Three Gulf states offer $3b in aid to crisis-hit Jordan

June 12, 2018

 


Austerity measures tied to an International Monetary Fund loan have seen prices of basic necessities rise across Jordan, leading to angry protests in cities including Amman (above) over tax proposals that forced prime minister Hani Mulki to resign last week. PHOTO: BLOOMBERG

 

RIYADH – Saudi Arabia, the United Arab Emirates and Kuwait yesterday offered US$2.5 billion (S$3.3 billion) in aid for Jordan to ease its economic crisis following a wave of anti-austerity protests.

Jordan has been rocked in recent days by mass protests against price rises and a proposed tax hike as the government pushes measures to slash the country’s debt, leading to the prime minister’s resignation.

A four-nation summit in the holy city of Mecca, hosted by King Salman of Saudi Arabia, offered Amman a bailout in the form of a deposit in the Jordanian central bank, World Bank guarantees and budgetary support over five years.

“In the light of the close brotherly ties… it was agreed that the three countries would provide an economic aid package to Jordan totaling US$2.5 billion,” the official Saudi Press Agency (SPA) said.

The crucial summit was attended by Jordan’s King Abdullah II, who expressed his gratitude to the three countries, according to SPA.

The announcement came after European Union foreign policy chief Federica Mogherini on Sunday announced €20 million (S$32 million) in aid for Jordan.

Cash-strapped Jordan, a close US ally that relies heavily on donors, is struggling to curb its debt after securing a US$723 million loan from the International Monetary Fund (IMF) in 2016.

Austerity measures tied to the IMF loan have seen prices of basic necessities rise across the kingdom – culminating in a week of protests over tax proposals that led to prime minister Hani Mulki resigning.

The authorities last Thursday announced they were withdrawing the unpopular legislation, but still face a mammoth task to balance popular demands with the need to reduce the public debt burden.

The Gulf aid package appears driven by the desire to avoid a repeat of the 2011 Arab Spring uprisings, which saw pent-up anger spilling onto streets across the Middle East, analysts said.

“The speed and the gravity with which the Gulf states are responding is a very clear testament to their concern and determination to nip this unrest in Jordan in the bud,” said Dr. Lori Boghardt, a fellow at the Washington Institute for Near East Policy.

The World Bank says Jordan has “weak growth prospects” this year, while 18.5 percent of the working age population is unemployed.

– AGENCE FRANCE-PRESSE

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