IFLR 1000
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CONTEXT AND TRENDSWhile Jordan is one of the few countries in the Gulf region not to have been affected directly by 2011's so called 'Arab spring', there has not been the influx of capital from troubled neighbouring jurisdictions that practitioners would have hoped for. "Politically we have been affected by the Arab spring, that's best for the country, not for worse," says one partner, "but from the business point of view, we've not been affected....

CONTEXT AND TRENDS

While Jordan is one of the few countries in the Gulf region not to have been affected directly by 2011's so called 'Arab spring', there has not been the influx of capital from troubled neighbouring jurisdictions that practitioners would have hoped for. "Politically we have been affected by the Arab spring, that's best for the country, not for worse," says one partner, "but from the business point of view, we've not been affected."

Other practitioners are more optimistic and cite project investment as one area where Jordan is a relative safe haven compared to some of its Middle Eastern contemporaries. "In the past five years we've seen many joint ventures, M&A, it's still an environment for foreigners in Jordan," says one practitioner. "They are confident of putting money in big projects, maybe because they are not sure of the political situation around [the region]. There's a threat, local investors are not confident. But in Jordan, the economy is stable. What makes the threat is the surrounding environment."

Speaking with practitioners there is a clear sense that while the country has not witnessed mass unrest or regime change, it is nevertheless strongly influenced by outside factors. "I'm not that optimistic in terms of deals. Jordan is kind of a funny place affected by any type of sentiment, US or Eurozone."

If one considers the situation in the specific environment of bank lending, it is hard to get a sense of the true impact of outside events on the level of liquidity in the market. Local banks, while keeping a steady level of lending in the last few years have not been releasing the level of funding that some would like to see. "Banks are still cautious about any new lending. There's new business development in Jordan, but it's not like the same as last year," says one partner, although another is more optimistic. "Banks started to lend more and extend facilities. Started to loosen up on their previous strategy that was more conservative."

The picture in M&A is clearer, with little in the way of postive news when it comes to transaction volumes. "The country has been in stagnation mode. Those big financings [referring to specific one off transactions] do not reflect the market," explains one partner. "Because of the Arab spring some transactions are slowed down. There are a few, but the size is less," confirms another M&A partner.

RISING STARS

Ali Sharif Zu'bi Advocates & Legal Consultants
Jumana Toukan