At one end of Rainbow Street, in the heart of Amman’s cafe-filled historic district, sits Think Arabia, one of the hundreds of tech start-ups that have sprung from the Jordanian desert.
Web designers, animators and cartoonists are toiling away on this July day amid multicolored beanbags. Were it not for dozens of Apple Macintosh screens atop desks, the warehouselike space might be mistaken for a student common room.
Before there was an Arab Spring, there was a quiet revolution of sorts brewing in Jordan. The country experienced a tech boom that gained speed as young Arabs toppled regimes from Egypt to Tunisia and millions were driven online for the first time. Jordan now hosts about three-quarters of all Arabic content on the Internet, according to the Geneva-based International Telecommunication Union.
Can it last? Doubts grew in September when the Jordanian parliament passed a law curtailing freedom of expression on the Internet and giving the government broad powers to block Web sites.
“The law is so vague you could drive a truck through it,” says Abdelmajeed Shamlawi, chief executive of the Information and Communications Technology Association of Jordan.
The law, passed days after demonstrators took to the streets in Amman to protest an anti-Islam video that originated in the United States and was broadcast online, was deplored by groups such as Human Rights Watch as an instance of state censorship.
On a scale of 1 (most free) to 7 (least free), Jordan scores 5.5, or “not free,” according to the Freedom in the World 2011 report published by Washington-based Freedom House.
Still, even with large Palestinian and Iraqi communities inside its borders, and flanked by a deepening civil war in Syria, Jordan remains relatively stable by regional standards.
While online enterprises crop up from Cairo to Qatar, Amman is the closest thing the Middle East has to a Silicon Valley outside Israel. It has been dubbed Silicon Wadi (Arabic for “Valley”).
The capital, as a hub for Web businesses, could benefit from the regional market. Only 29 percent of the Middle East’s population used the Internet last year, according to the ITU. With two-thirds of the population under 30 years old, the region has one of the world’s fastest-growing Internet penetration rates.
In Jordan, entrepreneurs have been thriving. The surge in business activity is luring Jordanian expatriates back to the fold; there’s even a LinkedIn group called Jordan’s Brain Gain, with 2,700 members.
Israel, home to the largest number of start-up companies per capita in the world, is unrivaled as the region’s information and communications technology powerhouse. Its industry generated $20.5 billion in revenue in 2011, or 12.1 percent of the country’s GDP.
Although comparable businesses in Jordan produced much less revenue in 2010 — $2.2 billion — they represented 14 percent of the country’s GDP, the same share as tourism and the fastest-growing part of the economy.
“We are the ICT leader in the Arab world,” King Abdullah said in an e-mail. “As a small country that accounts for only 2 percent of the region’s population, imagine what it means to us that we produce and manage 75 percent of all Arabic-language Internet content.”
And yet it was the king who endorsed the rules that have alarmed Jordan’s growing community of Internet entrepreneurs.
The law requires any Web site hosted in Jordan whose “activity includes publishing news, investigative reports, articles and comments related to the internal or external affairs of the Kingdom” to be licensed by the government and holds the sites responsible for the accuracy of their content and for user comments.
“It will have a chilling effect,” says Christoph Wilcke, Jordan researcher for Human Rights Watch.
For now, Jordanian entrepreneurs are creating some of the Middle East’s biggest e-commerce platforms, such as Souq.com and MarkaVIP, to feed consumer demand — including demand from wealthy Arab women in countries such as Saudi Arabia and the United Arab Emirates.
“This is the last Internet gold rush to be had,” says Khaldoon Tabaza, the founder of Zad Capital, a venture capital firm, who is building a new holding company, called iMena, for e-commerce start-ups.
Amman is the birthplace of the Arab world’s most successful Internet venture: Maktoob, a portal that in 2000 made it possible to send and receive e-mail in Arabic. In 2009, Maktoob founders Samih Toukan and Hussam Khoury sold the company to Yahoo for $175 million.
The deal was a boon to investors. The private-equity arm of Chase Coleman’s New York-based Tiger Global Management cashed in its more than 40 percent stake. Tiger Global topped Bloomberg Markets’ 2011 ranking of the world’s best-performing large hedge funds.
The result was a “Maktoob effect,” demonstrating that the Internet in the Middle East offers business potential, says Fadi Ghandour, a Jordanian who founded Dubai-based Aramex PJSC, the largest courier company in the region.
“Maktoob has become the rallying call for young entrepreneurs,” Ghandour says.
Ghandour, 53, helped pave the way. He was a founding investor in Maktoob and is a backer of four-year-old Kharabeesh along with a dozen other start-ups. He’s also chairman of Wamda, an Internet platform that tracks entrepreneurship, and has a fund to invest in start-ups.