MARCH 15, 2011

A Voice for Young Entrepreneurs:
Jordan's Young Entrepreneurs Association

by Ngozika Amalu
This article is excerpted from
Strategies for Policy Reform, Volume 2: Engaging Entrepreneurs in Democratic Governance.

Amman, Jordan — Public participation is essential to achieving sustainable economic reform in a democratic process. Because the business sector plays a crucial role in growing the economy, representatives of business groups must be included in economic policy deliberations. In Jordan, however, few non-government bodies would bring business concerns to policy debate, or promote an independent and transparent review of policy. The Young Entrepreneurs Association (YEA) of Jordan, a membershipbased, non-government organization, has stepped in to fill this gap as an articulate representative of the private sector. YEA was founded in 1998 to encourage an entrepreneurial spirit and enhance the environment for business startups. In 2006, YEA partnered with the Center for International Private Enterprise (CIPE) to promote private sector advocacy and bring policy affairs to public attention. This partnership established Sawtouna, meaning “our voice,” as the analytical and advocacy arm of YEA. Through Sawtouna, YEA published policy papers and pursued a rigorous advocacy agenda aimed at easing the process of starting a business. As a result, the government adopted legislation to improve the environment for start-ups and encourage private sector growth in Jordan. The initiative enhanced YEA’s presence as an independent private sector advocacy group, and fostered an inclusive dialogue for future reform.

The Emerging Private Sector

When King Abdullah of Jordan assumed leadership, he carried out an assertive economic reform program, which had a number of successes. A strong information and communications technology sector emerged, several public industries were privatized and made more efficient, and Jordan joined the World Trade Organization. However, these reforms did not alleviate the economic hardships of most Jordanians. The government still lacked sufficient accountability and responsiveness towards its citizens.

YEA and CIPE sought to bring the voice of the private sector to the policy arena in order to ensure that reforms addressed the concerns of business. With Sawtouna, YEA focused the bulk of its efforts on improving the startupenvironment for small and medium enterprises. Sawtouna emphasized throughout its campaign that the pursuit of entrepreneurship should be open to all.

The primary method used by Sawtouna in its advocacy effort were the discussions and recommendations published in policy papers. Out of six papers, YEA focused its resources on promoting the subjects of two papers: one on reducing the minimum capital requirements for limited liability companies; and another on reducing and clarifying the requirements for registrations and licensing.

The first paper prompted the reduction of the minimum capital requirement. YEA successfully championed an amendment to Jordan’s Companies Law, which reduced the capital requirement for businesses seeking limited liability status from 30,000 to 1,000 Jordanian dinars. This amendment stimulated business activity and encouraged previously extralegal operations to join the formal sector. By the end of 2008, the reduction in the minimum capital requirement led to over 1,800 newly registered small and medium enterprises.
The second paper received the endorsement of the minister of trade and industry, who requested that Sawtouna formulate a detailed plan for legislative action on the subject of licensing and registration. To this effect, two research papers were presented to Parliament, one on temporary business licenses and the other on implementing a silence is consent rule. These reforms will circumvent bureaucratic bottlenecks and expedite the licensing and registration process for new entrepreneurs. CIPE supported Sawtouna’s research and drafting process by offering content discussions and editing the draft papers.

Coalition Building

Using past CIPE projects as examples, YEA developed a wide communications network and built a strong coalition to enhance Sawtouna’s capacity for reform. Promoting a more interactive approach to advocacy, the initiative launched a website for posting and discussing policy papers. To bring credibility to Sawtouna’s recommendations, YEA created a coalition of business leaders, politicians, government officials, and influential private sector organizations. Within this coalition, YEA secured the support of two former prime ministers, along with the minister of industry and trade and the minister of cultural development. In 2008, YEA brought together a group of 11 organizations representing different sectors of Jordan’s economy to sign a memorandum of understanding in support of Sawtouna’s advocacy. This enthusiastic private sector support that the project galvanized, coupled with the close working relationship between Sawtouna and members of parliament, was a driving force for the success of the initiative.

In the phases following the completion of the policy papers, Sawtouna actively reached out to members of parliament and the business community. Sawtouna hosted roundtables and forums with private sector leaders and high profile ministers. These meetings not only emphasized the necessity for reform and ensured recommendations were reviewed, but established YEA as a well-researched and articulate voice for the private sector. The result was that the Ministry of Trade and Industry assigned Sawtouna to work with the Companies Control Directorate, and then invited YEA to join the National Committee for reforming Bankruptcy Law. YEA was subsequently asked to support Jordan’s progress in intellectual property rights by contributing research to a position paper on Jordan’s intellectual property legislation, later submitted to the U.S. Trade Representative by the American Chamber of Commerce in Jordan.

The activities described in this case study were funded by the National Endowment for Democracy.

Sources
“Entrepreneurship is the Solution,” YEA Newsletter, March 2009.

“The Young Entrepreneurs Association’s Advocacy Role in Jordan,” Presentation

by Laith Al-Qasem, CIPE Middle East and North Africa Economic Reform Roundtable, June 19-21, 2008.


This article was featured in CIPE's most recent publication, Strategies for Policy Reform, Volume 2: Engaging Entrepreneurs in Democractic Governance, also available for Amazon Kindle

 

 

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CIPE is a core institute of the National Endowment for Democracy, which provides funding for many of CIPE's projects. CIPE is also an affiliate of the U.S. Chamber of Commerce.

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