Jordan receives financial aid package from Gulf allies

Saudi Arabia, the United Arab Emirates and Kuwait provide Jordan with $1 billion in financial aid to help ease economic crisis.

Ben Ariel ,

Flag of Jordan
Flag of Jordan

Jordan on Thursday received over $1 billion in financial aid from three key Gulf backers as part of a broader package to help ease an economic crisis, a government source said, according to an AFP report.

Saudi Arabia, the United Arab Emirates and Kuwait in June offered a $2.5-billion lifeline to Amman after a wave of protests which resulted in King Abdullah II replacing Prime Minister Hani Mulki.

Finance ministers from the three countries officially signed off on the June commitments at a meeting in Amman on Thursday, state news agency Petra reported.

"Saudi Arabia and the United Arab Emirates have both deposited $333.3 million with the central bank, while Kuwait has transferred $500 million," the Jordanian government source said.

Cash-strapped Jordan, a close US ally that relies heavily on donors, has struggled to curb its debt since securing a $723-million loan from the International Monetary Fund in 2016.

Austerity measures tied to the IMF loan saw prices of basic necessities rise across the kingdom -- culminating in angry demonstrations over tax proposals which ultimately ended with the Prime Minister’s resignation.

King Abdullah II then appointed Omar al-Razzaz as Prime Minister, who in turn withdrew the controversial income tax bill.

In response to the unrest in June, the trio of Gulf states stepped in to help out Amman with a plan including deposits with the central bank and five years of budget support.

Riyadh and Abu Dhabi have pledged $250 million each for the Jordanian budget, while Kuwait has pledged $500 million in credit from early 2019 to finance projects, the government source said.

Petra reported that the UAE will also provide guarantees worth $200 million for the World Bank.