AMMAN —
According to data from the
Central Bank of Jordan, Jordan’s external grants
decreased by JD128.3 million, or 18 percent, in the first 11 months of 2021, to
reach JD583.9 million.
اضافة اعلان
“External grants were originally intended to
assist the state in reaching the stage of sufficiency and avoiding the need for
grants in the future, but in light of the non-existent political reform, it
does not look like it could help Jordan avoid grants and foreign aid,” economic
expert Mohammad Al-Basheer told
Jordan News.
Officials should use these grants to help the
economy grow and solve the country’s structural problems, he said, adding that
the larger issue is that the industrial, agricultural, and tourism sectors
account for a small portion of
GDP. More than 70 percent of GDP is accounted
for by banks and other service professions.
According to Basheer, other countries’ success
could be often attributed to the industrial and agricultural sectors, which
account for at least 60 percent of their GDPs. The reason is that these
industries create jobs, which helps close the trade deficit and boost exports,
and that is what Jordan needs,” he said.
Economist
Wajdi Makhamreh told
Jordan News
that “Jordan cannot dispense of external grants in the near future”, adding
that the general budget is heavily reliant on it.
Grants were much larger a few years ago, when
a Gulf grant totaled more than $4 billion in one year, said Makhamreh, adding
that the government’s mistake is to continue to rely on donations, and fail to
use them correctly.
“These grants were frequently used to pay a
budget deficit or establish projects that added little value to the
Jordanian economy,” he said, stressing that the decrease in grants will have a
significant impact on Jordan, “primarily because the government would have to
rely on other sources of funding, such as loans. As a result, the debt will
grow, or the government may raise taxes on citizens”.
While the government is increasingly reliant
on domestic revenues, foreign aid will continue to be required, said Makhamreh
who stressed that grants should be used to “establish worthwhile projects that
directly reduce unemployment rates and thus reduce indebtedness, bridge the
budget deficit, and support exports as the best solution to this economic
deficit”.
Minister of Planning and International Cooperation Nasser
Al-Shraideh was quoted by Al-Ghad News as saying that Jordan received JD712
million in external grants in 2020. In 2021, Jordan received $2.5 billion in
grants and external aid, including $1.2 billion in grants and $1.3 billion in
soft loans.
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