A midst the public outcry against the soaring fuel and food prices, very few people,
if any at all, took to social media to thank the Finance Ministry and the
Central Bank of Jordan (CBJ) for the success of the newest Eurobond issue in
the global markets, which came at a value of $650 million.
اضافة اعلان
Whether people
admit it or not, the huge effort exerted deserves a big thank you, simply
because we know that any success in securing loans means the budget deficit
will be covered.
Experts and those
who know the ABCs of the economy would acknowledge that the success of the
Eurobond plan can be safely described as “huge”. This is especially true when
we know that the issue has been oversubscribed more than three times after
attracting bids worth over $1.8 billion.
The issue
originally targeted $500 million, but the high demand by scores of
institutional bidders, including leading global investment funds in the US, UK,
Europe, Asia, and GCC countries, encouraged the $150 million increase.
To put the public
mind at ease, the government is actually extinguishing the previous Eurobond
sale of $1 billion by the end of this month. Reuters quoted Finance Minister
Mohamad Al-Ississ saying: “Part of the proceeds would go to meet $1 billion
Eurobonds that mature at the end of the month, in a move that will not raise
overall public debt”. Of course, this would be the case because investors would
not have paid any attention to the offer had the country shown signs of
possible defaulting on its due payments.
For skeptics,
whether they buy it or not, public debt is indeed an undeniable challenge, but
the actual make-or-break task is to sustain the good reputation of our country
among creditor circles.
Experts and those who know the ABCs of the economy would acknowledge that the success of the Eurobond plan can be safely described as "huge". This is especially true when we know that the issue has been oversubscribed more than three times after attracting bids worth over $1.8 billion.
Failure here would
be the real catastrophe as countries whose credit rating drops risk becoming
failed states. Thankfully, Jordan is not at risk of this due to our
highly-esteemed leadership on the one hand, and prudent monetary and financial
policies, according to financial officials, on the other.
Emboldened by this
history and status, the Finance Ministry and the CBJ have walked confidently
into a tough arena. GlobalCapital said that Jordan’s move was a test to see if
the global market has an appetite for investments that fall in this category,
especially in the aftermath of the COVID-19 pandemic and, we can add, as the
world economy is receiving a hit after a hit due to the raging Russia-Ukraine
war.
Jordan’s success
in securing investments in the bonds was good news to the world market in
general. One investor told GlobalCapital, “Jordan’s deal shows the EM (emerging
markets) primary market is not just open for IG names.” Reuters also quoted CBJ
Governor Adel Sharkas as saying: “The high demand was testimony to strong
investor confidence in the country’s fiscal and monetary stability.”
The development
also came after the International Monetary Fund said late last month that
Jordan “has made strong progress on major economic reforms to spur growth
despite higher fuel and grain prices resulting from the Ukraine conflict,” as
the creditor wrapped up the fourth review of a $1.3 billion Extended Fund
Facility program, which was launched two years ago. This will raise the funding
disbursed to Jordan this year to $550 million.
Jordan is not only
a survivor but a die-hard fighter that does not have the word “surrender” in
its lexicon. The Economic Modernization Vision announced last week at the Dead
Sea is a case in point, as the blueprint targets doubling economic growth and
rise from years of economic sluggishness brought mainly by regional turmoil and
the pandemic.
We have many
success stories. Let us move on and build on that.
The writer is a former advisor at the Royal Hashemite
Court, a former director of media and communication at the Office of His
Majesty King Abdullah, and works currently as a senior advisor for business
development at Al-Ghad and Jordan News.
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