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Sun 7 Apr 2019 04:20 PM

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Jordan seeks $1bn World Bank loan to cut debt burden

Jordan, whose public debt of $39.9bn nearly equals economic output, has been hurt by the rise in global commodity prices

Jordan seeks $1bn World Bank loan to cut debt burden
The US last year committed to give Jordan more than $6 billion in aid over the next five years, up from $1 billion annually, while Saudi Arabia and two allied Gulf nations pledged an assistance package after a proposed income tax increase sparked massive protests.

Jordan is talking to the World Bank about a $1 billion soft loan as it seeks to cut the cost of its debt repayments and revive an economy strained by more than a million Syrian refugees.

The government’s “moving on several fronts to reduce the high debt burden by considering concessional loans and focusing on triggering economic growth,” Prime Minister Omar Razzaz said at a World Economic Forum meeting on Jordan’s Dead Sea shores. It’s seeking a 30-year facility with the World Bank and an interest rate of 4 percent, he said.

Jordan, whose public debt of 28.3 billion dinars ($39.9 billion) nearly equals economic output, has been hurt by the rise in global commodity prices.

The US last year committed to give Jordan more than $6 billion in aid over the next five years, up from $1 billion annually, while Saudi Arabia and two allied Gulf nations pledged an assistance package after a proposed income tax increase sparked massive protests.

Regional wars took a toll on the economy, with unemployment at a two-decade high stirring discontent.

The recent reopening of Jordan’s border with Iraq after Islamic State militants were pushed from area has fuelled an annual 13.6 percent in increase in Jordanian exports in the first quarter of this year.

“We are working on driving economic growth, increasing exports,” said Razzaz. The two countries also plan to connect their electric grids and build an industrial zone near the border, he said.

Jordan will also start receiving oil from Iraq by tanker “very soon,” according to the premier, under a February deal for 10,000 barrels of crude per day. He said that a planned oil pipeline from Basra in Iraq to Jordan’s Aqaba would “see the light” in three years, without elaborating.