Statement by Mr. Luc Stevens, UN Resident Coordinator / UNDP Resident Representative on the occasion of the Launch of the Jordan Human Development Report 2011

27 May 2012

Your Royal Highness, Princess Basma bint Talal, Honorary Human Development Ambassador for UNDP

Your Excellency, Dr. Jafar Hassan, Minister of Planning and International Cooperation
Distinguished Guests
Ladies and Gentlemen

Welcome to the launch of the “Jordan Human Development Report 2011, entitled “Micro, Small, and Medium Enterprises and Human Development”. I would also like to start by congratulating Jordanians on the 65th anniversary of the Independence Day of the Hashemite Kingdom of Jordan, and to wish Jordan peace and prosperity.

Since 1990, UNDP has supported the preparation and production of Human Development Reports with each publication bringing into perspective an emerging dimension of human development, tracking past progress and mapping the future. In 2010 we celebrated the 20th anniversary of these reports. Human Development Reports examined issues as diverse as water, human rights, democracy, climate change and human security.
The 1990 Human Development Report gave the clear and fundamental articulation of the concept of human development. The report started with the now-famous words: People are the real wealth of a nation. It made very clear that the basic objective of development is to create an enabling environment for people to live long, healthy and creative lives.

Your Royal Highness,
Ladies and Gentlemen,

Allow me to put today’s report in a historical context.

UNDP and the Ministry of Planning and International Cooperation issued two National Human Development reports in the past. The first Report in 2000 focused on young people in Jordan and looked at their lives and aspirations in the three key areas of education, employment and social integration. The Report concluded that although Jordan has made significant advances in building people′s capabilities, there is room for improvement in aspects of gender-equality, employment, income and quality and relevance of education.

In 2004, the second report on “Building sustainable livelihoods”, focused on the poor and marginalized people in Jordan and how they can achieve a positive and sustainable livelihood. The report showed that achievements in macro-economic growth and human development must be maintained but additional interventions are required to ensure that all people are active participants in Jordan’s development processes. The report also highlighted that active citizenship should be encouraged so that poor people can become self-reliant and operate collectively, and emphasized the fact that without the full and active participation of women, sustainable development cannot be achieved in Jordan.

The government of Jordan with the United Nations, launched in 2010 the second National MDGs report which showed the progress Jordan has made towards achieving the eight goals. The report concluded that Jordan has already achieved some of the targets, but needs to work more towards achieving others.

The Global Human Development Report 2010, showed that Jordan’s Human Development Index value was (0.681) in the high human development category—positioning the country at 82 out of 169 countries and areas.

In spite of significant achievements, Jordan still has to contend with a variety of challenges. Most significant are its limited water resources, foreign debt, the weak participation of women in the labor market, income inequality, the enduring negative impact of the financial crisis, possible food insecurity, poverty and unemployment.

Your Royal Highness,
Ladies and Gentlemen,

Let us now turn to today’s report.

The Jordan Human Development Report (HDR) 2011 explores the role of Micro, Small and Medium Enterprises (MSMEs), as an agent for sustainable human development in Jordan. It analyses MSMEs and their contribution to human development using four key central pillars of human development, namely: economic growth that is equitable and pro-poor, social progress, participation and empowerment through micro finance, and environmental sustainability.

Findings of the report show that while Micro, Small and Medium Enterprises (MSMEs) do contribute toward the development of Jordan in terms of job creation and empowerment, their contribution can and should be expanded in order to reap the potential benefits of these productive units. Improvement in the overall business environment and the focus of policy on MSMEs are two requirements for achieving such a potential.

The Report offers practical examples, through meeting MSME owners, community members, governmental institutions and non-governmental organizations throughout the Kingdom. The successes – and failures – of the MSME sector within the Kingdom are shared in the Report. It also explores avenues to enhance the role of MSMEs in human development in Jordan.

By spreading all over the country and reaching less advantaged regions, MSMEs offer an increasing source of income to local citizens. MSMEs in this sense can be the tool by which the poor can have the choice to enter productive life, and eventually such tools will move beyond poverty alleviation, and help bring the poor into the middle-class. In addition, MSMEs are seen to empower women, and are instrumental in developing a wide base of entrepreneurship.

MSMEs in Jordan currently focus on producing low value added goods and the process of integrating them into clusters has not yet commenced. In Jordan, very small firms (which do not grow into medium sized firms), hamper the growth patterns of governorates where such firms are concentrated.

UNDP Jordan is also engaged in promoting Global Compact and Corporate Social Responsibilities and is working towards the implementation of Public-Private Partnership projects at community level. In terms of corporate social responsibility SMEs have as yet to enter into the market as players. For this reason, policy and institutional efforts must focus on expanding their interests and capturing their potential. The Global Compact asks companies to embrace, support and enact, a set of core values in the areas of human rights, labor standards, the environment and anti-corruption. We are sure that the cooperation of the private sector and UNDP within the framework of Global Compact will be very fruitful, both in terms of raising awareness about Corporate Social Responsibility and demonstrating the role that the private sector can play for the development of the country.

Your Royal Highness,
Ladies and Gentlemen,

I would like to conclude by sharing with you some of the recommendations of the report:

First and foremost, there is a need for increased coordination among the different institutions serving the sector to ensure an efficient allocation of resources.

Also, while the Report shows that MSMEs do have a smaller export potential than large firms, their export potential is nonetheless significant. The government ought to encourage the growth of MSMEs in promoting professional associations among entrepreneurs, as well as encouraging cooperation among MSMEs, in order to increase their export potential. This further requires that programs for quality control and assurance be created for SME products.

On the government part it is recommended to strengthen the assessment of working conditions and the fair implementation of the provisions of the law, especially minimum wages. It is also prudent for the government to work towards moving the firms out of the informal into the formal sector, thus allowing MSMEs to take advantage of the benefits of the formal sector. A review is also needed for the tax law that was proposed in 2009 to promote progressive taxation, in order to further equality and social justice. An independent tax bracket for MSMEs, could be considered, in addition to expanding the current support mechanisms at the regional level to ensure that MSMEs located in the poorer governorates do not migrate into the more developed governorates.

In order to help disadvantaged people attain their independence through training, grants and low interest loans for the poorest sectors of the population, it is recommended that support to micro-enterprises be increased through micro-finance schemes. It is also recommended that female entrepreneurship is promoted through increasing funds, loans and programs that encourage investment in MSMEs. And last but not least, environmental considerations should be served through the provision and inclusion of training programs for all MSMEs-related activities to ensure long-term sustainability.

Finally, I would like to reiterate UNDP’s commitment to continue its support and partnership with our Jordanian counterparts, to work together for the betterment of human development in Jordan, based on our common vision.

Thank you.