$178m of Jordan's debt to US rescheduled; extra aid expected  

Rana Awwad


AMMAN — The US government is expected to provide extra assistance to Jordan to help the country weather the economic repercussions of the US-British war against Iraq.
Washington also announced the rescheduling of around $178 million out of Amman's $448 million debt to the US in a bid to alleviate Jordan's financial obligations and propel its economy.

"I believe there will be additional funds that have not gone through our process — through the Congress — for appropriation of funds," US Ambassador in Amman Edward Gnehm said yesterday.

The exact figure of the aid remains undisclosed, but media reports from Washington said the Kingdom is expected to receive more than $1 billion in US assistance as part of an emergency package for the US' Middle East allies.

Jordan has predicted that a war on Iraq lasting between 4-8 weeks would cost the economy $1-1.5 billion, and has for months engaged in talks with donors to secure extra cash.

"We are very mindful of the needs of Jordan today as a result of the conflict in the region, we've been a partner, a friend, a supporter in the past, and we will be this year," Gnehm told reporters gathered at the Finance Ministry for the signing of the debt rescheduling agreement.

Last year, US economic and military assistance to the Kingdom reached almost $0.5 billion, an increase of nearly $200 million over the 2001 figure.

Sunday's agreement, the eighth that Jordan strikes with the Paris Club of creditor nations, will release the country from paying $178 million in principal and interest due the US between July 2002 and end of 2007.

Instead, Jordan will pay the rescheduled amount in 30 biannual instalments over 15 years starting mid-2007, explained Finance Minister Michel Marto.

The US has rescheduled Jordan's debt six times since 1989. In 1997, it cancelled $700 million in loan repayment obligations.

In July, Jordan signed a multilateral debt relief package with 12 creditors of the Paris Club, underwhich it managed to reschedule $1.2 billion of its $4.2 billion external debt.

Marto said Jordan has concluded rescheduling agreements totalling $1.04 billion with eight creditors, adding that four more such deals have been negotiated and are awaiting signature.

The four countries are Japan, Denmark, Italy and Switzerland.