VZCZCXRO0962
RR RUEHDE
DE RUEHAM #2306/01 2881409
ZNY CCCCC ZZH
R 151409Z OCT 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 6146
INFO RUEHAD/AMEMBASSY ABU DHABI 1348
RUEHGB/AMEMBASSY BAGHDAD 6304
RUEHLB/AMEMBASSY BEIRUT 3112
RUEHEG/AMEMBASSY CAIRO 4163
RUEHDM/AMEMBASSY DAMASCUS 4261
RUEHRH/AMEMBASSY RIYADH 2221
RUEHTV/AMEMBASSY TEL AVIV 1903
RUEHDE/AMCONSUL DUBAI 0497
RUEHJI/AMCONSUL JEDDAH 0917
RUEHJM/AMCONSUL JERUSALEM 5678
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 AMMAN 002306 
 
SIPDIS 
 
STATE FOR NEA/ELA, EEB/CIP 
 
E.O. 12958: DECL: 10/15/2019 
TAGS: ECON EINT TINT PGOV JO
SUBJECT: JORDAN'S INFORMATION TECHNOLOGY SECTOR HOPES TO BE 
"THE INDIA OF THE MIDDLE EAST" 
 
Classified By: DCM Lawrence C. Mandel for reasons 1.4 (b) and (d) 
 
¶1. (C) Summary: Yahoo's recent acquisition of the Jordanian 
internet portal company Maktoob has focused media and 
government attention on the technology sector and generated 
considerable excitement about Jordan's future as a regional 
IT hub.  Recent meetings with industry and government 
officials confirm that Jordanians in both the public and 
private sectors are committed to expanding Jordan's IT 
infrastructure and are taking significant steps to expand 
internet access and computer usage.  However, GOJ and 
industry contacts privately express doubts that Jordan can 
ever rival Dubai as the technology hub of the region.  While 
Jordanian entrepreneurs have good ideas about how Jordan can 
become a technology leader and a cradle of innovation, GOJ 
officials envision Jordan's role as the "India of the Middle 
East," with Jordan providing technical support, customer 
service and back-end software development instead of 
front-line innovation, marketing or development.  End 
Summary. 
 
Public Optimism, Private Doubts 
------------------------------- 
 
¶2. (U) On August 25, Yahoo announced the acquisition of 
Maktoob, an Arabic-language internet portal and content 
company with over 16 million users, for around $85 million 
U.S.  This acquisition is the largest by an American company 
in the Jordanian technology sector and raised hopes of 
increased investment and attention from other U.S. companies. 
 The acquisition generated considerable local excitement, 
including front page coverage in major newspapers and a 
personal meeting for the two founders with King Abdullah who 
presented them with the Al Hussein Medal for  Distinguished 
Performance.  Soon after the Maktoob/Yahoo deal was 
announced, The American Chamber of Commerce in Jordan 
introduced Google as its newest member and corporate sponsor, 
further increasing speculation that Jordan could become a 
regional hub for technology companies interested in expanding 
in the Arabic-speaking world. 
 
¶3. (C) In the midst of these promising developments, some GOJ 
and private sector contacts expressed doubts about Jordan's 
future as an IT hub.  In a September 14 meeting, Samih 
Toukan, the CEO and a founder of Maktoob, told EconOffs that 
Jordan's advantages in the technology sector are comparative 
but not absolute.  For example, while labor in Jordan is 
cheaper than in Dubai, and higher education is better than in 
Egypt, there are still more qualified engineers and software 
developers in Egypt and the quality and variety of labor is 
better in Dubai because of Jordan's relatively small domestic 
population with limited numbers of third-country technology 
experts.  Toukan also asserted that Jordan's claims of having 
a bilingual work-force are exaggerated.  He said that Maktoob 
finds that very few graduates of Jordanian  Universities are 
fluent enough in English to function at a business level, and 
noted that Maktoob has spent  considerable resources 
providing English training to its employees.  He also noted 
that any company based in Jordan must act regionally since 
Jordan's domestic market is too small to support a robust IT 
industry on its own. 
 
¶4. (C) Toukan had several suggestions for improving the 
landscape for IT innovation in Jordan.  Toukan told EconOffs 
that he encouraged King Abdullah to set up tax-free zones 
similar to Dubai's Internet City, and to help establish and 
subsidize a venture capital industry to encourage 
entrepreneurship  Toukan said one of the biggest obstacles to 
entrepreneurship in Jordan is the lack of financing available 
for startups, especially in the technology sector.  He also 
suggested that the government relax rules that make it 
difficult to import highly-skilled foreign labor, 
particularly IT managers, who would help the IT sector in 
Jordan become a leader in the region. 
 
King Promotes IT Sector 
----------------------- 
 
¶5. (C) On October 5, King Abdullah convened IT sector leaders 
 
AMMAN 00002306  002 OF 003 
 
 
in Jordan and emphasized the role of the IT industry in 
boosting the national economy.  At the meeting, the King 
outlined an IT strategy that reflects some of Toukan,s 
suggestions.  The King announced that the GOJ will provide 
administrative and financial assistance to IT startups and 
will work with universities and the public and private 
sectors to further develop IT-related industries in Jordan. 
The King did not offer details about how the plan will be 
implemented or paid for, but called for a panel of IT experts 
to present a detailed action plan to him by the end of the 
year.  In a meeting two days after the King's announcement, 
leaders of the Information Technology Association of Jordan 
(Intaj) privately expressed to EconOffs skepticism of the 
King's plans, saying that limited funding and the limited 
influence of the Ministry of Information and Communication 
Technology (MOICT) on the sector make it unlikely that the 
announced plan will move the sector forward. 
 
Ambitious Plans to Connect Rural Areas 
-------------------------------------- 
 
¶6. (C) The GOJ is taking steps to improve Jordan's IT 
infrastructure.  The Minister of Information and 
Communications Technology described to EconOff an ongoing 
effort to increase internet penetration in Jordan from the 
current level of 29% to 50% by 2011.  Internet penetration 
has been on the rise (and was 11% in 2007).  The most 
significant action on this front involves a cooperative 
effort between the Royal Jordanian Air Force, the Public 
Security Directorate (the national police), and the MOICT to 
run fiber optic cables to elementary schools in remote parts 
of Jordan, connecting under-served communities outside of the 
big cities of Amman, Irbid and Zarqa.  The Minister explained 
that the government is running eight tubes of fiber-optic 
cable lines to under-served rural areas to provide sufficient 
capacity to give entire villages access to high-speed 
internet services.  The last mile of connectivity will be 
provided by private companies, including Orange and Wi-tribe, 
which already offer internet service in urban areas. 
 
¶7. (C) To improve "last mile connectivity" and provide 
internet access to rural areas where wired connectivity might 
not be possible, the Telecommunications Regulatory Commission 
(TRC) has approved wireless internet service for much of the 
country, eliminating the need to run wire to every house. 
MOICT officials have also discussed utilizing cloud 
technology (software shared by a group of users via the 
internet) to provide easy and cost-efficient computing to 
underserved parts of the country.  Nidal Quanadilo, Director 
of ICT Investment and Promotion at MOICT, told EconOff that 
the GOJ is pursuing a partnership with Microsoft to set up 
cloud computing systems in small towns and to provide 
residents with low-cost desktop units they could use to 
access the internet and e-mail.  Quanadilo asserted that 
Microsoft is excited about using this project as a prototype 
to test cloud technology in the developing world and says 
that Microsoft executives are coming to Jordan in November to 
meet with King Abdullah about this and other technology 
projects in the country and region. 
 
Goals for Regional IT Role 
-------------------------- 
 
¶8. (C) Despite these ambitious goals, Quanadilo told EconOff 
that Jordan has no ambitions to be the "new Dubai" (the major 
IT hub in the region).  He explained that he envisions 
Jordan's role as the "India of the Arabic-speaking world," 
providing customer service support and back-end software 
development to companies based elsewhere.  According to 
Quanadilo, Jordan has several advantages in the call center 
field.  He explained that the Jordanian accent is generally 
preferred by Gulf residents over other regional accents and 
that Jordan's rapidly expanding internet and job skills 
programs, funded in part by USAID projects, are developing a 
generation of tech savvy young workers who  could staff the 
call centers.  Quanadilo also told EconOff that the GOJ is 
planning three tax advantaged technology centers to attract 
call centers and similar businesses.  He drew a direct 
contrast between call centers which he said would employ 
 
AMMAN 00002306  003 OF 003 
 
 
hundreds or even thousands of Jordanians with the textile 
industry in Jordan, which mostly employs foreign workers and 
has not succeeded in offering the massive employment of 
Jordanians. 
 
¶9. (C) Comment:  Though the Yahoo-Maktoob deal generated some 
initial excitement, GOJ interlocutors are privately realistic 
about Jordan's limited potential to be a regional technology 
hub.  GOJ initiatives to expand internet penetration in rural 
areas, increase job training in high-tech skills, and explore 
new technologies like clouds and wireless internet service 
are all promising developments in a country that badly needs 
to create fresh revenue sources and new employment streams 
for Jordan's young, well-educated, and underemployed 
workforce.  There are still significant obstacles to be 
overcome, including implementing and funding the King's IT 
initiatives, but Jordan is taking concrete steps to lay a 
firm foundation for a well-connected future.  End Comment 
 
Visit Amman's Classified Website at: 
http://diplopedia.state.sgov.gov/index.php?ti tle=EmbassyAmman 
 
Beecroft