Ambiguity surrounds the financial mechanisms adopted by Saudi Arabia, Kuwait and the United Arab Emirates at a June 11 summit in Mecca to help Jordan navigate through a crippling economic crisis. The kingdom's debt has risen to record highs this year, totaling 96% of the gross domestic product, or $39 billion, while the unemployment rate rose to 18.5%.
The five-year, $2.5 billion package includes a deposit at the Central Bank of Jordan along with guarantees from the World Bank for Jordan to borrow funds and finance development projects. Jordanian authorities have not, however, made public the amount of the deposit, the terms of the guarantees or the share of the package allocated to development projects.
The offer of aid follows on the heels of protests that began May 30 opposing the government’s economic austerity policies and a draft income tax law. The demonstrators called for changes to the government's economic approach and a halt to borrowing from international financial institutions, including the International Monetary Fund (IMF). The protests ended June 6, after Prime Minister Hani al-Mulki's government resigned, and Mulki's designated successor, Omar al-Razzaz, promised to withdraw the income tax legislation.
Given the timing of the Mecca summit, political analysts have been speculating why Saudi Arabia, which chose not to provide aid to Jordan in 2017, has decided to resume financial support to Amman at this particular time.
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