Fuel Prices and Politics

Many Jordanians are celebrating the government’s decision to freeze current fuel prices for the remainder of this year. In explaining the decision, which led to the resignation of the Finance Minister in protest, the government clearly favored public sentiments over sound economic numbers. If not this year, the government will surely revisit fuel prices next year.

Energy is a hot issue globally in today’s mobile societies. Securing cost-effective and stable energy sources is an enormous challenge for non-oil producing nations, including Jordan. The situation in Jordan may be even more critical due to limited availability of alternative energy sources and a historic dependence of its socio-economic system on fossil fuels.

According to the latest statistics I was able to locate for the year 2000, the transportation sector accounts for about 40% of the total energy consumption in Jordan (source: World Resource Institute). Most official statistics place the number of vehicles operating in the country at more than 700,000. According to Jordan Traffic Institute’s statistics for 2004, passenger vehicles account for about 65% of the total vehicles registered in Jordan. Applying this percentage to the current estimate of 700,000 registered vehicles yields roughly 450,000 passenger vehicles. Further, the majority of these passenger vehicles are privately held (vs. the ones used for public transport such as taxis).

I could not locate concrete information on fuel consumption characteristics of motor vehicles operating in Jordan. However, small to midsize cars seem to dominate the fleet, with a growing number of gas guzzling sport utility vehicles (SUVs). So let’s use an ambitious average motor vehicle fuel economy rate of around 200 KM/20 liters (or 0.1 liter per KM). Every time these vehicles travel for one kilometer, they consume roughly 45,000 liters of gasoline, not counting trucks, buses, and other heavy equipment. If every motor vehicle traveled only 20 km on an average day, we are talking about 900,000 liters of fuel or well over JD 400,000 per day!

What does this mean?

First, Jordan must put in place policies that effectively curb fuel consumption while investing in alternative and renewable energy sources (such as wind and solar energies which are quite abundant in the country).

Second, the transportation sector, which consumes a significant portion of fossil fuels, must be tackled through a series of strategies, including but not limited to:

• Developing fuel consumption standards to greatly penalize fuel inefficient vehicles


• Providing incentives to individuals and businesses to encourage the use of hybrid vehicles (electric, electric/gasoline combination). A Hybrid Honda Civic for example yields 63% more fuel economy over its gasoline-based counterpart. Not to mention, a hybrid vehicle produces much less pollutants and noise than a gasoline-based vehicle.


• Improving public transportation in order to provide a viable alternative to driving to an increasing segment of Jordanians (especially in Amman)


• Developing and implementing land use and development policies which promote walking and public transport compared to the ugly urban sprawl plaguing Amman

Third, the government needs to address the impacts of rising transportation costs on the economy. Producers, service providers, and workers are negatively impacted by transportation costs to the point it can hinder Jordan’s economic competitiveness. Therefore, targeted subsidies combined with consumption reduction policies will still be needed to ensure Jordanian businesses and individuals have reasonable access to mobility.

Work has already begun on some of these steps.

For example, according to information on the Customs Department web page, hybrid vehicles receive a 26% discount in taxes. I wonder how many people are aware of this discount. This incentive clearly demonstrates that even when a tax incentive reduces government revenues it also reduces its expenditures in the form of fuel subsidies. The Greater Amman Municipality is amidst a major master planning project which promises to curb urban sprawl and bring back the old livable city.

However, what seems to be missing is a comprehensive national strategy that coordinates the sometimes conflicting work of several ministries, departments, and agencies. What is also missing are strategies to engage the public because public buy-in is critical for the success of any government policy.

It is hard to change old habits, but Jordan needs to act now before it is too late. By making a few sacrifices now, Jordanians can avoid making even more major concessions in the future and could ensure a better future for the whole country.

(Lack of) Truth in Advertising

I clicked on one of the ads for real estate development while reading Addustour online. So I scanned the company’s web page for information on the project and also the company itself.

The link to the Project Photos offers the following information (I am providing rough translation for those of you who can’t read Arabic):

Site:
The site was selected in Shafa Badran for this area enjoys unique and beautiful features:

• Easy access through Jordan Street
• It has two universities and a number of private and public schools
• It has commercial, entertainment, and service outlets
• Quiet and low population density
• High elevation of site and nice view
• Clean environment
  

Now these are fantastic claims, however, they are barely supported from the project pictures. Figure-1 is a print out of the company’s web page on Project Pictures, with a listing of the site attributes which I have translated above.

Figure-1 Project Pictures

Enlarging the first photo shows the land plot for the project (Figure-2). Is it just me or does the location sit lower than the surrounding properties???

Figure-2 Enlarged photo of project site

OK, never mind the project location. Let’s learn a bit about the company (About Us: About the Director and About the Company). Here is the translation for the About the Director information:

Company Director:
The director and partner in the xyz company for real estate investments is John Doe who has the following degrees and qualifications:

• Holds a B.S. in Civil Engineering since 1987 from xyz University
• Worked at Engineering Company as a Design and Project Engineer...
• Invested in real estate and founded Engineering Company for General Contracting...
• Invested in hotel suites and founded xyz Furnished Suites in...then returned to Hashemite Kingdom of Jordan
• Invested in furnished apartment sector targeting students in...
• Has been investing in real estate in Jordan since 1991
• Participated in several workshops specializing in the following areas:
  - Business management
  - Self growth
  - Psychology
  - Natural medicine (or Alternative medicine?)
  - He carries a diploma in “Diagnosis through the Iris of the Eye” from the University of Natural Medicine in California

Figure-3 About the Company Director

I understand his interest in psychology, but natural medicine? And worse yet diagnosis through the Iris of the Eye?! I am speechless. What does this have to do with me buying a house in this project?????

Smart Falafel ???

I spent most of last week in San Jose, California in the heart of Silicon Valley. For those of you who experienced life outside of Jordan, you know we would go great lengths in search of that perfect falafel sandwich. This usually proves to be an elusive exercise because there is often disappointment in the quality of the Falafel offered at the Falafel wannabe outlets. Perhaps enjoying Falafel is more than just consuming food, but rather an experience enhanced by the traditions at its original source.

Having said that, I had to choose from two possible venues for my Falafel quest: House of Falafel or Falafel Drive-in.


I opted for House of Falafel after seeing burgers on the Falafel Drive-in menu. So I made the short drive just before noon and arrived at a modest, but relatively well-appointed dining room. A line of 30 plus customers extended from the order counter all the way to the entrance of the store. It was complete chaos (typical of all Middle Eastern joints I have been to in the U.S.) Arabic pop music was blaring in the background as two young servers were rushing among the sea of people to deliver Falafel and kabob combo plates. Loud exchanges among the 3 young Arab workers (cashier, waiter/busboy combo, and cook) interrupted the continuous buzz of hungry customers and the Arabic music in the background.

I stood in line for more than 20 minutes before being able to place my order and then stand aside since I opted for take-out. Besides the usual chaos (read municipal election in Jordan), I was fascinated by the diversity of the mostly young clientele in this place. Given that this was Silicon Valley after all, it was amazing to see the world represented in the faces, features, colors, and accents of young smart IT workers. They dress from total slobs to total chique yet they all blended in and they all knew their Falafel.

Cashier and cook had a heated exchange that I later discovered was related to one customer’s special request. The customer wanted Kunafeh but the cook said it was too busy for him to prepare. After several exchanges the cashier began informing the customer that it wasn’t possible today. Customer replied that he has been coming for days wanting to buy the Kunafeh. Crisis averted when waiter/busboy combo volunteered to make the Kunafeh. He shouted at the cook to throw some butter in the skillet and he’s make the Kunafeh! As much as I was drooling on the prospect of eating Kunafeh, I had to go back to my meeting (sadly)…

Given all the outstanding Falafel Jordan has to offer, I wonder if it could be possible to attract a few bright minds to help create that long awaited revolution to move Jordan into the IT world? Better yet, perhaps Jordan can create a welcoming environment to keep its brilliant young generation at home where they can focus on developing their country rather than migrate to Western countries in search of that elusive Falafel look-alike?