Senior World Bank official praises Jordan's economic strides
A senior World Bank official on Thursday said that Jordan should achieve a good growth rate to help resolve the Kingdom's unemployment and poverty problems.
Inder Sud, World Bank director for the Middle East and North Africa, said that securing the required growth rate can only be attained through private investments, privatization and increasing exports.
“To ensure growth [in Jordan] is a matter of concern for us. We have been concerned about this issue for a couple of years,” Sud said in an interview with the Jordan Times.
He said that Jordan cannot afford not to have a high growth rate because the Kingdom has young population, with a high jobless rate and “there is no way to create more jobs if growth stays at Jordan's 1996-97 levels.”
“Growth needs strong fundamentals. It needs private investment, not a one time push, but a continuous one,” the World Bank official said.
Sud said that Jordanian officials have informed him that they will release the growth numbers for the first half of the current year, “which shows that the growth rate is in the range of 4 per cent.”
“What Jordan has done in terms of laying the fundamentals for economic growth is very important,” he said
“Jordan has a very stable macroeconomic environment, low inflation, a stable currency and a high level of foreign reserves. Reserves for almost 9 months of imports. This is very good and the outcome of the restructuring program Jordan has launched,” he said.
“What His Majesty King Abdullah is trying to give to the economy, attracting private investment, is very appropriate. This is very supportive to the idea of trying to boost investments and exports,” he said.
Sud said that opening the mining sector to private investment is among the steps that could boost the Jordanian economy.
“In that spirit, the production side of the economy should be in private sector hands.... The worldwide trend in the mining sector is that it is something which is handled by the private sector and I do not find any reason why Jordan cannot or should not do the same,” he said.
In regards to the three-year Country Assistance Strategy (CAS), which Jordan and the World Bank agreed to launch last year, Sud indicated that the two sides are “happy” of what has been achieved in this project.
The CAS focuses on supporting current economic reforms and private investments, privatization, water, energy and social projects.
Sud said that the WB's role in this project focuses on two areas, extending financial and technical support.
“As long as Jordan continues to need help from us, we are very willing to support Jordan financially,” Sud said.
“We think that Jordanian economic management has been excellent and this gives us the reason to support
Jordanian plans for restructuring and economic reform,” he added.
He indicated that the WB has agreed to give Jordan up to $150 million per year for the next three years.
“This is a high level of lending to a country like Jordan.” Sud said.
“But we have agreed to such a step because Jordan needs financial support and its economic management justifies us going to that level of support,” he added.
Sud indicated that the World Bank is encouraging other parties, especially the EU, US and Japan to co-finance different projects in the Kingdom.
Sud urged the government to “tighten” public expenditure.
“You cannot afford to become relaxed on the expenditure side,” he said.
“Every expenditure needs to be scrutinized and carefully managed whether it is defense or for social service purposes,” he said.
“Expenditure should be controlled wisely no matter what purpose it is for,” he said.
The World Bank official said that Jordan has succeeded in reducing foreign debt “for the first time in many years. This is a very good sign and very good news,” he said.
“Yet, the debt should come down. You have to be prudent in borrowing and extremely careful in spending the money.” — ( Jordan Times )
By Tareq Ayyoub
© 2000 Mena Report (www.menareport.com)