Making the Pledges Count

Jordan was thrown a lifeline at February’s international donor conference for Syrian refugees. But for the billions of dollars pledged to make a lasting impact, they must be spent on genuine long-term economic development.

By Osama Al Sharif

We could all be forgiven for wanting to breathe a sigh of relief following February’s donor conference in London, where the international community pledged more than $10 billion in grants and soft loans to help countries hosting Syrian refugees.

HM King Abdullah made an impassioned appeal on Jordan’s behalf at the conference, outlining the tough economic and social conditions that Jordanians are struggling to contend with due to the presence of over 1.4 million Syrians in the Kingdom. King Abdullah told delegates that a quarter of Jordan’s state budget over recent years had been spent on addressing the challenges posed by the influx of refugees—all this while donor support only reached 35 percent of the required amount last year.

Following the conference, Minister of Planning and International Cooperation Imad Fakhoury said Jordan expected to receive $2.1 billion worth of grants over the coming three years, with $1.5 billion being spent on sewage, education, health, and infrastructure. We also know the Kingdom will receive $700 million annually, as a grant, over the coming three years, which will be spent on infrastructure projects such as health, education, water and others in most affected regions. Another $1 billion will be spent on funding the education of over 90,000 Syrian children, while at least $1.9 billion will go to help fill the gap in our state budget through grants and soft loans.

In the view of some commentators, pledges to Jordan fell short of expectations and will be barely enough to cover the enormous costs of upgrading the infrastructure in the affected governorates. And, according to Fakhoury, Jordan is now committed to creating jobs for 200,000 Syrians in the Kingdom, while King Abdullah spoke of a ratio of five new jobs made available to Jordanians for every one offered to Syrians.

There’s no doubt that King Abdullah meant what he said when he spoke of the Syrian refugee crisis pushing Jordanians to “boiling point.” No two Jordanians would differ on the fact that our economic health is far worse today than five years ago. The statistics speak for themselves. Our overall debt today makes up 90 percent of our total GDP at JD24.6 billion by the end of last year; growing by more than 11 percent from 2014. And in spite of the GCC grant, which expired at the end of 2015, our economy grew at about 2.5 percent over the last four years; meaning that without the grant the situation would be far worse.

Against these and other bitter facts, Jordanians are entitled to some long awaited relief; that is if the donor countries meet their obligations and if the government is ready now to review its past economic policies which had failed to make things better. Provided that foreign cash keeps flowing in, mainly to help the state budget deal with a JD2 billion deficit, the government should act now to reverse some of its policies which have crippled industries and weakened the retail market to an extent that has driven many foreign investors to pack up and leave.

The presence of Syrian refugees in Jordan is a hard reality. They will likely be here for at least a decade or more. They need to be incorporated into the local economy with help of outside assistance. Equally, new jobs will have to be created for Jordanians. This can only be achieved through direct government spending on infrastructure projects, easing of regulations and taxes, and enticing the private sector to invest in new projects across the Kingdom.

It’s also true that foreign grants will never be enough to cover all our needs. But they are coming. We have received tens of billions of dollars over the past decade. The question is what did we do with all that money? It’s time to think out of the box and to realize that much hard work awaits us. But it’s lame for us to say the flow of aid isn’t enough and that we must demand more.

We must aim at jump-starting our sluggish economy. This is hard especially in these tough global and regional times. But the government will have to stop thinking and acting as a body whose main job is to raise and collect taxes from its citizens. Real incomes have not grown in years and the cost of living has increased. Fewer jobs are available to young Jordanians graduating every year.

Money raised must be redirected into new projects that will create jobs and boost the economy. Waiting for donors to pour money forever will not work. The time is now to alter our economic thinking and practice.