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Fakhoury calls for ‘new mechanisms’ to enhance aid to Jordan, reduce interest rates

By JT - Apr 25,2018 - Last updated at Apr 25,2018

Planning and International Cooperation Minister Imad Fakhoury concludes participation in the Spring meetings of the World Bank Group and the International Monetary Fund, held in Washington between April 16 and 22 (Photo: Planning and International Cooperation Ministry)

AMMAN — Planning and International Cooperation Minister Imad Fakhoury called for finding new mechanisms to increase financing to Jordan with less interests and longer grace periods, a statement from the Planning Ministry has said.

During his participation in the spring meetings of the World Bank (WB) and the International Monetary Fund  held in Washington between April 16 and 22, Fakhoury urged the WB to assist Jordan receive concessional financing guaranteed by the donor countries with increased worth that exceeds $1 billion annually.

Fakhoury, who is also a WB governor, held several meetings with the bank’s administration and a number of senior officials during his participation in the event, and took part as a keynote speaker in three panel discussions, in addition to joining the meeting of the WB’s development committee.

He also held several bilateral meetings with representatives of the leading donor countries in preparation for the 2nd Brussels Conference.

He met with President of the World Bank Group Jim Yong Kim, Chief Executive Officer Of WB Kristalina Georgieva, the Vice President of the WB for the Middle East and North Africa (MENA) Hafez Ghanem, and Vice President and Chief Risk Officer for the World Bank Group Lakshmi Shyam-Sunder.

During the meeting, Fakhoury discussed with the officials means to find various mechanisms to increase financing Jordan, according to the statement.

For their part, the WB’s officials stressed the bank’s commitment to covering the Kingdom’s financial needs in light of the circumstances it is passing through due to being one of largest refugee-host countries. 

The government is currently working with bank priority programmes and projects, as well as preparing for a soft loan with a long grace period for the general Treasury to bridge the financial gap in accordance with the general budget and the financial reform programme approved by Parliament, the statement noted.

The three panel discussions covered mechanisms of response to the refugee crises, activating the creative markets, and maintaining balance between borrowing and growth, according to the ministry's statement.

Speaking at the panels, the minister shed light on Jordan's "pioneering" approach in dealing with the repercussions of the Syrian refugee crisis through the Jordan Compact and the Jordan Response Plan.

He also stressed the importance of the private sector's role in realising the goals of development and creating jobs in light of the instable status in MENA region.

In regard to borrowing and growth, Fakhoury outlined the best practices of administering the public debt and the role of the international community to support countries that face financial challenges.

He explained that the external shocks and the accumulating burdens of the Syrian crisis, which affected all aspects of life and exceeded the capabilities and resources of the Kingdom, have been risking Jordan's national achievements of development that have been attained over decades.

The WB development committee meeting focused on increasing the bank's capital, the role of sustainable financing in enhancing sustainable development, especially in countries of middle and low income, and creating a general framework for risk management of projects.

On the sidelines of the event, Fakhoury discussed with WB senior officials the preparations for a $500 million soft loan to support the general budget and create jobs, as well as the possibility of a grant through the Concessional Financing Facility to reduce the interest of the loan, according to the statement.

He also discussed work to prepare the “matrix of structural reforms” for the next five years, which focuses on creating job opportunities.

The minister chaired a roundtable meeting with representative of the main donors (the US, the EU, Germany, Japan, France, Canada and the UK), in addition to Sweden, which expressed interest in supporting the method of guaranteeing loans.

Also on the sidelines of the visit, Fakhoury held a series of meetings with a number of senior officials including Michael Kohler, director for the Neighbourhood South at the European Commission's Directorate General for Neighbourhood and Enlargement Negotiations, Minister for Foreign Trade and Development Cooperation of the Netherlands Sigrid Kaag, the UK's Secretary of State for International Development Penny Mordaunt and International Finance Corporation’s  CEO Philippe Le Houérou.

He also met with US senior officials to follow up on the US 2018's assistance to the Kingdom.

Pointing out the FY 2018 Omnibus of US Government Funding Bill’s recent endorsement, Fakhoury said that the FY2018 military and economic appropriations for Jordan amounted to $1.525 billion, $1.08 billion of which entail economic assistance, $745.1 million for budget support and $425 million as military assistance.

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