Gulf bail out for Jordan

    Saudi Arabia, Kuwait and the United Arab Emirates have agreed to provide an economic aid package worth $2.5 billion for Jordan, which is facing an economic crisis following anti-austerity protests.

    The package, announced at a summit of the four nations in the holy city of Makkah, will include a deposit in the Jordanian central bank, World Bank guarantees, budgetary support over five years and financing for development projects, said a summit communique carried by the Saudi Press Agency.

    The summit, called by Saudi King Salman, was attended by Jordan’s King Abdullah II (right), along with UAE’s Prime Minister Sheikh Mohammed bin Rashid Al-Maktoum and Kuwaiti Emir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah.

    King Salman called the meeting to garner support for ally Jordan, which had been rocked by mass protests against price rises and a proposed tax hike in recent days.

    The statement noted that funding for Jordan’s economic crisis comes from contributory funds for development projects in the Kingdom.

    Following the meeting, King Abdullah II offered his gratitude to King Salman, Kuwait and the UAE for their support. Jordan is struggling to curb its debt after securing a $723 million loan from the International Monetary Fund (IMF) in 2016.

    Austerity measures tied to the loan have seen prices of basic necessities rise across the Kingdom of Jordan — culminating in a week of angry protests over tax proposals that forced prime minister Hani Mulki to resign.

    Jordan has become home to many thousands of the region’s displaced, putting an enormous strain on all its resources

    The authorities on 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.

    Jordan blames its economic woes on instability rocking the region and the burden of hosting hundreds of thousands of refugees from war-torn Syria, complaining it has not received enough international support. The World Bank says Jordan has “weak growth prospects” this year, while 18.5 percent of the working age population is unemployed.

    Saudi Arabia and the United States are two of the major donors providing vital economic assistance to Jordan.

    With acknowledgements to news agencies, including SPA, AFP and Reuters. This edited article first appeared in Arab News

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