Jordan seeks easy loans from World Bank as rules changed

AMMAN — Jordan is currently negotiating with the World Bank over a $500 million loan for the year 2016 under new and easier terms Jordan has not been entitled to due to its ranking as an upper-middle-income country.

Minister of Planning and International Cooperation Imad Fakhoury said such concessional loans are usually given with an interest rate of less than 3 per cent, and “we are negotiating with the World Bank to obtain these loans at 1 per cent interest and a longer grace period”.

Jordan secured the waiver during a refugee donor meeting in London on February 4, where officials negotiated for easy lending and grants to shift international response to the Syrian refugee crisis from an emergency and relief mode to a sustainable development mode. The aim is to have Syrian refugees integrated in the local labour market under certain conditions. 

At a press conference following a meeting with executive directors from the World Bank Group in the Kingdom, Fakhoury described the visit as “historic” as it would help “realign their support with the priorities and needs of Jordan to look at the new ways on how to provide more, additional concessional refinancing in spite of Jordan being an upper-middle income country”.

He added that London Conference held was a point that was “transformative, basically stating that Jordan should get more concessional refinancing, in spite of its rating”.

The delegation, which represents 46 per cent of the voting power in the group, was in Jordan as part of a regional tour that also includes Lebanon, to witness first-hand the scale and acuteness of the refugee crisis in these countries, and to explore with stakeholders the needs and priorities of the refugees as well as the hosting communities.

The board represents over 62 countries and close to 46 per cent of the voting power of the World Bank, said Fakhoury, adding that they have spent the past two days looking very closely and in the field on what the regional situation has been and to what extent it is “negatively impacting government services and host communities”.

At a practical level, he said, this comes as a follow-up of the London Conference, as part of the Jordan Compact to provide more assistance to Jordan on the grant side and regarding its needs for the concessional refinancing.

He added that Jordan would be working closely with the World Bank on the technical assistance side to programme and manage the implementation of the Jordan Compact, the document issued at the conference stating the commitments of the international community, international financial institutions and the multilateral development banks to assisting the Kingdom.

“So overall, we are going to have a much deeper relationship with the World Bank in the years to come to assist Jordan economically, because this is where the World Bank intervenes,” the minister stressed.

Meanwhile, Frank Heemskerk, an executive director representing several European countries at the World Bank Group, said the group would support Jordan in these difficult conditions.

 “Jordan now is facing difficult economic times, but it has shown political stability… efficient government,” Heemskerk said at the press conference.

“We stand ready to support Jordan in addressing these challenges, to focus on efficient and effective public services,” the official said.