WHEN: Thursday, May 21, 2015
Following is the unofficial transcript of a FIRST ON CNBC interview conducted with His Majesty King Abdullah II of Jordan by Hadley Gamble, CNBC Middle East Correspondent.
All references must be sourced to CNBC.
Hadley Gamble, CNBC (HG): Your Majesty, thank you so much for joining CNBC.
His Majesty King Abdullah II (HMKA): Not at all.
HG: I want to kick off by talking about exciting times for Jordan. You have billions of dollars of opportunities for investment coming online now; and you are really trying to re-boot Jordan's economy. What's your plan to do that?
HMKA: Well it's not really sort of re-booting. Every time that the region goes through a crisis it's how does Jordan adapt to the challenges of the region. We've always been a stable country, and more stable relatively than with all that's going on. So Jordan is launching itself for the next ten years: Where do we position ourselves to take advantage to what we can deliver to our people and the region?
So it is our traditional sectors that are very strong – tourism, pharmaceuticals, education – but then, the new areas − ICT and renewables − that I think are going to be the two main areas that are going to push Jordan as the new areas that are going to take people by surprise.
HG: Investors are looking about where to invest their capital, they do look at risk, and of course as long as militants in Iraq and Syria seem to be gaining ground, can you ensure investors that Jordan is safe? And are we going to see those crises in those countries continue?
HMKA: I think we have a history over many decades of Jordan always being stable throughout the region, whatever the crises are, and you have got to remember that with everything that is going on around us, Jordan has done extremely well. We have had growth of over 3% the past couple of years and we are expecting 4% over the next two or three. Our reserves in the Central Bank are the highest they have ever been.
When you look at the region, you mentioned Syria and Iraq. Iraq has always been a very strong market for us. I believe that the Iraqi government with the coalition forces is going to open the route between Amman and Baghdad this summer. That is a very strong market that is going to be reopened.
So I think those are looking to come to invest in Jordan, it is not just the traditional Iraq market, but then again the FTAs we have with the GCC, that's a traditional market. We have always looked beyond the region; it is not just looking at Jordan. We have free trade agreements with the United States, with Canada, Mexico is coming online. So, again, it is the Americans that have been an area of interest. We have been very bullish towards Asia – so it's India and further afield.
And because of the development of the sea port city of Aqaba, there's now a new move to look at the Horn of Africa and how do we develop the East African countries. So, again, there are opportunities that are coming up and people are knocking Jordan's door.
HG: In terms of the challenges here at home, 20% of your population are refugees right now. You also have a water crisis and you also are dealing with the fact that you are a net-energy importer. How are you tackling those problems?
HMKA: The challenge with 20% of our population being refugees, we do get a lot of support from the international community. I think that most people don't understand that 85% of the refugees are not in the refugee camps, they are actually outside; and so that's a burden on the Jordanian economy. Almost 25% of the GDP is then a burden that we have to take care of looking after the refugees. That does create a bit more of a challenge.
However, how do we off-set that with the energy needs that we need? Because of the lack of gas that we get from Egypt, we have had to move quickly. This is has always been a secret of Jordan, being able to adapt to all the challenges that we have had. And that's why you are seeing a major investment into alternative energy.
We are going to moving with the Chinese on a very big deal on wind and solar, about 1,000 megawatts. That's going to be the niche that Jordan is going to move in. You are going to see a huge jump in renewables for Jordan in the very near future.
HG: Talk to me about those strategic deals. You were talking about the deal with the Chinese, very exciting for Jordan. What other deals are we going to see in the pipeline?
HMKA: We do obviously have nuclear, for two power plants that are on the table. Renewables for many different countries, but the big one at this stage is the Chinese. We are the first country definitely in the region, where the government - we at the Royal Court - are starting it, and most government institutions, and military/security, are all going for administrational vehicles, all electric.
We have an initiative that we launched recently for 5,000 schools, sorry about 50 schools, but all 3,000 schools in Jordan will all be on renewable energy; so all our public schools will be renewable in the next two years. So I think this shows the trend of how we are thinking, how we are adapting.
HG: Those are incredible numbers. So your message to investors is don't be put off by the regional chaos?
HMKA: Well, I think that we've always said that where ever there have been problems in the region, Jordan doesn't use that as an excuse not to move forward. Whether its economic reform or political reform, I keep telling our people that its business as usual and we shouldn't shy away. In actual fact, when there are crises, this is the time to take advantage and actually push forward. So I think that you'll see a very strong turnout from the private sector across the world coming to the World Economic Forum to take advantage of 17-19 billion dollars-worth of investment opportunities that the WEF is going to announce.
HG: And finally, what's the value proposition for entrepreneurs, for investors, when they come to Jordan, why would they choose Jordan, instead of, for example, choosing Dubai?
HMKA: What has always made Jordan successful is the investment into human capital. That's always been our export, and if anything, my ideal long-term vision is to bring that export back into Jordan. Many countries in the region are supported by the Jordanian human talent. That's the capital that we have. And I think that's what sets us apart from other countries.
When you look at ICT, you realize that 70-75% of the Arab content is actually out of Jordan. Out of the top 10 for start-ups, is in Jordan. When you look at medical tourism, we are number five in the world. It all comes back to the Jordanian talent. And because it is homegrown, and not imported, I think that is what differentiates Jordan from other countries.
So when partners come from outside to invest in Jordan, then they have the Jordanian partner, which is a very solid, young, tech-savvy partner to be able to invest in. I think that is what differentiates Jordan from many countries in the region.
HG: Where are we going to be in Jordan in 10 years and what is the Crown Prince's role going to be?
HMKA: Well, you know my son is very dedicated to the development of youth. Where we will be is always pushing the envelope when it comes to new technology. ITC and renewable energy are things we discussed recently. So, the digital age is where I think Jordan is going to capitalize because we have a very young population, a very educated population.
And so I think Jordan continues to be the center of ideas and development, whether it is into film-making and other technologies that are coming out. I know others try to replicate what we do, but it is always a nice surprise to see that the Jordanians have always had that edge. We do apps, app competitions for high school students. I think we are the only country in the Middle East that does that. I think that's indicative of how we continue to invest into the younger generation, so that they are two steps ahead of everyone else.
HG: Given that issue of a young and growing population, and the opportunities that that can raise, how important is it then, with all the turbulence in the region that Jordan gets it right?
HMKA: Well, it is important, and again, you raise a problem or a challenge that the world needs to understand for the whole region. We have the largest youth cohort in history coming onto the scene throughout the Middle East, 350 million people, who are looking for jobs; so if we take one step back and look at the challenges of the Middle East, job creation and giving young people a future and hope is something that is that the international community needs to realize. As we are combating the instability of the region, the challenge of global terror, we have to have strong partners in the world because these young men and women need to have faith in the future.
So for us in Jordan this is so important that we make sure that safety net is already there and we do give them that future they need. Now, how do we multiply that across the Middle East.
HG: Your Majesty, thank you so much for joining CNBC.
HMKA: Thank you very much.
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