Khasawneh wants to renegotiate with IMF, discuss new plans

​Despite Modernization Vision, foreign investments are down by 30%, while foreign debt reaches JD39b

Bisher Al-Khasawneh Khasawneh
Prime Minister Bisher Al-Khasawneh. (File photo: Ameer Khalifeh/Jordan News)
AMMAN — The Jordanian government announced, coinciding with the Dead Sea retreat on the occasion of the one-year anniversary of the economic modernization vision, a noticeable increase in the external debt facing the Kingdom. The external debt of the Kingdom has now reached at least JD 39 billion, with an unspecified percentage increase, which means it is close to surpassing the $55 billion mark in the near future if the public debt continues at its current pace.اضافة اعلان

The government did not transparently explain the reasons for the increase in external debt, but experts close to decision-making circles suggest that the plan to reduce external debt and its benefits, as well as self-reliance, collapsed after two years of the COVID-19 pandemic and the global economic challenges that exceeded the capacity and capability of the Jordanian economy, Rai Al-Youm reported.

Failures to draw investments
While the external debt has clearly increased and now exceeds at least $50 billion, the Central Bank recently released data indicating an over 30 percent decrease in foreign investments entering the country for the past year. This is seen as an indication of the failure of the economic modernization vision to attract foreign investments, which aimed to create 100,000 job opportunities for Jordanians over ten years and increase economic growth to predetermined levels through attracting at least $10 billion of investments annually.

This did not materialize in the past year; on the contrary, foreign investments decreased by 30 percent, despite the issuance of the new Investment Environment Law, which the government focused on for several months with the goal of strengthening the legislative framework to attract foreign investments.

Renegotiating with the IMF
A government source suggests that there is an urgent need for slight adjustments to some details and observations on the margins of the agreement or the modernization vision agreed upon during the sixth round of negotiations with the IMF last year. This is made clear with the current deficit in foreign investments as according to the plan.

As these adjustments are considered crucial, Prime Minister Bisher Al-Khasawneh has tasked the financial team, along with the Central Bank governor, to renegotiate with the IMF to reach a new reform program. Reports indicate that these negotiations have already begun.

Despite some optimism about a slight increase in economic growth rates in the first half of the current year, especially in the tourism sector, which saw significant activity, experts believe that this activity is not solely due to government incentives, plans, and programs. Instead, it is largely a result of global and regional conditions and the flexibility and adaptability shown by investors in the tourism sector. 

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