4. Improving FDI impacts on gender equality

Jordan has made considerable progress in terms of women’s economic inclusion, but the country still faces significant challenges that have been exacerbated by the COVID-19 pandemic. Progress in education has not been followed by increased participation of women in the labour market. The female participation rate is among the lowest in the world, at only 14%, and the gender pay gap remains significant. Women are concentrated in service sectors, particularly education, health and social care, and in low value-added manufacturing industries. A large proportion of women, about 37%, work for the public sector. Few women become entrepreneurs, partly because of discriminatory social and cultural norms. The working conditions of immigrant women, most often in informal employment, are even more difficult.

Foreign direct investment (FDI) can help host countries reduce gender gaps in the labour market. In the last two decades, however, most FDI in Jordan has been directed to energy (oil and gas) and real estate services, two sectors dominated by men. The manufacturing sector, which employs a significant share of women particularly in garments and textiles, has received a much lower and, since 2008, declining amount. Foreign companies do not appear to be more gender-inclusive than domestic companies. They employ higher percentages of women on average, but are less likely to have female top managers or owners. Evidence also shows that working conditions for women in Qualifying Industrial Zones (QIZs), where many foreign textile and garment companies are located, are often difficult. Women in the zones, most of whom are foreign nationals, have labour-intensive, low-paid jobs with limited prospects for career advancement. Supply-chain linkages between foreign and domestic firms are high in some female-dominated industries, like garments, but FDI spillovers on domestic firms in terms of job creation have been limited.

Improving the inclusion of women in the economic life of the country is a political priority for Jordanian policy makers, as highlighted in the National Strategy for Women 2020-25. The policy objectives in terms of gender equality are in line with Jordan’s ambition to become a prosperous, sustainable and inclusive economy where all citizens, including women, can benefit from economic growth, as described in its national development plan, Vision 2025. This chapter provides an assessment of the institutional and policy framework that supports the positive contribution of FDI to gender equality. It examines the role and co-ordination of relevant government actors responsible for policies in areas such as gender mainstreaming, investment, labour market and entrepreneurship. It also assesses the policy mix at the intersection of these policy areas, which can be used to influence the impact of FDI on gender equality. The key policy considerations are summarised below.

Like most countries in the MENA region, Jordan lies at the bottom of the WEF’s Gender Gap Index 2021 in terms of economic participation and opportunity (133rd out of 156 countries). Despite its progress towards greater inclusion of women in economic life and the advancements of women’s rights and equal opportunities, Jordan still faces significant challenges in numerous areas related to women’s economic participation. Most of these challenges have been exacerbated by the COVID-19 pandemic, which has affected women and men differently due to their different roles in the labour market and society.

Gender equality in education is one of the areas where Jordan has made significant strides in recent decades. The literacy rate for women has increased considerably over the past two decades, from 85% in 2003 to 98% in 2018, exceeding the MENA average by 10 percentage points (UNESCO, 2021[1]). Gender gaps in educational enrolment are low or in favour of women, particularly in tertiary education (5 percentage points in favour of women). Enrolment rates for women, however, are below the MENA regional average in all school levels (UNESCO, 2021[2]). The OECD Programme for International Student Assessment (PISA) reveals that in Jordan girls outperform boys in all subjects, including mathematics (Table 4.1). Yet, there are few women pursuing careers in science, technology, engineering and mathematics (STEM) disciplines. Less than a quarter of Jordanian researchers in STEM subjects are women, a lower share than that observed in some regional peers such as Egypt where more than 40% of STEM researchers are women (UNESCO, 2021[3]). Furthermore, female students have been penalised more than male students by the COVID-19 pandemic and related containment measures due to their more limited access to technology and higher domestic responsibilities (CSS, 2020[4])

A growing pool of female talent in Jordan has not translated into better labour market outcomes for women. The female labour force participation rate is among the lowest in the MENA region and the world, at only 14%, compared to a male participation rate of 54% (Figure 4.1). Moreover, the female labour force participation rate has only increased by about 2 percentage points since 2000. Unemployment affects women more than men: 24% of women compared to 16% of men (ILO, 2021[6]). The unemployment rate of women with tertiary education is even higher than that of women with lower levels of education. The pandemic and related mitigation measures have penalised female employment more than male employment. A survey of private sector employees conducted in Jordan in May 2020 found that nine out of ten respondents who had been laid off due to the COVID-19 crisis were women (CSS, 2020[4]). Women in Jordan, like women globally, are paid on average less than men. After taking into account factors such as education, age, working time status and public and private sector, the mean hourly wage gap in Jordan is 15.5%, lower than that of the average upper middle-income country (20.9%), but higher than that of some regional peers such as Egypt (11.6%) and Tunisia (14.5%) (ILO, 2018[7]). According to a report prepared by the Jordanian National Commission for Women (JNCW), during the COVID-19 pandemic, women were affected more than men by wage cuts due to their lower bargaining power (JNCW, 2020[8]).

As in most countries, relatively more women than men work in the public sector (37% compared to 18% for men). This share is also higher than the MENA average (31%) and the OECD average (19%). About 70% of women are employed in services such as education, health and social work, and other non-market services, compared to about 34% of men (Figure 4.2). Studies show that women have been disproportionately affected by the COVID-19 crisis due to their high representation in the health and education sectors. Women working in these sectors have seen their workload increase dramatically and have been at greater risk of being infected (UN Women, 2020[10]). Women in Jordan also face significant gender occupational segregation. As in the rest of the MENA region, women are more likely to work in elementary occupations, clerical support workers, technicians and associate professionals than their male counterparts. Moreover, only 4% of women are managers, compared to 7% of men (ILO, 2018[11]). Gender gaps are also significant in the political and legal professions: in Jordan, women hold less than a quarter of cabinet posts and only 22% of judges and 26% of lawyers are women (Jordan, 2021[12]).

Consistent with global and regional trends, women in Jordan are less likely than men to be in informal employment: 30% of women compared to 56% of men (ILO, 2021[13]). Both shares are lower than those observed in the MENA region (45% for women and 58% for men). The lower presence of female workers in informal employment is explained by the fact that a large share of women are employed in the public sector, which is more likely to offer formal employment contracts and better access to social protection (OECD/ILO/CAWTAR, 2020[14]). In line with what is observed in most countries, the share of Jordanian women in informal employment is significantly higher in agriculture, 93%, although less than 2% of women work in the sector. Immigrant women, particularly Syrian refugee women, are also more likely to have informal jobs than Jordanian women (OECD/ILO/CAWTAR, 2020[14]). Refugee women have been disproportionately disadvantaged by the pandemic and lockdown measures. A survey conducted in April 2020 among women beneficiaries of UN Women Oasis who were employed in the informal sector before the onset of the crisis revealed that 99% of them had lost their jobs. These women did not have access to unemployment benefits and faced an increased risk of gender-based violence, food and economic insecurity (UN Women, 2020[15]).

In Jordan, women are underrepresented among entrepreneurs. According to the Global Entrepreneurship Monitor (GEM) 2019-20, only 59 women engage in entrepreneurial activities for every 100 men. Moreover, the COVID-19 crisis has hit female-owned businesses harder. A survey indicates that a higher proportion of female than male business owners (59:51) reported accumulating large instalments/debts during the pandemic (CSS, 2020[4]). This is also due to the greater difficulties women have in accessing credit. Access to financial and productive resources, in particular land, is essential to start a business, as these resources can be sold or used as collateral for loans to finance the business. The OECD’s Social Institutions and Gender Index (SIGI) 2019 indicates that women in Jordan face one of the highest levels of discrimination in access to productive and financial resources in the world: 43%, compared to a global average of 27%. The SIGI results also show that women face a very high level of discrimination in relation to legal rights to inherit land and non-land assets. Difficulties in accessing formal financial services is a critical obstacle to female entrepreneurship. In Jordan, only 27% of women have a bank account, compared to 56% of men, and only 14% of women report borrowing from financial institutions, against 19% of men (World Bank, 2017[16]).

Discriminatory social attitudes and norms hold back women’s economic participation in Jordan. According to the SIGI results, 30% of the Jordanian population says that it is not acceptable for a woman to work outside the home to get paid, 18% of women in Jordan condone domestic violence under certain circumstances and 24% of women report having experienced domestic violence at least once in their lives. In addition, only 38% of men find it acceptable for women to work in mixed workplaces and only 26% accept that women can go home from work after 5pm (World Bank, 2018[18]). Moreover, women in Jordan, as in most countries, invest more time than men in unpaid work, such as childcare, care of the disabled and elderly, and domestic work. In particular, Jordanian women spend 17 times more time than men in unpaid work (compared to a global average of 3.2), while men spend 6.5 times more time than women in paid work (compared to a global average of 1.8) (UN Women, 2020[10]). Furthermore, the pandemic has led to an increase in women’s unpaid care workload as a result of school closures and the interruption of market services that are substitutes for home production (e.g. restaurants). In Jordan, it is estimated that for married women with school-age children, the increase in unpaid working time has been up to 18-24 hours per week. Particularly in the case of women in paid employment, this has created a workload of 80-85 hours per week (UN Women, 2020[10]).

Through the operations of foreign affiliates of MNEs, FDI can contribute to improving women’s inclusion in the host country labour market (Box 4.1). This section discusses the contribution of FDI to women’s economic participation in Jordan, particularly in relation to employment, wages, career progression and entrepreneurship. An assessment of the channels through which FDI can influence women in the host labour market is conducted, with a focus on the employment activities and practices of locally established foreign affiliates and supply chain linkages between domestic and foreign firms.

During the last two decades, about 70% of greenfield FDI flows in Jordan have been directed to energy (oil and gas) and real estate services, two sectors dominated by men. About 20% of greenfield FDI flows went to the manufacturing sector, which employs significant proportions of women, especially in garments and textiles. Although this is a significant share, greenfield FDI flows into the manufacturing sector have declined steadily since the 2008 global financial crisis. A bit less than 10% went to market services such as finance, ICT, transport and tourism. Although the share of greenfield FDI in these sectors is still modest, these sectors have attracted increasing flows in recent years. A negligible share of greenfield FDI flows went to sectors such as education, health and social services, where almost 70% of women are employed (Figure 4.2). A closer look at how greenfield FDI contributes to gender employment equality in Jordan shows that greenfield investment projects are prevalent in sectors that have relatively lower shares of female than male employees, such as energy, construction, real estate and business services (panel a, Figure 4.4). Similar results are observed in most MENA and OECD countries, where FDI also tends to be concentrated in male-dominated sectors such as construction, real estate, transport services and medium/high value-added manufacturing. These include countries with high levels of gender equality such as Norway, Sweden, Germany and Finland. A negative relationship between FDI and gender employment equality is also often found in countries with large natural resource sectors such as Qatar and the United Arab Emirates.

At the same time, greenfield FDI in Jordan is concentrated in sectors where the wage gap between women and men is relatively lower (Panel B). This suggests that women working in the male-dominated energy, construction, real estate and business services sectors have on average better paid jobs (e.g. white-collar jobs such as accountants, architects, designers) than men (e.g. blue-collar jobs such as construction workers, machine operators, truck drivers). A positive association between greenfield FDI and gender pay equality is also observed in more gender-inclusive countries such as Norway, Sweden and Finland compared to less gender equal countries such as Egypt, Turkey and Mexico.

About 20% of greenfield FDI received by Jordan in the last two decades was directed to the manufacturing sector. Following the 2008 financial crisis, however, greenfield FDI flows into manufacturing have progressively decreased due to a loss of competitiveness in the sector (Chapter 2). Greenfield manufacturing investment is prevalent in sectors such as garments, textiles, food and chemicals, which have relatively high shares of women (Figure 4.5). Since the 1990s, many foreign garment and textile companies have located in Qualifying Industrial Zones (QIZs) to take advantage of duty-free exports to the United States (Box 3.2 in Chapter 3). Many women, in particular immigrant from Bangladesh, China, India, and Sri Lanka, have found work in these zones (World Bank, 2011[20]). Greenfield FDI is also concentrated in industries with relatively higher female labour intensity in several MENA and OECD countries with large food and garment industries, such as Tunisia, Egypt and Mexico. This positive relationship between greenfield FDI in manufacturing and female employment is often observed in countries with a comparative advantage in low value-added industries. Such industries tend to employ low-cost labour, including many women (OECD, 2019[21]).

Greenfield FDI in Jordan is also concentrated in industries with a higher share of companies with women in top positions and female principal owners. These industries are the same ones that employ higher shares of female workers, namely food, clothing and textiles. This suggests that these FDI-intensive industries create jobs for women not only in low-skilled, labour-intensive positions such as assembly work, but also in higher-skilled jobs such as management. FDI is directed towards industries with higher shares of companies with women in top positions and female principal owners also in most MENA and OECD countries with important food and garment industries.

Foreign investors in Jordan outperform domestic companies on several performance measures, but not always in terms of gender equality (Table 4.2). Foreign firms are more productive, pay higher wages (as suggested by their higher annual labour costs), are more export-oriented and have a higher percentage of female employees (36% compared to 24% for domestic firms) than their domestic peers. A lower percentage of foreign firms, however, have female top managers (4% compared to 6% of domestic firms) and female principal owners (11% compared to 21% of domestic firms).

Similar results apply to other countries in the MENA region, e.g. Tunisia and Egypt, as well as to several OECD countries. While foreign firms tend to have higher proportions of female workers (panel a, Figure 4.6), they are less likely to have female top managers (panel b) and female principal owners (Panel C) than domestic firms. The point estimates, however, are not always statistically significant, suggesting that differences between foreign and domestic firms in relation to gender practices, if they exist, should be attributed to factors other than ownership, for example the sector or the nationality of the firm. Indeed, recent studies find that firms from more gender-equal countries tend to hire more women, including in top positions, and to have more gender-inclusive employment practices than firms from less gender-equal countries (Kodama, Javorcik and Abe, 2018[22]; Tang and Zhang, 2017[23]).

A database of companies listed on the Amman Stock Exchange (ASE) provides additional information on gender-related employment trends in foreign and domestic companies. Most of the companies operate in the financial sector, however the database also covers companies in other services sectors and manufacturing. The data show that foreign listed companies account for 77% of total female employment, corresponding to more than 9 400 jobs (domestic companies account for the remaining 23%, corresponding to about 2 800 jobs). They also show that foreign listed companies employ higher percentages of non-Jordanian women than domestic companies, especially in services (Figure 4.7).

Further insights on the employment practices of foreign investors are provided by some studies on Qualifying Industrial Zones (QIZs), where many foreign companies in the garment and textiles industry have located since the 1990s to take advantage of duty-free access to the US market (see Box 3.2 in Chapter 3). More than half of the workers employed in QIZs are women and most of these women are immigrants, predominantly from Bangladesh, China, India, and Sri Lanka (Government of Jordan, 2019[24]). Working conditions of women in QIZs have often been described as difficult: women tend to be employed as line workers, are underpaid and in some cases have to travel significant distances because the zones are located far from villages (World Bank, 2011[20]). These are some of the reasons why only a few Jordanian women have been employed in QIZs (Bolle, Prados and Sharp, 2006[25]). Most women in QIZs also have low levels of education, which limits their opportunities for training and promotion. A wide range of labour rights violations have also been recorded within QIZs, and the country was included on the US State Department’s list of goods produced by child labour or forced labour from 2009 to 2016. The government has recently undertaken measures to improve working conditions in QIZs, also with the aim of attracting Jordanians job seekers, including women.

In Jordan, supply chain linkages between domestic and foreign firms are lower than in other non-OECD countries (Chapter 2), but still significant especially in some sectors that employ high proportions of women (Figure 4.8). For example, in the garment sector where more than 80% of workers are women, about 40% of inputs bought by foreign firms are of domestic origin. Higher or similar shares are observed in food (60%) and chemicals (39%), two sectors that employ significant proportions of women. Supply-chain linkages between foreign and domestic firms are an important driver of job creation for women, especially in female-dominated industries such as garments, textiles and light electronics, as several studies conducted in Asia have shown (Carr and Chen, 2005[26]). These studies, however, also highlight that job opportunities created through supply chain linkages, particularly via subcontracting and outsourcing, are often associated with precarious work conditions. In some countries, these linkages have also encouraged the proliferation of jobs outside the formal economy (Braunstein, 2009[27]).

Studies conducted in Jordan in the early 2010s indicate that the operations of foreign firms led to positive spillovers to their suppliers and buyers in terms of job creation (Chapter 3). However, these spillovers were significantly smaller in the manufacturing sector, particularly in the pharmaceutical industry (Sahnoun et al., 2014[28]). This could be explained by the fact that supply-chain linkages between foreign and domestic firms are weaker in Jordan than in other countries. Moreover, recent evidence suggests that foreign firms purchase their inputs mainly from other locally established foreign firms (OECD, 2021[29]).

The following section examines the institutional framework influencing the impact of FDI on gender equality and women’s empowerment in the labour market. It discusses how gender equality goals are integrated and supported by national strategies. It then identifies the governmental institutions responsible for designing and implementing relevant policies and programmes and assesses their co-ordination mechanisms.

The promotion of women’s economic participation is high on Jordan’s political agenda and well reflected in the country’s strategic planning documents (Box 4.2). The National Strategy for Women, prepared by the Jordanian National Commission for Women (JNCW), is a key reference point for women’s rights. The current strategy for 2020-25 (JNCW, 2020[30])) aims to create decent jobs for women and to promote female entrepreneurship, leadership opportunities for women, education for girls and the provision of gender-sensitive infrastructure (e.g. safe and accessible transport). Another important policy document is the Women’s Economic Empowerment Action Plan 2019-24 (World Bank, 2019[31]), developed by the Mashreq Gender Facility under the responsibility of the JNCW, which emphasises the need to strengthen the government’s capacity to address challenges to women’s economic participation.

Jordan’s policy priority of increasing the economic participation of women is well aligned with its ambition to become a prosperous, sustainable and inclusive economy, as described in its national development plan Vision 2025 (Government of Jordan, 2020[32]). Vision 2025 provides a roadmap for Jordan’s future development in which economic growth is linked to increasing citizens’ well-being, reducing poverty and unemployment, and improving the economic participation of vulnerable groups, such as youth and women. According to Vision 2025, citizens, one of the four key pillars of the plan, are at the centre of this development process and their increased participation in the labour force, employment and education are important conditions for achieving the target of a 7.5% GDP growth rate by 2025. The development plan contains several objectives to improve women’s participation in economic life and sets an ambitious target to increase women’s participation in the labour force by 24% by 2025. The strategy gives private investment, particularly foreign investment, an important role and identifies sectors with high growth potential, including sectors that employ many women, such as health care and educational services.

Jordan’s goal of improving women’s economic participation is also supported by its investment promotion strategy (JIC, 2016[33]). While the strategy does not contain explicit references to gender equality or women’s empowerment, it emphasises the importance of attracting foreign investment that creates quality jobs. The strategy refers directly to Jordan’s economic development plan, Vision 2025, which places considerable emphasis on the well-being of all Jordanian citizens and aspires to a model of economic growth that provides opportunities for all. In addition, the strategy identifies a list of target sectors for investment promotion, including major employers of women such as chemicals, consumer products (e.g. cosmetics), garments and health care. Companies investing in these sectors are eligible to receive incentives and other benefits, which can support gender equality and women’s empowerment through the creation of job opportunities for women. Several other priority sectors identified in the strategy, such as tourism, business services, information technology, have the potential to create many jobs for women, as they are main employers of women globally.

While gender equality goals and the role of investment in supporting Jordan’s sustainable and inclusive growth are well reflected in the various strategies, the process of designing and co-ordinating these strategies could be improved. All sectoral strategies refer to Vision 2025, but they are all introduced separately with little cross-referencing. Some strategies have reached the end of their applicability but have not been renewed (e.g. Jordan’s Investment Strategy 2016-19). Others have been updated but are not available online or are not accessible in English (e.g. the National Strategy for Women 2020-25). Jordan’s governance framework could benefit from an alignment and greater continuity of strategies. Information could be centralised on a single platform with links to various ministries’ websites and made easily accessible to various users, including ministries, agencies, investors and all actors involved in improving the impacts of FDI on women’s economic participation.

The policy framework underpinning positive impacts of FDI on gender equality and women empowerment in the labour market is governed by a complex network of governmental (ministries, the central bank, autonomous governmental bodies, implementing agencies) and non-governmental actors (private entities, non-profit organisations, international donors) with responsibilities and functions in different policy areas, such as investment, entrepreneurship/SMEs, labour market and skills polices, and gender mainstreaming (Figure 4.9).

The Jordanian Investment Commission (JIC) – MoI since 2021 – is the body responsible for promoting and facilitating foreign investment in the country. MoI also functions as a support agency for promoting exports in international markets. MoI is an autonomous and independent agency and is part of the Investment Council chaired by the Prime Minister and the Minister of Defence. Its services include providing information to foreign investors on investment opportunities in Jordan, managing registration and licensing of economic activities, including within development and free zones, granting incentives to investors, providing after-care services. MoI hosts the National Contact Point for Responsible Business Conduct (NCP for RBC), which is in charge of promoting the OECD Guidelines for Multinational Enterprises, including in relation to gender issues.

Policies to support women’s inclusion in the economy pertain to various policy areas and involve various governmental actors, such as the Ministry of Industry, Trade and Supply, the Ministry of Labour, the Ministry of Education, the Ministry of Higher Education and Scientific Research and their implementing agencies. The Jordanian National Commission for Women (JNCW), the main focal point for women’s affairs in Jordan, plays a key co-ordinating role on gender issues between these institutions.

The JNCW is a semi-governmental body that serves as a reference authority for women’s affairs, women’s empowerment and the promotion of gender equality in all spheres of life. Chaired by HRH Princess Basma Bint Talal, the JNCW’s board consists of 22 members from relevant ministries, national councils and institutions and civil society. Its mandate is to mainstream gender into the political agenda and to revise and develop policies, plans and laws to ensure gender equality and eliminate gender-based discrimination. It also advocates for various issues through consensus building and coalitions with civil society and produces studies and guidelines on particular topics. Through its mandate, the JNCW has established gender focal points within relevant ministries to mainstream and integrate gender perspectives in their policies and programmes.

Entrepreneurship policy is the responsibility of the Ministry of Industry, Trade and Supply (MoITS). Jordan Enterprise Development Corporation (JEDCO), a key implementing agency of MoITS, supports the development of emerging enterprises and small and medium-sized enterprises (SMEs), including women-owned enterprises, through tailored technical and financial support. Despite the role that entrepreneurship, particularly SMEs, play in integrating women into the economy, MoITS does not have a gender unit.

The Ministry of Labour (MoL) is the main authority for labour policy, including vocational education and training policies, and supervises labour and employers’ unions (Chapter 3). The MoL has a gender unit that is responsible for increasing women’s participation in the labour market and raising awareness about the role of women in economic development and their rights and responsibilities as set out in the Labour Law. The Vocational Training Corporation (VTC), one of its implementing agencies, is responsible for providing vocational training opportunities to workers. Furthermore, the MoL chairs the board of the Development and Employment Fund, a financially and administratively independent entity, whose mandate is to provide adequate funding for low-income and unemployed individuals. Education and training policies are the responsibility of the Ministry of Education and the Ministry of Higher Education and Scientific Research. Both ministries have a gender unit that is responsible for integrating a gender perspective into their policies, plans and programmes.

The Ministry of Planning and International Co-operation (MoPIC) participates in the formulation of general economic and social policy and supports the development of programmes and plans for its implementation. It co-ordinates and assists the Department of Statistics in determining the types of economic, social and demographic information and other statistical information, including gender-disaggregated data, the government may need for development plans. MoPIC is also responsible for developing and improving relations with donors and international financial institutions and co-ordinating and managing funding for development projects. The Gender Unit within the Ministry of Planning and International Co-operation has the mandate to train Ministry staff on gender mainstreaming and gender analysis, build the capacity of gender units in close collaboration with the JNCW, serve as a focal point for donors, and facilitate collaboration on gender issues between the ministry and other institutions.

In addition to government institutions, several private actors and non-profit organisations develop and implement policies that support the economic inclusion of women. These include the Jordan Forum for Business and Professional Women (a non-profit, non-governmental association of Jordanian business and professional women), the Jordan Loan Guarantee Corporation (a public company that provides loan guarantees for SMEs), the Microfund for Women (a non-profit microfinance institution for women entrepreneurs registered with the Jordanian Ministry of Industry and Trade and supervised by the Central Bank), Tamweelcom (a microfinance company, which supports micro and small business entrepreneurs), and the Royal Scientific Society (a non-profit organisation that provides consultancy, ICT services, training and certification services, among other services).

Co-ordination between governmental entities in charge of investment and gender policies is crucial to ensure the complementarity of their actions and their alignment with broader national development objectives. Several mechanisms exist to ensure inter-ministerial co-ordination. These are the Investment Council (IC), the National Contact Point for Responsible Business Conduct (NCP for RBC), gender units located in some ministries, and the Inter-Ministerial Committee (IMC) on Women’s Empowerment and Gender Equality (Figure 4.10).

The IC oversees the management and development of the national investment policy. It is chaired by the Prime Minister and the Minister of Defence, and includes among its members MoI, the Ministry of Trade, Industry and Supply (MoTIS), the Ministry of Labour (MoL), the MoPIC and the Central Bank of Jordan. Despite its co-ordination function between various ministries, it is not clear whether and how the members of the Investment Council use this platform to integrate gender considerations into investment policy. Among the IC members, the MoL and the MoPIC are the only ministries with a gender unit.

In addition, MoI hosts the NCP for RBC. The NCP, established following the adherence to the OECD Guidelines for Multinational Enterprises in 2013 (Box 4.4), has a dual mandate: to promote the OECD Guidelines and related due diligence guidance, including on gender issues, and to handle cases (referred to as ‘specific instances’) as a non-judicial complaint mechanism. The NCP is therefore a potential important link between investment policy and gender equality in Jordan. To date, however, the NCP has been largely inactive and no information is available on its activities and resources.

Gender units are an important tool for mainstreaming gender in the activities of key ministries. They are co-ordinated by and report directly to the Jordan National Commission for Women (JNCW). In collaboration with the JNCW, the gender units work to make progress on gender equality and women’s empowerment in specific areas. They are present in several ministries, including the MoL, MoPIC, the Ministry of Education (MoE) and the Ministry of Higher Education and Scientific Research (MoHESR). Despite the central role that entrepreneurship and SME policies play in the economic empowerment of women, MoTIS does not have a gender unit.

The Inter-Ministerial Committee (IMC) on Women’s Empowerment was established in 2015 to facilitate co-ordination in government on gender actions, in accordance with the goals set out in Jordan Vision 2025. The IMC works at the ministerial level with a rotating chair and includes among its members the Secretary General of the JNCW. The IMC ensures the adoption of plans, policies and programmes to promote gender equality and women’s empowerment, and in securing the necessary funds from government budgets for the implementation of these policy measures.

In addition to these co-ordination mechanisms, the MoPIC, which is responsible for the preparation of the National Economic and Social Development plan, plays a key role in ensuring the overall coherence of sectoral strategies and plans with national development objectives. MoPIC is also in charge of co-ordinating relations with donors and international financial institutions and managing funding for development projects. Together with the MoL, the MoPIC is an important link between investment policy and gender equality and women’s empowerment policies as, in addition to being a member of the Investment Council, it is linked to the JNWC through the gender units.

At the legislative level, the Jordanian Women Parliamentarians Forum and the Commission for Women and Family Affairs in the House and Senate are responsible for reviewing legislation on women, family and children, and overseeing policies, plans and programmes for the social, cultural, economic and political empowerment of women. It is not clear to what extent these mechanisms are capable of ensuring that gender considerations are included and taken into account by the parliament when designing laws in areas such as investment and entrepreneurship/SMEs.

This section analyses the policy framework that supports positive gender impacts of FDI. It examines regulatory restrictions on FDI, legal barriers to women’s economic participation, proactive policies and programmes at the intersection of investment promotion and gender equality and Jordan’s main international commitments in the field of women’s rights.

Regulatory restrictions on FDI can undermine the positive impact that FDI can have on gender equality and women’s empowerment in the labour market, particularly in sectors that employ, or have the potential to employ, many women. Overall, Jordan has rather high FDI restrictions compared to the OECD average and other peers in the region such as Tunisia, Morocco and Egypt. Jordan’s score stems mainly from equity constraints in typically male-dominated services sectors such as real estate services, transport, wholesale and retail trade, construction and business services (Figure 4.11). While these sectors employ predominantly men, they account for 12% of total female employment, corresponding to more than 31 000 jobs. Other service sectors, particularly hotels and restaurants, and financial services also have higher levels of FDI restrictions than the OECD average. As these service sectors tend to employ many women globally, these scores suggest that by lifting FDI restrictions foreign investors may generate jobs that could be filled by women.

Although the FDI index does not cover the education and health sectors, which together account for 55% of female employment in Jordan, some restrictions, particularly on foreign personnel, also affect these sectors and, while not discriminatory, are particularly burdensome for foreign investors. Restrictions on foreign workers apply to all sectors of the economy in Jordan. According to the Labour Law No. 8 of 1996 (“Labour Law”), foreign workers cannot be employed without the prior approval of the MoL and the duration of the work permit cannot exceed one year. The Labour Law also states that foreign employees must have qualifications not available in Jordan and that priority should be given to Arab citizens. The Jordanian nationality requirement for key personnel in certain sectors has recently been relaxed. From 2019, employers can hire non-Jordanians in a number of high-skilled occupations, particularly in the ICT, energy, engineering, professional services and banking sectors. However, employers must demonstrate that no qualified Jordanian workers are available for the position before hiring a foreign worker. Moreover, work permits for these categories of workers carry higher fees than normal work permits and are not renewable (Chapter 3).

Restrictions on foreign personnel are also a significant obstacle to the employment of immigrant women, particularly Syrian refugee women. An Investment Motivation Survey conducted in Jordan by the World Bank (2016[35]) in collaboration with the Jordan Investment Commission reveals that foreign investors, especially those driven by efficiency-seeking motivations, in low-value-added manufacturing sectors (e.g. paper, furniture, electronics) would be willing to hire Syrian refugee women if a work permit was granted to them. Since 2015, however, several policy measures have been taken to facilitate access to the labour market for Syrian refugee women through the issuance of work permits and, as a result, the share of Syrian women who have found work in both domestic and foreign firms has increased (ILO, 2017[36]).

Domestic labour market laws and regulations play an important role in facilitating positive impacts and minimising possible negative effects of FDI on local women workers. These laws and regulations, or the lack of them, affect women’s ability to enter the market, their working conditions, the possibility to reconcile personal and professional life and to make a career, to open and run a business. The World Bank’s Women, Business and the Law (2021[37]) measures the legal differences between women’s and men’s access to economic opportunities through several indicators, some of which relate to women’s participation in the labour market. The indicators, which take a lower value in the case of greater restrictions, show that in Jordan legal barriers hinder women’s ability to enter and remain in the labour force (“workplace”), to have adequate social protection in case of maternity (“parenthood”), and to inherit assets (“assets”) (Figure 4.12). The indicators also show that, compared to other countries in the region, Jordan has a less gender-inclusive legal and regulatory framework, especially in the areas of ‘workplace’ and ‘parenthood’.

In the last decade, Jordan has made important progress removing legal barriers to women’s participation in the labour market. Recent amendments to the Jordanian Labour Law No. 8 of 1996 (“Labour Law”), introduced by Law No. 14 of 2019 (“Amended Law”), have addressed some important gaps with respect to gender equality in the labour market. The Amended Law introduced the concept of ‘wage discrimination’ (Article 2), defined as inequality in the payment of wages between employees on the basis of gender, and imposes a penalty on the employer in case of discrimination (Article 17). The Amended Law also introduces a three-day paid paternity leave after the birth of a child (Article 66). Another important amendment concerns Article 72 of the Labour Law, which imposes an obligation on the employer to establish a day care facility when there are 15 or more children under five years of age among both male and female employees (whereas previously the obligation existed only in the case of female employees).

In addition to these amendments to the Labour Law, Jordan has adopted a number of laws and regulations to encourage women’s participation in the workforce. In 2010, Jordan adopted a new Social Security Law (No. 7) with the aim to increase women’s labour market participation and social insurance enrolment. As a result of the reform, maternity benefits are fully financed by a gender-neutral increase in contributions, resulting in no economic disincentive for employers to hire women. Decision 2/2018 of the Ministry of Labour has abolished night work and sectoral restrictions for women (Article 69 of the Labour Law, however, states that a ministerial decree may be issued to restrict women’s working hours and choice of sectors/industries). Since 2017, women have the right to choose, with the consent of the employer, a flexible working arrangement adapted to personal and family circumstances (Regulation No. 22 of 2017). In addition, Jordan has introduced provisions prohibiting gender discrimination in financial services (Instructions of the Central Bank of Jordan No. 56/2012, amended by Circular No. 27 January 10091, Article 30).

Nevertheless, major legal barriers to women’s participation in the labour market persist. Article 61 of the Personal Status Act (2010) states that women need their husband’s consent to work outside the home. Jordanian women are only entitled to 10 weeks of paid maternity leave (12.8 weeks in the public sector), which is less than the ILO’s recommended duration of 14 weeks (Labour Law, Art. 70). Furthermore, the current laws are insufficient to effectively address sexual harassment in the workplace, as they do not cover all forms of abuse (e.g. sexual abuse perpetrated by a co-worker) (World Bank, 2020[38]). The legal framework on inheritance remains discriminatory against women, penalising their ability to inherit productive and financial assets, and potentially limiting their capacity to become entrepreneurs.

In addition to regulations and laws, a variety of other policy instruments can be used to support a positive contribution of FDI to gender equality. These include financial support measures (e.g. tax and financial incentives), technical support programmes (e.g. training and skills development programmes), information and facilitation services (e.g. employment information programmes, childcare facilities). Some of these policy instruments directly leverage FDI, while others aim to improve gender equality more broadly.

An OECD mapping exercise conducted in the first half of 2021 identified 14 policy initiatives that support the positive impact of FDI on gender equality in Jordan’s labour market (Annex 4.A). Some of these policy initiatives promote more than one gender equality objective and may comprise several policy instruments. The data collected through the mapping exercise show that half of these policy initiatives promote women’s entrepreneurship, while about one-third aim to increase women’s employment and improve women’s opportunities for career advancement and skills development (Figure 4.13, Panel A). Only one policy initiative focuses on women’s wage and non-wage working conditions.

Financial incentives are the most widely used policy instrument support gender equality and women’s empowerment in Jordan (panel b). Notably, half of all policy initiatives include some type of financial incentive. Financial incentives are mainly provided in the form of grants and loans to women-owned businesses. Examples are the loans to small women farmers provided by the Jordan Enterprise Development Corporation and the loans to low-income women provided by the Employment and Development Fund.

Jordan is one of the few countries to grant tax incentives to companies that support gender equality. Specifically, Regulation No. 18 of 2020 stipulates that a company can obtain a reduction in corporate income tax if it employs a share of Jordanian women and workers with disabilities of no less than 15% of the workforce (no less than 25% for textile and garment companies located in QIZs). Moreover, various tax incentives (e.g. tax exemptions, corporate tax reductions) are granted to investors in QIZs where many women are employed.

General skills programmes are the most commonly used policy instrument after financial incentives. Examples include the Productivity Production Centres programmes launched by the Royal Scientific Society and the Ministry of Planning and International Co-operation, which provide training and skills development programmes for low-income women, or the Human Resources for Health programme of the Ministry of Health, which aims to develop the management and leadership skills of women in the health sector. General skills programmes are sometimes combined with other policy instruments. For example, the Development and Employment Fund provides training for women entrepreneurs together with financial assistance. Noteworthy is the Workforce Development (WFD) project of the US Agency for International Development (USAID), implemented through the Ministry of Labour (MoL), which supports the development of certification and accreditation centres to increase employment in the private sector, especially of women.

Business development services are also a widely used tool. These are an important component of several support programmes for women entrepreneurs. For example, JEDC’s programme for small farms with a focus on women provides technical assistance to new women entrepreneurs. Women’s Economic Empowerment Units (WEE) within local municipalities, established in 2020 by the Arab Women Enterprise Fund, aim to improve women entrepreneurs’ access to local services, licences and permits. None of these initiatives explicitly seek to link women entrepreneurs to foreign enterprises, as is the case in other countries (Box 4.3).

Information and facilitation services are less frequently used. These include job information programmes for women, such as those offered in the context of the USAID’s Workforce Development Project, and a programme to increase the supply of childcare facilities within private sector companies promoted by the Ministry of Labour.

Comparing the data collected in Jordan with Tunisia, one of the countries in the MENA region that has made the most progress in terms of gender equality, shows similar results in terms of both the number and types of policies and programmes in place. In the first half of 2021, Tunisia had 17 proactive policies and programmes. Most of these policies and programmes aim to improve women’s entrepreneurship (65%). Improving women’s skills and increasing women’s employment are also policy objectives pursued by many policies (40% and 25%, respectively). Similarities with Jordan are also observed in terms of the policy instruments used (panel c). Just over 50% of the policy initiatives include financial or fiscal incentives for investment (more than 60% in Jordan) and provide technical support measure, particularly training and skills development programmes (nearly 80% in Jordan), and about 10% include information and facilitation services (about 15% in Jordan). However, the lack of more detailed information on these initiatives, for example on the budget allocated, number of beneficiaries, and so on, does not allow for a more accurate analysis between the two policy approaches and their impacts on gender outcomes.

Jordan has ratified the main international agreements promoting women’s rights, committing to harmonise national legislation with the principles and standards promoted by these agreements. In particular, Jordan ratified the Convention on the Elimination of Discrimination against Women (CEDAW) in 1992, albeit with reservations on a number of articles (Article 9 (2) on women granting Jordanian nationality to their children, Article 15 (4) on rights of movement and choice of residence, which was revoked in 2009, and Article 16 (1) (c,d,g) on equality in all matters relating to marriage and family relations). Moreover, the country has not yet ratified the Optional Protocol to the CEDAW Convention, thus denying women and NGOs the possibility to submit individual complaints to the CEDAW Committee on violations against women who have not received fair treatment by Jordanian courts.

Jordan has signed the 1995 Beijing Declaration and Platform for Action, which is considered the most important blueprint for the promotion of women’s rights. It was also among the first Arab countries to engage with the Millennium Development Goals and committed to the 2030 Agenda in 2015. Jordan has ratified important ILO conventions on gender issues, such as the Discrimination (Employment and Occupation) Convention (No. 111) and the Equal Remuneration Convention (No. 100). However, Jordan has not ratified the Convention on Workers with Family Responsibilities (No. 156) and the Maternity Protection Convention (No. 183). In 2013, Jordan adhered to the OECD Guidelines for Multinational Enterprises, pledging to encourage the positive contribution of multinational enterprises to social progress, including gender equality. This commitment has led to the establishment of a National Contact Point (NCP), which is responsible for promoting and ensuring adherence to the OECD guidelines (Box 4.4). So far, however, the NCP has remained largely inactive.

Jordan has signed several bilateral trade and co-operation agreements that contain gender-related provisions. The EU-Jordan Association Agreement, which was signed in 1997 and entered into force in 2002, contains a gender provision on social co-operation (Article 82 of Chapter 2). This provision points to “the promotion of the role of women in social and economic development through education and the media, in line with Jordanian policy in this area” as a priority action to consolidate social co-operation between the parties. Since January 2021, a similar provision also applies to the UK-Jordan Free Trade Agreement. As with most provisions in co-operation chapters, however, the enforceability of these non-economic commitments is rather weak.

The Canada-Jordan Labour Co-operation Agreement, which was signed in 2009 and entered into force in 2012 along with a Free Trade Agreement (FTA), contains several references to gender equality and gender issues. The agreement says that each party must ensure that its labour law and practices incorporate and protect internationally recognised labour principles and rights, including “the elimination of discrimination in respect of employment and occupation (including equal pay for women and men)” (Article 1). In addition, “gender issues, including the elimination of discrimination in respect of employment and occupation” is identified as an area for co-operation to improve labour principles and standards (Article 1 of the Annex, as referred to in Article 8). With regard to the application and enforcement of these provisions, the agreement provides for a binding state-to-state dispute settlement procedure to resolve non-compliance that may result in binding ‘monetary assessments’ enforceable in national courts (Articles 11-13). While the enforcement procedure seems to be sound, in practice the application of this type of clause is extremely rare. Moreover, the agreement does not provide any remedy or procedure for those who are not party to the treaty (e.g. aggrieved citizens) who might suffer most from any breach.


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