Jordan seeks US$1 bil World Bank loan to cut debt burden

A market trade at a local fruit and vegetable market in Amman, Jordan. (Bloomberg pic)

AMMAN: Jordan is talking to the World Bank about a US$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%, he said.

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

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

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 the area has fueled an annual 13.6% 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.