World Bank?s Managing Director Sri Mulyani Indrawati. (Getty Images)
The World Bank’s Managing Director Sri Mulyani Indrawati has renewed the financial institution’s commitment to assist Jordan in solving its deep economic and social hardships stemming from regional political turmoil and the global economic slowdown.
Indrawati paid a two-day official visit to the kingdom, accompanied by the Bank’s Vice President for the Middle East and North Africa Inger Andersen and Country Director Hedi Larbi, to discuss cooperation with the government in the framework of the Country Partnership Strategy (2012-2015).
They held a series of meetings, which included a courtesy call on Queen Rania and separate meetings with government officials, including Prime Minister Awn Khasawneh, Minister of Planning and International Cooperation Jafar Hassan, Minister of Finance Omaya Toukan and the Governor of the Central Bank of Jordan Ziad Fareez.
In discussions with civil society organizations, the World Bank’s senior management team heard about their activities and challenges across a wide range of issues including education, job creation, gender, poverty reduction and access to information among others.
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The Bank delegation also had the opportunity to meet with Parliament’s Economic and Financial Committee. In addition, Andersen also visited the Anti-Corruption Commission to get a better understanding of the Commission's work and to underline the Bank's strong support for the work of this independent Commission. The Vice President also met Minister of Water and Irrigation Mousa Al-Jamani and Minister of Social Affairs Nisreen Barakat.
In government meetings, officials shared the complexity of the internal and external factors that are straining the Jordanian economy. The Prime Minister underscored that rising food and fuel prices, as well as the interruption of gas supplies from Egypt because of the frequent acts of sabotage targeting the pipeline in the Sinai Peninsula have significantly taxed citizens, especially middle and the lower-income households.
Indrawati, addressing members of the media noted that Jordan’s economy has naturally been affected by the Arab uprising, due to its close proximity to the unfolding events. “The (Jordanian) economy has been strained due to a drop in foreign direct investment, tourism, remittances and exports,” she said. “The rise in food and fuel prices has heavily impacted the budget.”
For countries like Jordan and other Arab countries now in the process of change, Indrawati said “enforcing a rule of law that is not selective and hearing the voices of the people” are the key pillars of an approach. The rule of law, she said, depends on a “reliable judicial system and on a strong, informed media to help create the culture of checks and balances.”
Much of the official discussion focused on Jordan’s efforts to stimulate growth and create jobs, strengthen the social protection system and consolidate the macro-economic framework in the country, which remains vulnerable to external shocks. In this context, the talks examined how best the new Country Partnership Strategy (CPS) can be implemented to provide the necessary support to the government to create jobs, protect the poor and vulnerable, achieve fiscal consolidation and enhance transparency and accountability.
For the period of the CPS, the Bank's program in Jordan includes technical assistance in a wide range of sectors and policy areas as well as financial support of $500 to $650 million. The International Finance Corporation, the Bank Group’s private sector arm, has significantly ramped up its program in Jordan in recent years, and will continue to do so. The IFC portfolio is currently $653 million, and annual investments of around $100 million are expected over the CPS period.
"At this time of incredible change in the Arab world, and of global economic crisis, Jordan is clearly affected," said Andersen."In the face of these challenges, Jordan has strong fundamentals and it is important that the government capitalises on these. It has strong institutions, a highly educated and skilled population, vibrant entrepreneurial creativity and a strong private sector, and significant reserves. It also has a growing and active civil society which is critical to foster meaningful debate.”
Andersen noted that, in the context of the new CPS, the overarching goal of the World Bank Group’s engagement is to help Jordan enhance its growth resilience and create jobs for all Jordanians. To this end, the WBG will provide the necessary support to Jordan in the following three priority areas: (i) strengthening the foundation for growth with a focus on competitiveness; (ii) enhancing social protection mechanisms and promoting local development, and (iii) creating fiscal space to increase the capacity to cope with shocks.
“By moving quickly along the path of reform, by better targeting its social expenditures, by capturing efficiencies and by ensuring a strong business environment, Jordan can address short-term challenges, while it also attends to longer-term priorities such as energy diversification and water security," said Andersen.
Larbi stressed the importance of this high-level visit. “It is a testimony of the importance the Bank attaches to its relationship with the Kingdom of Jordan,” he said. “It provided an excellent opportunity for senior management to hear first hand from the government the challenges it is experiencing in these critical circumstance, and to share the government’s strong commitment to the political and economic reform plan to restore growth and further social development agenda.”