Jordan Times
Wednesday, October 6, 2004
US signals support for $0.5
billion debt-for-equity swap for Jordan
By Jumana Ghneimat
AMMAN — Positive signals were received from the US administration this week in
support of a debt-for-equity swap initiative presented by the Kingdom to the
Paris Club, Finance Minister Mohammad Abu Hammour told Al Ra'i and the Jordan
Times on Tuesday.
According to the minister, an approval of a $0.5 billion swap deal at a 50 per
cent discount will help lower the net indebtedness by around $250-260 million
and reduce the budget's debt service burden.
In a telephone conversation, Abu Hammour explained that the initiative, proposed
at the meetings of the International Monetary Fund and the World Bank in
Washington, aims to raise the percentage of the debt permitted for a swap into
development projects to 50 per cent instead of the 30 per cent of total
indebtedness as previously allowed.
Abu Hammour pointed out that several meetings were held with US administration
officials and Arab finance ministers to examine aspects of cooperation,
especially in light of the challenges facing the national economy, foremost of
which is the international rise of oil prices and its impact on the developing
countries' economies.
The minister expressed hope that Arab countries will continue to provide oil to
Jordan under the signed deals noting that the question of any hike in prices
locally will become clear by the end of this month.