Jordan Times
Tuesday, July 20, 2004
$1.26b needed to balance
funding gap, Awadallah says
By Mahmoud Al Abed and Rami Abdelrahman
AMMAN — Jordan needs $1.26 billion to offset a funding gap in socio-economic
reforms for the coming two years, a senior official told donors on Monday.
Minister of Planning and International
Cooperation Bassem Awadallah said the Kingdom is expected to spend $4.4 billion
by the end of 2006 on its Socio-Economic Transformation Plan (SETP). Around $2.2
billion of the amount was already secured, he added.
Meeting representatives of donor countries yesterday, Awadallah and Prime
Minister Faisal Fayez outlined the achievements of the three-year-old SETP and
the challenges facing it.
The ultimate goal of the programme, Fayez said, is to render Jordan an “example
of political, economic and social reforms... with a vision to transform into a
knowledge-based economy built on the potential of its people.”
Launched in 2001, SETP was designed to achieve reforms in the fields of human
resources development, basic government services and poverty alleviation.
Planning Ministry figures showed that the plan has so far channelled $700
million from foreign funds and privatisation proceeds. Under the plan, $224.7
million has been earmarked for projects this year, according to the ministry.
Awadallah said reforms efforts in general have yielded encouraging results,
citing an increase in gross domestic product (GDP) despite regional instability.
In the first quarter of 2004, GDP grew to 6.9 per cent, compared to 4.9 per cent
in 2002 and -0.3 per cent in 1999. Officials forecast GDP growth rate to stand
at 5.5 per cent by the end of this year.
The full implementation of the SETP will allow Jordan to sustain an average GDP
growth of 6.0 per cent per annum.
Per capita income is also expected to rise by 3.6 per cent by 2006, the minister
said.
Exports rose by 44 per cent in the first five months of this year, he added, and
inflation contained within acceptable levels, while the ratio of external debt
to GDP was reduced from almost 100 per cent in 1999 to 68 per cent by the end of
May.
But challenges remain.
Awadallah acknowledged that citizens have not so far felt the results of the
progress, noting that unemployment and poverty are still “stubborn problems”
that have to be handled. Statistics also point to a drop in direct foreign
investment.
Although additional grants from donor countries were needed for such reforms,
the minister said Jordan “does not want to rely on foreign aid forever.”
“The government is taking serious measures to help reduce dependence on foreign
aid in the medium- and long-term run,” Awadallah explained.
“Until we are able to achieve a self-sustaining budget and reduce our dependence
on foreign aid, we will continue to count on the support of our partners to
fully implement our reform programme,” he told the meeting.