Gulf states pledge $2.5 billion aid package to Jordan

Saudi Arabia to host Gulf conference on supporting Jordan

Saudi Arabia to host Gulf conference on supporting Jordan

Jordan, whose public debt almost equals economic output, has been hurt by the rise in global commodity prices.

Saudi Arabia, Kuwait and the United Arab Emirates (UAE) have agreed to provide a $2.5 billion (€2.1 billion) aid package to Jordan to help it weather an economic crisis and anti-austerity protests.

Price hikes and subsidy cuts pushed thousands of Jordanians to the streets last week against the government's economic policies.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has met with King Abdullah II of Jordan, at Al Diyafa Palace in Makkah, on the sidelines of the quartet meeting, to discuss means of supporting Jordan.

Austerity measures tied to the International Monetary Fund loan have seen prices of basic necessities rise across the kingdom, culminating in a week of angry protests over tax proposals that forced Prime Minister Hani Mulki, who was replaced last week with Omer al-Razzaz.

The package of aid will include a deposit in the Central Bank of Jordan, guarantees to the World Bank on Jordan and annual support for the budget of the Jordanian government for five years, according to a statement posted on the state-run Saudi Press Agency website. These contacts ended with a decision to hold an urgent meeting in Mecca to consult on the crisis.

In December 2011, the six-nation Gulf Cooperation Council that is headquartered in Saudi Arabia pledged to give $2.5 billion in aid each to Jordan and Morocco, both of which had been invited to join the regional group that year.

Gulf monarchies are not alone in their willingness and readiness to support the strategic Arab state: the High Representative of the European Union for Foreign Affairs, Federica Mogherini, also assured Jordan of continued financial support on Sunday.

Cash-strapped Jordan, a close USA ally that relies heavily on donors, is struggling to curb its debt after securing a $723-million loan from the International Monetary Fund in 2016.

An unpopular income tax law was also incensing the public until the government withdrew it in the face of the protests.

The country is reliant on donors and faces an uphill struggle to fix what the World Bank says are its "weak growth prospects" this year, while 18.5 percent of the working age population is unemployed.

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