Geert Bekaert and Campbell R. Harvey's


Chronology of Economic, Political and Financial Events in Emerging Markets




Major Political and Economic Events




The Effective exchange rate was linked to the SDR.a


Removal of all restrictions on the export of national banknotes.a


Residents allowed to open accounts in foreign currency, with a cap on amount.a


Amman Financial Market opens for business.e Non-Jordanian Arabs permitted to buy shares in Jordanian firms without limit.a


Kim and Singal Liberalization date.


Some restrictions on foreign exchange controls eased. Increased ceiling on residents' foreign currency accounts. Overseas remittances can be made up to a limit.a


Central bank announced that commercial banks would be allowed to deal in forward foreign exchange contracts.a


Ceiling on residents foreign accounts raised.a


Central bank ordered all commercial banks and investment companies to invest at least 3% of total assets in government treasury bills and another 3.5% in government or corporate bonds. New investment incentives also proposed.a


Decree limiting foreign participation in banking to 49% was rescinded.a


Widened margin of Jordanian Dinar fluctuation against the Special Drawing Rights as a first step towards a complete flotation of the Jordanian Dinar. j


Contained speculation on the Jordanian Dinar by restricting transfer of foreign exchange to a limited number of activities. j


Encouragement of Investment Law of 1986 raises limit on foreign ownership from 49% to 99% for tourism, agricultural, or related services industries.e


Bekaert/Harvey Official Liberalization date. [NBER version].


50% Devaluation of the Jordanian Dinar.j Interest rate was liberalized. Mehrez and Kaufmann Liberalization date. a1


Commercial banks were prohibited from extending loans in dinars against foreign currency deposits and required to settle outstanding balances in three months.a3(first entry)


IFC Liberalization date.i


Central bank injects $500 million (10% of GDP) into banking system to meet the run on insolvent banks and to settle foreign deposits.m


Onset of Gulf War.


A reserve ratio of 15% was imposed on offshore banks belonging to Jordanian banks and financial companies.a3


85% of market participants are Jordanian.m


Lifted controls on outbound and inbound direct investments, allowed private holding of foreign exchange and other financial assets, provided market access to foreign financial institutions on a non-discriminatory basis.j Amman Financial Market turnover rose to $1,400 from $400 million in 1991. Boom fueled by expatriate money and expectations of a peace era expansion.n Thirteen new public shareholding companies with combined capital of $128 million sprung up while 26 existing companies boosted capital to $199 million. k


King dissolves National assembly in anticipation of elections for Parliament.


Political parties are legalized. The law allows for elections in 1993.


Parliament elections took place for the first time in 40 years.


Bank debt restructuring agreement.i


Government allows issuance of non-Dinar denominated shares. k New law imposes tough penalties on insider trading. k Free access to international financial markets remains restricted by administrative and foreign exchange regulations of the Central Bank.j


Government considering law to eliminate written approval necessary for foreigners to invest in equities.


Jordan and PLO signed an economic agreement. Agreement stressed economic cooperation in infrastructure, promotion of investments, and private sector cooperation.


Peace treaty signed with Israel.


Commercial banks were permitted to invest abroad up to 50% of their foreign currency holdings.a3


Foreign investment bylaws passed allowing foreign investors to purchase shares without government approval.t


Bekaert/Harvey Official Liberalization date. [Final version].


Parliament separates the Amman Financial Market's operational and supervisory standards.l


Foreign ownership represents between 15 to 20% of the total equities of quoted companies.j


80% of investors are Jordanian, Foreign capital inflows of $25 million. j


Israel elects Prime Minister Netanyahu.


Iraq agrees to all UN conditions.


First bank merger in the country's history, between Jordan National Bank and Business Bank.


A 15% reduction of a tax on certain capital increases.


King Hussein dismissed Prime Minister Abdul-Karim al-Kabariti. Former premier Abdul-Salam al-Majari replaced his post.


(Controls on direct investment) Restrictions on foreign nationals on holding majority stakes in most companies listed on the Amman Stock Exchange were lifted.


Restrictions on capital account transactions were liberalized.a3


Rising tension between Israel and Palestine.


The 50% ceiling on foreign stock ownership, with the exception of mining and construction, were waived.


Jordan signed an association agreement with European Union representatives that aims to establish a free trade zone over the course of the next 12 years.


Iraq agreed to supply Jordan with 4.8 million tons of crude oil at a considerable discount from market price.


The murder of senior Iraqi diplomat Hekmat Al Heji in Amman.


An agreement on weapons inspections between the U.N. and Iraqi president Saddam Hussein was reached. King Hussen remarked publicly that Jordan would not support any attack on Iraq.


Impasse in Middle East peace talks.


Jordan swore in new Prime Minister Fayez al-Tarwnah and appointed a new government late in the month.


Concern for King Husseinís health continued to cast a shadow over the Amman Financial Market.


King Hussein passed away on February 7. 


A new board for Amman Financial Market was elected.


Arab Bank reported a decent 1998 profit performance. But positive signs , such as reorganization of more than $800 million in Paris Club debt, and IMF approval of a $220 million loan package, failed to boost activity.


Cairo Amman Bank and Jordan Electric Power Company was sold by the Jordan Investment Corporation.


The local ASE (the Amman Stock Exchange) index fell below the 160 level for the first time since 1997. The government sold stakes in the Housing Bank, Jordan Worsted Mills, and the Jordan Ceramic Industries to the Social Security Corporation


Jordan and Israel renewed their bilateral trade agreement. Jordan's state-owned telecommunications company (JTC) was privatized with a 40% stake sold to France Telecom SA and its Arab minority partner. But the shares were not listed on the local exchange.


The Amman Stock Exchange (ASE) introduced electronic trading.


The ASE began implementing new directives that introduced internationally recognized market divisions and listing criteria. A government, with a large contingent representing the private business sector, was formed in Lebanon. GDP grew 3%, showing that Jordan had emerged from a decade-long recession, but the stock market continued its 18-month decline.


The ASE issued internal by-laws for dispute settlement. A Brokers' Guarantee Fund (BGF) was set up to cover broker defaults arising from trading on margin and was expected to contribute to securing sound settlement of executed trades on the ASE and provide assurance to dealers of timely settlements according to international standards as well as safe entry and exit from the market.


The ASE introduced remote access trading. Jordan signed a Free Trade Agreement with the U.S., paving the way for additional foreign investments and exempting exports from high customs duty.


The Jordan Securities Commission hosted more than 70 countries at the International Emerging Markets Committee meeting in Amman.


S&P revised the outlook on Jordan's long-term foreign currency rating to positive from stable.


The Amman Stock Exchange's performance was the strongest in the Middle East. S&P reaffirmed the ratings outlook.


In the third quarter, Jordan and Germany signed a debt swap worth US$11.5 million, at a 50% discount. Jordan and Iraq announced plans to build a pipeline to carry crude oil to a refinery at Zarqa. They also signed an oil protocol whereby Iraq will provide a total of 5.5 million crude oil and derivatives to Jordan.


Deputy Prime Minister Mohammed Halayqeh announced a US$423 million government plan to improve government services, develop local infrastructure, and execute new development projects to be launched in 2002.


Riots erupt in the southern town of Maan, the worst public disturbances in more than three years, following the death of a youth in custody.


Spat with Qatar over a programme on Qatar-based Al-Jazeera TV which Jordan says insulted its royal family. Jordan shuts down Al-Jazeera's office in Amman and recalls its ambassador in Qatar.


Jordan and Israel agree on a plan to pipe water from the Red Sea to the shrinking Dead Sea. The project, costing $800m, is the two nations' biggest joint venture to date.


Senior US diplomat Laurence Foley is gunned down outside his home in Amman, in the first assassination of a Western diplomat in Jordan. Scores of political activists are rounded up.


The Central Bank cut its benchmark discount rate by 50 basis points. The discount rate now stands at 4.5%.b1


The World Bank has endorsed a US$305m lending package to help support poverty reduction projects and to combat rising unemployment in the kingdom.


Italy has officially written off US$40.7m of external debt owed by Jordan under the aegis of a debt-swap agreement signed between the two countries in June 2000.b1


An increase in sales taxation from 2% to 4% is introduced on 91 basic goods and commodities, as part of efforts to plug any further widening of fiscal deficits beyond IMF-prescribed targets.b1


First parliamentary elections under King Abdullah II. Independent candidates loyal to the king win two-thirds of the seats.


Agreement has been reached between Israel and Jordan for the establishment of two new Qualified Industrial Zones (QIZ), in addition to an agreement to expand an existing joint industrial complex.


Prime Minister Ali Abu Ragheb yesterday appointed a new government, bringing in eight new faces but leaving key portfolios - including Finance, Planning and Foreign Affairs - unchanged.b1


Bomb attack on Jordan's embassy in the Iraqi capital Baghdad kills 11 people, injures more than 50.


Jordan's Central Bank retracts its decision to freeze accounts belonging to leaders of Hamas.


A new cabinet is appointed following the resignation of Prime Minister Ali Abu al-Ragheb. Faisal al-Fayez is appointed prime minister. The king also appoints the three female ministers.


King Abdullah II has dissolved the 55-member upper house and appointed a new senate.


Parliament has approved the cabinet's policy plans aimed at fighting poverty and addressing worsening economic conditions.


Jordan's King Abdullah and Syrian President Bashar al-Assad launch the Wahdah Dam project at a ceremony on the River Yarmuk.


Israel and Jordan agree a joint project to build a desert science centre on their shared border.


Eight Islamic militants are sentenced to death for killing a US government official in 2002.


Government unveils plans for Jordanian political reform.


The Jordanian government and the European Union (EU) have solidified their financial and political ties through a memorandum of understanding (MoU), which will see the transfer of 110m euro (US$132.4) to Jordan over a two-year period.


Following government approval, Jordan is set to carry out the necessary steps to join the 1984 Patent Co-Operation Treaty (PCT) and the 1989 Madrid Protocol on the international registration of marks.


Regulations on Foreign Investors


Restrictions: Foreign investors need approval from the prime minister for their interest securities. They are not allowed to own more than 49% of the outstanding share capital of a company, except tourism companies, in which 99% of the share capital may be in foreign hands. The repatriation of investment income is free of restrictions. The AFM can impose a 5% limit on price movement.

Taxation: None.a6


Restrictions: Foreigners may own any project except in construction contracting sector, commercial and commercial service sector and mining sector, where foreign participation may not exceed 50%. The investment by a non-Jordanian may not be less than JOD 50,000 except for participation in public shareholding companies.

Taxation: 10% dividend tax payable to all investors. No capital-gains tax.a7


Restrictions: 1. Foreign investors are limited to 60 percent ownership in publishing and in aircraft maintenance and repair services.b7

Taxation: No change.


Restrictions: 1. No more than 50% subscription in shares in the following major sectors: commerce and trade services, construction, contracting, and transportation. 2. Investments in the following sectors are not permitted for nonresidents: investigation and security, quarrying and mining, waste removal, sport clubs, and transportation of goods and passengers. 3. Non-residents are allowed to open bank accounts in foreign currencies.

Taxation: 35% capital gains tax on depreciable assets, 0% on shares. VAT tax rate is 13% effective January 1st, 2001 b1, b7