Gulf Countries Throw Jordan A $2.5bn Lifeline Amid Unrest

15 Jun 2018 Issue: 61 / 24 By: Waylon Fairbanks

Jordan’s monarchy finds itself torn between implementing tough economic reforms and subsidizing a declining standard of living. GCC assistance will be welcomed in Amman, but it hardly addresses the crux of the problem.

Saudi Arabia, Kuwait and the UAE pledged $2.5bn worth of aid over five years to Jordan this week during a summit in Mecca. The move comes in response to nationwide demonstrations in recent weeks that placed heavy pressure on Jordanian officials—initially triggered by unpopular IMF-backed income tax reform (MEES, 8 June). Protests led to Prime Minister Hani al-Mulki’s resignation. His successor Omar Razzaz nixed the tax plan only a day after being appointed.

The Saudi-facilitated assistance package makes big promises: a deposit in the Central Bank of Jordan; budget support for five years; project financing for development; and cover for World Bank guarantees for Jordan. No details were announced regarding the allocation of these funds, nor the amount each country pledged. Not to be outdone, GCC black sheep Qatar offered investments worth $500mn days later on 14 June. (CONTINUED - 1026 WORDS)