The German government swapped €35 million of Jordan’s outstanding debt for the construction and modernization of infrastructure for schools in the Kingdom.
A debt-swap is an alternative form of aid by industrial countries to indebted developing nations. It is the cancellation of external debt in exchange for the debtor country's pledge to repay with local currency or another asset for an agreed investment. Jordan's outstanding debt to Germany stood at 298 million Jordanian dinars ($420 million) last year.
This debt swap, administered by the German Development Bank (KFW), is the second with a creditor country this month for Jordan, bringing the Kingdom’s external debt from 74 percent of gross domestic product (GDP) at JD 5 billion to 68 percent of GDP, reported Jordan Times.
Jordan and Germany have signed seven debt swap agreements since 1995 at a total value of over €148.6 million at a 50 percent discount rate. The swaps were utilized to fund water and social development projects. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
