Coping mechanisms: World Bank mulls financial support to Jordan despite not being low-income economy

Published April 29th, 2015 - 06:30 GMT

The World Bank Group (WBG) is considering new financing tools to help Jordan cope with financial burdens caused by the influx of hundreds of thousands of Syrian refugees, a WBG official told The Jordan Times Monday. 

Ahmed Attiga, regional manager and head of mission at the World Bank’s International Finance Cooperation (IFC) to Jordan and Iraq, explained that in addition to low-interest loans, the new tools may include grants and direct financial assistance in an attempt to reduce financial pressure on the Kingdom. 

The IFC is the investment arm of the World Bank. 

Attiga said that the government has requested WBG to offer more flexibility in the financial assistance provided to the Kingdom due to the Syrian crisis.

“In cooperation with the international community and due to the current refugee crisis that affected Jordan, we are considering financing tools to Jordan either through grants or direct assistance,” Attiga said on sidelines of a training course organised by WBG and Jordan Media Institute.

Since the start of the Syrian crisis in 2011, Jordan has hosted over 1.4 million Syrians with more than 600,000 of them registered as refugees. The estimated cost of the Syrian crisis on Jordan is expected to reach $2.9 billion in 2015.

According to official figures, Jordan’s absolute poverty has reached 14.4 per cent in the refugee-impacted governorates of Mafraq and Irbid.

Trade losses also mounted due to instability in the northern neighbour country and prompted Jordan to close its northern border. 

As Jordan is classified a middle-upper income country, the Kingdom is not eligible for grants or debt swap or rescheduling, according to Mohammad Abu Hammour, former minister of finance.

Each year on July 1 the World Bank revises its classification of the world’s economies based on estimates of gross national income per capita for the previous year, according to the World Bank website.

The Kingdom was classified in this position in 2011. Previously, it had been classified as a lower-middle income country.

Only countries that are classified as low-income countries are entitled to receive grants and direct assistance.

However, Abu Hammour explained that Jordan is receiving grants for political reasons and not for economic reasons, and now the country receives assistance to deal with the impact of the Syrian crisis.

Still, there are countries like the US that always support Jordan regardless of the political situation, according to the former minister.


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