The International Finance Corporation, the private sector arm of the World Bank Group, signed an agreement with the government of Jordan, through the Ministry of Industry and Trade and the Ministry of Labor, in July 2006, to simplify licensing and inspection procedures for businesses in Jordan. The project is organized by PEP-MENA, IFC's private enterprise partnership facility in the Middle East and North Africa.

Private sector development is critical to Jordan's economic growth. Despite Jordan's recent progress in improving regulatory processes and creating a better environment for private investment, there is still room for improvement, experts noted.

PEP-MENA's licensing and inspections simplification project aims to attract private investment into Jordan by reducing regulatory constraints for establishing businesses. The project will conduct a comprehensive review and streamlining of current inspection procedures at selected ministries, such as Jordan's Ministry of Industry and Trade and Ministry of Labor.

Michael Essex, IFC's regional director for Middle East and North Africa, commented, "IFC welcomes this opportunity to collaborate with the government of Jordan to develop the investment climate in the country. With this technical assistance, PEP-MENA aims to help streamline governmental inspection processes, thus stimulating private sector growth and creating a healthy environment for investment."

Recognizing the importance of an efficient regulatory framework, the government of Jordan has launched several initiatives to foster the growth of the private sector and strengthen the business enabling environment. In 2005, the Ministry of Industry and Trade facilitated the start-up company registration process and streamlined procedures. In addition, the ministry set up the "Committee on Awareness, Instruction, and Supervision for the Industrial Sector," to address the burden of inspections on business operations.

PEP-MENA's project will complement these ongoing reform efforts. The project aims to reduce the cost and time of complying with regulations for private firms and create a transparent inspection system. It will include a review of the legal framework and the maintenance of a risk-based management system. By actively involving the private sector and all stakeholders in the process, the program hopes to increase public awareness about the reform efforts, thereby maximising its potential for success.

In addition to working with the Ministry of Labor on overall inspection reform activities, the project will also include a component on corporate social responsibility in the Qualified Industrial Zones. This component will be jointly managed by PEP-MENAand IFC's Foreign Investment Advisory Services.