Closure of QIZ factories rings a bell and threatens local and migrant workers

Qualified Industrial Zones (QIZ) of Jordan host almost seventy factories and employ around seventy five thousand workers; fifty five thousand of them are migrant workers. QIZ spread in governorates of Amman, Zarka, Tafeeleh, Karak, Ajloun, Jarash and Jordan River Valley.

Recently, few companies operating in those regions started to close and move to other countries such as Egypt and Ethiopia seeking low operating cost which is a key issue for employers.

The main reason that causes local workers decline work in textile factories is low wages as well as unfavorable work environment, whereas migrant workers do not object working longer work hours as they do not have family obligations contrary to the Jordanian workers.

Among main reasons that lead companies to move to Egypt and Ethiopia are high competitiveness of the Egyptian currency, availability of natural gas and water, factories enjoy better conditions within the framework of the qualified zones agreement to include low production input percentage, availability of better industrial infrastructure and sea transport, low cost of services and utilities, and availability of intensive labor force with reasonable rates.

It is noteworthy to mention that increase of oil prices during recent periods had affected the performance of local industry to include textile and garment. In addition, the rise of Egyptian qualified industries of huge expertise in the field of cloths along with scarcity of locally trained and ethically committed labor force had aggravated the problems of local qualified industries and affected the positive impact of qualified zones to employ local workers. This made investors substitute local force with foreign workers during the last decade.

The government is required to pay more attention to this disturbing situation and provide successful solutions to include provision of advantages to investors in a way not to affect local and foreign work force and help raise competitiveness. Public plans are needed to assist that without harming local industry.

It is known that Jordan was the first Arab country to sign qualified zones agreement. The agreement helped exporters access new markets and attract industrialists to benefit from its advantages prior to the signature of US-Jordan Free Trade Agreement (FTA). Afterwards, many industries tended to seek benefits of the FTA rather than the QIZ conditions.

The government is called to attract high value added foreign investments of promising competitive advantage for the National economy. In addition, diversification of commercial activities is needed to reduce risks resulting from high reliance on US market due to its linkage with political consequences of the region. Furthermore, it is urgent to start correction of few deficiencies that local market suffers, and harmonize between outcomes of education and needs of local industry especial for export. Specific considerations need to be taken for the benefits of industries and markets. Flexibility is needed in legislations especially what is related to procedures, and cost of recruiting labor force from outside, and enforcement of minimum wage.

Addressing this challenge requires planning for local labor force, proper training to improve skills and capacity building, in addition to plan for better education outcomes to harmonize with local market needs.

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