Jordan’s economic crisis threatens political stability

Protesters gather in front of parliament in Amman on February 1 with a sign that reads 'Don't raise prices' [Muhammad Hamed/Reuters]
Protesters gather in front of parliament in Amman on February 1 with a sign that reads ‘Don’t raise prices’ [Muhammad Hamed/Reuters]

Angry at the decision to increase food prices last month, restive Jordanians are demanding the government’s resignation and the dissolution of parliament.

Last month, the government implemented a tax rise of between 50-100 percent on key food staples such as bread, in order to decrease its $700m budget deficit.

Jordan’s debt has now reached $40bn and its debt-to-gross-domestic-product ratio has reached a record 95 percent, up from 71 percent in 2011.

The economic crunch that squeezes the country will be particularly acute this year, after Jordan’s Gulf Cooperation Council (GCC) allies – Saudi Arabia, UAE, and Kuwait – did not renew a five-year financial assistance programme with Amman worth $3.6bn that ended in 2017.

The United States is now the only donor that has committed itself to support Jordan. On Wednesday, US Secretary of State Rex Tillerson signed a five-year $6.375bn ($1.275bn a year) aid deal with Foreign Minister Ayman al-Safadi

This surpassed the previous agreement of about $1bn a year, signed with the previous US administration, by about 27 percent, and increased in length from three years to five.

A US State Department statement said $750m was earmarked annually for economic support funds and $350m for the military. It was unclear what the remaining $175m would be used for.

“As part of this bilateral understanding, Jordan has committed to prioritise economic and security sector reforms that aim to support Jordanian self-reliance,” it said.

During a joint press conference in Amman, Tillerson said the increase would support Jordan’s security roles in fighting terrorism and the conflict in Syria.

However, even with the increased flow of US aid that has funded budgets and projects since the 1950s, it remains to be seen if Jordan’s economy will stabilise, according to analysts.

Hussam Abdallat, a political activist and former government official, told Al Jazeera the American assistance won’t benefit ordinary Jordanians.

“American aid to Jordan is useless to the average Jordanian; most of it goes to support the Jordanian military – which serves American interests, not Jordan’s – and the rest goes back to the US through US companies working in Jordan,” Abdallat said.


4 replies

  1. US so-called ‘international aid’ is in fact aid to the US industry, first of all the US arms industry. Also in other chapters the cash usually goes to US companies and therefore the dollar nicely stays back home. The US military aid is for the recipient to do what the Americans tell them to do. Without ‘orders’ from the USA they would not need all that equipment anyway. – And by the way: The US military is famous for wasting money. I have seen miles and miles of discarded equipment at the US Baghdad airport military base, just rotting away. ‘Let’s buy new ones’ is good for the military contractors and suppliers.

  2. Rafiq— do not blame USA, blame the extremist wahhabi clerics who teach the wrong Islam, The true Islam teach Muslim become a rich.

    • I am just putting the ‘news’ in the correct perspective. As the author says, this so-called ‘aid’ is for the benefit of the Americans not the Jordanians. Nothing wrong with that, just put it straight and do not pretend to be ‘oh so kind’. Military aid? where do the dollars go? They stay right ‘back home’. And in addition the ‘foreign military’ has to do ‘what they are told’, because the weapons come ‘from there’. Can you not see that picture?

      • Ohh I see that , but all conditions under a agreement of both parties right —win and win solution—take and give— there is no free lunch—. Who is smarter? he will get more benefits— the weaker is always lose in any compitation— be smart— no one can fool you. As God say innHis book.

        Do not blame America, blame Extremist Cleric who mislead people even thier leaders


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