sea city of Aqaba than pristine waters and breathtaking coral reefs. The liberalized duty-free area is seeking to become the gateway of commerce in the region, Jordanian officials say.
The Aqaba Economic Zone Authority (ASEZA), which runs the port city independent of the government, has signed several agreements worth a total of some $500 million to expand the port's handling capacity.
To be completed in 2015, the port project is expected to pave the way for turning Aqaba into a solid transit hub serving the local market, Iraq, Syria and other Levant ports, ASEZA officials told The Media Line.
Aqaba is surrounded by several ports in the Red Sea area including in Egypt, Saudi Arabia and Israel, but officials are confident that the Jordanian port has the edge due to its direct borders with two major markets, Iraq and Syria.
The adjacent Israeli port city of Eilat is hardly considered a competitor for Aqaba, according to Jordanian businessmen.
“Eilat serves the local Israeli market. Iraqi or Syrian businessmen refuse to deal with Israel because of its occupation of Arab lands, therefore Aqaba is the natural choice,” said Mohammed Abu Jaber, who runs an Aqaba import-export business.
The port project will see the construction of 28 new terminals for fuel, phosphates, grains and other goods.
Ghassan A. Ghanem, CEO of the Aqaba Development Corporation (ADC), said the new port is strategic in ensuring the kingdom's food and energy supplies and will also serve regional markets.
“Jordan's stability boosted the confidence of investors in Aqaba, which aims to become a hub of imports and exports in the region,” Ghanem told The Media Line.
“We are talking about a new group of terminals that will be expanded or constructed including terminals for natural gas at a cost of $50 million and another for fuel gas at a cost of $20 million,” he added.
Jordan hopes the new gas terminal will solve its chronic fuel crisis that has been exacerbated by the turmoil in Egypt, the main provider of the kingdom's natural gas.
The government reported a $1.5 billion loss due to the frequent disruption of Egyptian gas supplies since former Egyptian president Hosni Mubarak's regime was overthrown.
Qatar will be the main provider of gas in Aqaba as the Gulf state targets new markets including Syria and Turkey, Jordanian businessmen said.
Another key project is an agreement to build an $18 billion pipeline to export Iraqi oil from Basra through Aqaba.
Iraqi Business Council (IBC) President Majid Saadi said that pipeline represents a significant improvement in trade ties between Jordan and Iraq. The pipeline will enable Iraq to export 2.25 million barrels of oil daily, generating some $2-3 billion for Jordan annually.
“Jordan has proven time and again it is a reliable partner for Iraq, in times of peace and turmoil,” he told The Media Line.
The volume of traffic in the port is up, with some 817,000 containers handled in 2012, serving Jordanian and Iraqi consumers. Over the past four years, the volume of traffic has nearly doubled, according to official figures.
“The pipeline with Iraq is recognition of the strategic value of Jordan's stability, Additionally the newly expanded port will also lead to a leap in trade volume between Jordan and Iraq and the rest of the region,”
Aqaba was transformed into a special tax free economic zone by Jordan's King Abdullah in 2000, in a bid to turn the city into a commercial hub. It was granted administrative independence and all economic incentives, including passage of the tax-free zone law.
While the commercial projects continue undisrupted, other ventures aim to bring in more dollars by turning the city into a major tourist attraction.
A $10 billion megaproject, Marsa Zayed, is dubbed the biggest real estate and tourism project in Jordanian history and promises to turn the city into a veritable wonderland.
Funded by the United Arab Emirates government, it includes high-rise residential towers, retail, recreational, entertainment, business and financial districts and several branded hotels.
With billions of dollars invested, Jordanian officials are confident Aqaba is destined to become the new Dubai of the Middle East.