Jordan - The International Monetary Fund’s Executive Board on Wednesday approved an approximately $1.3 billion Extended Fund Facility program for Jordan, according to a Finance Ministry statement.
The board’s decision, amid global uncertainty in light of the coronavirus pandemic, signals the fund’s “confidence” in Jordan’s economic reform process and support for its efforts to mitigate the impacts of the virus on vulnerable economic sectors and individuals, the statement said.
The fund’s approval on Wednesday is “particularly timely” given Jordan’s recent measures to protect its population from the coronavirus, which have included a strict curfew and the closure of travel routes, read the statement.
“The recent measures taken by the government to protect the physical and economic health of our citizens in light of the coronavirus not only fit within the program’s framework but also are well-aligned with it,” Minister of Finance Mohamad Al-Ississ was quoted in the statement as saying.
The program calls for an increase in the volume and efficiency of social protection spending, which, Al-Ississ noted, “is especially required in the coming months as the government aims to protect vulnerable Jordanians from the negative repercussions of the pandemic”.
“We will continue to work with the fund, in partnership with the Jordanian private sector, to mitigate the inevitable economic impact of the coronavirus on Jordanian businesses and citizens,” Al-Ississ noted in the statement.
Already last week, nine measures were announced by the government as an immediate cushion to the shocks faced by businesses, including lowering Social Security contributions, delaying general sales tax and customs payments, easing bank lending and streamlining procedures for customs.
In January, after months of “fruitful dialogue”, a staff-level agreement was reached by the fund team and Jordan’s authorities for a four-year program based on growth-inducing structural reforms and maintaining fiscal discipline.
The program caters to Jordan’s specific growth requirements, stemming from needs identified by Jordanian authorities in “deep consultation” with the private sector, noted the statement.
Benchmarks include lowering the cost of doing business, improved disclosures of public official assets and achieving a more equitable distribution of the tax burden by tackling tax evasion.
The fund’s decision signals Jordan’s macroeconomic stability to international investors, while also calling on the global community to further their aid to the country, the statement said.
“As we work to protect the physical and economic health of our citizens, this pandemic has made international cooperation more essential than ever. The IMF is a cornerstone of that,” the minister said.