Jordan and the IMF: A marriage of necessity?
Delegates from the International Monetary Fund (IMF) are currently in Jordan and they are satisfied with the Kingdom’s economic reforms, Prime Minister Abdullah Ensour has said.
“They are comfortable with our national economic programme, and when they issue their report, it will positively reflect on Jordan’s credit ratings,” Ensour said at a late Sunday meeting with Jordan Businessmen Association (JBA) members and President Hamdi Tabbaa.
The IMF executive board has approved a $2.05 billion loan for Jordan under an agreement that will be publicised soon, the IMF and officials have announced.
The premier also noted that his Egyptian counterpart, Hisham Qandil, will be visiting the Kingdom next Thursday to discuss the Egyptian natural gas supply, noting that it has increased over the last two months, after a series of cuts, to 100 million cubic feet (mcf).
Highlighting the Kingdom’s “positive” economic reform programme, he said that more than 90 per cent of those eligible for the government support that replaces fuel subsidies have already received it.
He also said that around 70 per cent of the prices of basic food items are stable, the Jordan News Agency, Petra, reported.
Ensour said $255 million worth of projects have already been agreed upon for 2012 to be funded by the Gulf Cooperation Council (GCC) grant from Saudi Arabia and Kuwait.
During a GCC summit in December 2011, Saudi Arabia, the UAE, Kuwait and Qatar decided to extend $5 billion over a five-year period to support development schemes in Jordan. Each of these four nations will pay $1.25 billion.
Ensour said the total amount expected for 2013 is $1.066 billion, paid by the UAE, Saudi Arabia and Kuwait.
He also said that the total amount currently deposited at the Central Bank of Jordan is $500 million in grants split equally between Kuwait and Saudi Arabia.
In the 2013 budget, the government will cut current expenditures and increase capital spending to around JD1.3 billion, which will reflect positively on growth levels, Ensour said.
He added that the government will continue with its programme to support the Governorates Development Fund, which received JD3.5 million in funds, and will receive around JD12 million before the end of this year.
The premier said that the government incurs around JD1.7 billion in losses due to the National Electric Power Company’s accumulative losses, which have reached $5.5 billion.
Ensour said that the government will submit all these facts to the upcoming parliament, to let lawmakers decide on how to go next.
The remarks came amid reports that the government intends to increase the electricity rates to offset the increasing losses, caused by disruption in Egyptian gas.
He said the daily Egyptian gas supply has increased in the last couple of months to 100mcf, as opposed to 40mcf, noting, however, that the original agreement stated that Jordan should receive 250mcf per day.
The premier said that the government is serious in its search for new energy sources, emphasising that shale oil, in light of the current hike in oil prices, has become a viable option.
Petra quoted an Estonian expert telling Jordanian reporters Monday that Jordan has oil shale reserves ranging between 40-80 billion barrels, which is enough to meet Jordan’s needs for hundreds of years.
Ensour expected production to begin in the year 2016, or a year later at the latest.
JBA members pointed to the need for a comprehensive strategy to deal with all the components of the economy. They highlighted the importance of vocational training and its positive effects on the national economy.