Why Entrepreneurship? Why not Microfinance?

I do not claim being an economy expert, but, I think I understand the basics of such a complex phenomenon, or at least I understand the fact that a free economy is self feeding with some inertia, which means that once it starts falling down it will fall to its death unless some, usually deliberate, interventions are made.

Forecasts for Jordan economy, shortly after gaining its independence and joining the UN, were gloomy, and the country was expected to crumble down soon due to its “sever lack of resources”. But that was not the case. We found our own resources in the form of Jordanians working in rich oil states nearby, and financial support from other Arab countries, to help the Arab state with the longest borderlines with Israel in its military conflict.

In the 80’s the economy in Jordan was doing exceptionally well until the end of that decade, when it was discovered that the source of this fantastic performance was not real economic growth, but loans from the World Bank, leading, along with other factors, to the financial crises during the early 90’s.

The point is our economy was always highly dependent on the money that our expats in the Arab gulf sent back to their families, and the large doses of cash injected into the market every while and a then, through loans or foreign support.

But it seems like these are not quit sustainable resources and are hardly controlled by our own policies; The oil rich Arab countries are creating their own qualified workforces, and applying policies geared toward reducing capital migration to other countries, while the world is sinking into the biggest economic depression ever. So the only way out is Entrepreneurship? Or is it?

The term “Entrepreneurship” found its way to the Elite strata in Jordan as a byproduct of the sudden wide scale exposure to the Western culture, facilitated by the advent of the internet and exported books at the beginning of this decade. It stayed inert for sometime, and later was solely confined to the activities of “DART” club in PSUT.

Recently, it was brought under light after the beginning of the contemporary harsh economy period in Jordan. It has been hailed as the only way out, by its proponents. Hype is to be expected, no doubt, but not to such extreme degrees, for Entrepreneurship is the story of the 10000 who drown, for every one who crosses the river and see the sun on the other side.

The economy of a country can never depend on such a type of gambling, but lets assume for the sake of the argument that it can. Entrepreneurship is the commercial exploitation of niches that technology opens for us, and technology does not come by chance you know, it builds on R&D, which in turn builds on the proper infrastructure with Universities at the core.

Speaking the language of numbers, we, as a country and not Jordanian scientists in USA and Europe, publish only 2400 papers per year, with very little technological significance, and our R&D expenditures are among the lowest in the world (UK's R&D expenditure per capita is roughly 40 times ours).We can expand the analysis to include the dynamic attributes of technology, which given the level of our experience as a nation in technology production, will not be in our favor.

Put in another way, this whole “Entrepreneurship is the holy grail of the Jordanian economy” is rhetoric in nature, and builds on naïve assumptions. How much does Entrepreneurship, not innovation, contribute to the economic growth, or income per capita, whichever is greater, in the country it contributes the most? Fractions?

So what about micro financing? A small company can be registered for as much as 1 JD now. This can be a good starting point. And while its contributions to economy's growth are of marginal proportions as well, it still grants some income distribution within the society, which is something that had been neglected for quit sometime, and with the rapid economy growth in the last decade, the inequality in Jordan had been aggravated like never before.

Very few civil organizations are working toward empowering the underprivileged in the society, and may be even less are seeking empowerment on an economic level. The whole concentration is on empowering the already empowered, while leaving people in rural areas, or to be more accurate who are not Western Ammanis, languishing in tribalism and the likes.

I would really like to thank anyone who is promoting Entrepreneurship, for they love Jordan by actions and not songs, but they should also be more realistic about their pursuit, and adjust the resources they are expending on it, appropriately. While I really wish that we get to see more and more initiatives like “Zikra initiative“, for such initiatives works toward narrowing the chasm between the rich and the poor; which should be assigned a much higher priority, if you ask me.

[Conflict of interest: I had my own adventures before in entrepreneurship, which ended before getting on the boat, so my objectivity is not granted here]