By: Omar Obeidat

The Jordan Times

Sept. 4/2010 - Foreign aid through grants and soft loans to support development projects in Jordan are expected to reach $1.3 billion by the end of this year, Planning and International Cooperation Minister Jafar Hassan said.

He explained that around $900 million will likely be in grants (the final amount to be confirmed in October) while $400 million in soft loans, adding soft loans for this year are significantly less than 2009 while grants are higher.

During a meeting with the Jordan Times last week, the minister indicated that foreign aid through the Ministry of Planning and International Cooperation (MOPIC) to support the state budget is expected to range between $300-350 million by the end of this year mainly from the US, the EU and Japan.

Asked on whether the financial aid to support the state budget is certain, Hassan replied “I’m optimistic that the foreign assistance to support the budget will be close to this figure, but the final numbers will be confirmed in November.”

He remarked that capital expenditure in next year’s budget will focus on the Kingdom’s development priorities as determined by the different Ministerial sectoral Committees and the Council of Ministers.

He explained that the Committees are currently deliberating on the first draft of the Executive Development Program for 2011-2013 prepared by MOPIC and will end their work next week. Then the program will be considered by the Council of Ministers in September before being adopted. This will be the basis for the Government’s 2011 plan and budget, and this is the first time that a Government adopts this type of process in preparing for its spending needs.

“Since the fiscal space is limited and it is vital to reduce Jordan’s Budget deficit to maintain fiscal stability. Therefore, a very careful review of key priorities for the next three years is essential. For example, the Infrastructure committee will determine priorities within its sector (new highways or the national railway for example, a new dam or a water treatment plant and determine projects that are best left to the private sector to do under the public private partnership program).

 Then the Council will consider priorities between sectors to reduce the funding gap further if needed to a realistic level that will not undermine the Government’s ability to deliver on the goals it has set in its program at the end of the day.

MOPIC will work closely and intensively with donors and partners in international institutions to seek support in implementing the key projects that may have a funding gap in the Executive Development program for 2011-2013. MOPIC will also hold donor coordination meetings as soon as the program is finalized to discuss the priorities and funding needs in the new program.