Riyadh Meeting to Discuss Jordan's GCC Induction
Foreign ministers of Jordan and the Gulf Cooperation Council (GCC) will meet this month in Riyadh to discuss the mechanisms of Jordan's induction into the council.
Mohammad Abu Hammour, Jordan's minister of finance, said: "The mechanism and methodology are not yet clear and the effective date of Jordan's membership is also not set yet."
It is unclear what impact Jordan's integration into the GCC will have on relations between Amman and Jerusalem as the other members of the council are still technically at war with Israel.
While today GCC members set their own foreign policy, the council has taken steps toward the formation of the unified diplomatic and military confederation which, with Jordan as a member, would share a border with Israel.
But Jordan's motives, while security may be among them, are primarily financial in nature.
Abu Hammour told reporters he expected deficit by the end of the year in Jordan's budget would amount to $1.6 billion (Dh5.87 billion) instead of $1.06 billion due to an additional $650 million expenditure to cover a package of safety measures amid a decline in the Central Bank of Jordan's reserves.
Abu Hammour said the 2011 budget now stood at $8.5 billion, compared with $8 billion in 2010.
Another issue that will aggravate the situation is the drop in remittances by five per cent for the last six months, while the FDI dropped 30 per cent, as a result of the political instability in the region, said the minister.
"Although these are not satisfactory results, we are upbeat that our economic growth is slated to reach 3.5 per cent. In spite of all these negative indicators for Jordan's economy, the indices are better than those in 2010 due to strict expenditure controls and austerity measures," he said.
Unemployment in Jordan rose to 13.2 per cent in the second quarter, compared to 12.2 per cent during the same period in 2010, said the minister.
A recent study by the Department of Statistics showed that unemployment was high among university degree holders, at 15.3 per cent during the second quarter of 2011.
Among all the governorates, the highest unemployment rate was in the south at 17.6 per cent, while the lowest was in the capital Amman which reached 11.2 per cent, the study showed.
Last January the government announced a package of measures including tax cuts on fuel and foodstuffs, in a bid to offset the burden on the country's poor.
Total revenues are expected to reach $6.5 billion in 2011, while foreign grants are expected to hit $600 million, the minister said.
Jordan's high bill for crude oil imports is the main reason behind its budget deficit, as the kingdom buys more than $2 billion worth of crude and oil products annually. In a bid to lower its budget deficit, Jordan has lifted subsidies on fuel over the past few years.