Saudi Arabia grants Jordan $787 million to finance development projects

GCC officials meet ahead of the 2011 summit in which GCC nations pledged to grant Jordan $5 billion to spur economic development. [Stringer/AFP]

GCC officials meet ahead of the 2011 summit in which GCC nations pledged to grant Jordan $5 billion to spur economic development. [Stringer/AFP]

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Jordanian economists welcomed Prime Minister Dr. Abdullah Ensour's recent announcement that Saudi Arabia would grant Jordan as much as $787 million to fund development projects.

The prime minister on November 28th said Saudi Arabia already allocated funding for Jordanian projects worth $487 million, adding that he expects the kingdom will grant an additional $300 million in projects by the end of this year.

Within the next few days, Saudi Arabia is slated to deposit $125 million into the projects' fund account, while the rest will be included in the 2013 budget, he said.

The move is in line with the pledge that four Gulf Co-operation Council (GCC) states made in 2011 to grant the Jordanian kingdom $5 billion -- $1.25 billion each over a period of five years--, with the aim of spurring economic development.

Prime Minister Ensour's recent announcement on preparations for the 2013 budget also indicated that the funds would only be used for projects agreed upon within the framework of the GCC pledge.

Economists told Al-Shorfa the Saudi grant would be directed towards funding investment for education, health and infrastructure projects in the kingdom.

"This grant will help overcome financing obstacles plaguing a number of economic projects, given that the economic growth rate in Jordan -- hovering around 3.5% in 2012 -- is approaching the population growth rate," said financial expert Amer al-Muasher, who works at the Association of Certified Capital Market Professionals in Jordan.

As part of the first instalment of Saudi Arabia's portion of the GCC pledge, Jordan and Saudi Arabia signed four funding agreements worth $487 million, he said.

The four agreements include building and equipping government hospitals ($165 million), building and completing a number of schools and kindergartens ($136 million), creating water distribution networks ($132 million) and building roads ($54 million).

Overcoming obstacles

Financial analyst Abdel Moneim al-Zoubi told Al-Shorfa, "The projects' structure indicates they are geared towards development and meeting the needs of key sectors such as education, health, roads and water".

Al-Zoubi said he believes the Saudi grant will help Jordan overcome a number of challenges, adding that aid from other Gulf States can be used towards energy sector projects.

He said he hopes the projects will help create jobs for citizens and reduce unemployment and poverty rates, adding that he hopes the 2013 budget will include on-going projects as well as other development projects.

Meanwhile, economist Ibrahim Khreisat said it is important for Jordan to take advantage of the remainder of Saudi funds to develop alternative energy projects.

"[The government] must strive, through the remaining grants, to focus on renewable energy projects (solar and wind projects) and to finance the construction of natural gas terminals [on the coast] at a cost of $65 million, in addition to funding mass transit projects, such as railways," he said.

Gulf aid should shore up foreign currency reserves at the Central Bank of Jordan and help stabilise the local monetary and financial environment, he added.

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    hassona

    2012-12-5

    But my friend, the writer of the article, with all my great respect to you and the ones with you, even if the Euphrates, Tigris and the Nile turned into dollars and poured on those people or in their buttes, they will never be full. The country will be poorer and you know the rest. Regards!

  • safin

    2012-12-5

    Yes, the agents of America support each other. The reason for this ban is to stop the Jordanian people from starting their spring like the others.