IMF welcomes new gov’t, Gulf aid package

AMMAN — The International Monetary Fund (IMF) has said it was looking forward to continue discussions with the new government to proceed over the fund’s second review of the country's economic correction programme.

"We look forward to continuing our discussions with the new government with a view to presenting the second review of Jordan’s economic reform programme to our Executive Board as soon as possible," the IMF said in a statement on its website this week.

In 2016, Jordan and the IMF signed a three-year extended arrangement under the Extended Fund Facility for Jordan for an amount of about $723 million to support the country’s economic and financial reform programme.

Under the deal, the government and the IMF agreed on six conditions that aim at reducing public debt to safe levels and at stimulating the economy.

The IMF also welcomed a move by Saudi Arabia, Kuwait and the United Arab Emirates, which last week committed to extending to Jordan $2.5 billion in support for the country’s economy. The Gulf states’ aid package includes a deposit at the Central Bank of Jordan (CBJ), guarantees to be presented to the World Bank in favour of Jordan, budget support for five years and funding of development projects by development funds in the three countries.

“We welcome the news that Saudi Arabia, the UAE, and Kuwait have pledged $2.5 billion in aid to Jordan over the next five years. This is a positive step,” the statement read.

The IMF said it has repeatedly urged the international community and regional donors to shoulder more of the burdens of hosting of over a million Syrian refugees and providing security in the region, all of which have placed “extraordinary strains” on Jordan’s public finances.

“We reiterate our call to the international community to help Jordan with much-needed increased financial support, preferably in the form of grants… We hope this aid package will help Jordan undertake bold reforms to address high unemployment, especially among the youth and women, and to stimulate economic growth while protecting the poor and middle class,” it said.

The IMF remains committed to supporting Jordan and its people, it added.

Economists interviewed recently by The Jordan Times said the Gulf states’ aid, although deemed “below expectations by some” would help ease pressures on the Kingdom, boost foreign currency reserves, reduce Jordan’s cost of borrowing in case of bond issuance, while development projects would help create jobs and drive economic growth.

However, they stressed that the country needs to go ahead with necessary reforms to realise self-reliance.