Syria: Key Crossing Open
13 Jul, 2018
Economics & Finance
Gulf Countries Throw Jordan A $2.5bn Lifeline Amid Unrest
15 Jun 2018
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...