$2.5 billion aid pledged to Jordan

Mass protests in Amman, Jordan, over price hike. November 2012.

On Monday, in a joint statement, the United Arab Emirates, Saudi Arabia and Kuwait pledged $2.5 billion in aid for Jordan.

The development comes in the wake of Jordan enacting austerity measures which have given rise to massive protests in the country.

Subsidy cuts and price hikes, have pushed thousands of Jordanians to take to the street, to voice their opinion against the government’s economic policies. This rare and peaceful protests have prompted King Abdullah to sack the government and appoint a new prime minister.

Jordan’s allies are worried that the unrest could spread regions, including Egypt and Bahrain, where government’s are facing similar challenges.

Saudi Arabia, the United Arab Emirates, and Kuwait have said, Jordan would be the beneficiary of $2.5 billion in aid to alleviate the country’s economic and political challenges.

According to Saudi Arabia’s state news agency, SPA, the aid package includes a deposit in Jordan’s central bank, annual budgetary support for the next five years, guarantees to the World Bank, and funds for the development of projects.

The decision to support Jordan with the aid package was taken in Mecca where Saudi Arabia’s King Salman hosted a summit that was attended by Jordan’s King Abdullah, UAE Vice President Sheikh Mohammed Bin Rashed and Kuwait’s emir, Sheikh Sabah Al-Ahmad Al-Jaber al-Sabah.

Jordan is pursuing IMF-backed fiscal consolidation measures which are weighing very heavily on the middle-class and those who are placed on the lower end of the economic spectrum.

On Thursday, Omar al-Razzaz, Jordan’s newly designated prime minister, has conceded to a key demand of the protesters and said he would drop a proposed income tax bill.

The IMF is pushing Jordan to reduce its massive public debt.