Amman: Aiming to create 100,000 new jobs for Jordanians and Syrian refugees in the next five years, the World Bank’s Board of Directors has agreed to offer Jordan US$100 million in financing at rates usually reserved for the poorest countries, World Bank Group President Jim Yong Kim announced today.
The World Bank’s Board extended the highly unusual financing offer because of the extraordinarily difficult situation facing both the refugees and their Jordanian hosts. A partnership among the Jordanian government, donor countries and development actors will use the financing to develop and strengthen existing special economic zones to attract international and domestic investments. Additional details of the job-creation plans will be announced in coming months.
The announcement was made during a joint visit by Kim and United Nations Secretary General Ban Ki-moon. The visit reaffirms the global commitment to help address the impact of the Syria crisis through immediate humanitarian assistance and long-term development support. The focus of the visit is to find innovative solutions that begin to address the severe economic and social stresses resulting from the influx of refugees, including shoring up basic services and creating job opportunities for Syrian refugees and Jordanians alike.
“The Jordanian government has done an exceptional job in helping to meet the challenges posed by the large flows of refugees,” said World Bank Group President Jim Yong Kim, who was visiting Jordan for the second time in two years. “It is now up to the international community to do more to help Jordan – and provide it with the innovative financing it needs to continue hosting refugees. It’s also important for Jordan to enact necessary reforms that will attract investments needed for the economy to grow and provide shared prosperity for all Jordanians.”
The leaders of the two organizations met with King Abdullah II in the presence of Queen Rania. The World Bank confirmed its commitment to provide Jordan with additional concessional financing at zero interest rates to contribute to alleviating the country’s burden in managing the refugee crisis. The Bank committed to strengthening its work on governance and transparency issues, as well as bolstering human resources, in particular through improving quality and access in the education sector.
The Bank-UN delegation also met with Prime Minister Ensour and senior government officials. The visit included a trip to Zaatari camp where Jim Kim and Ban Ki-moon had an opportunity to witness the living conditions of the refugees and to listen to their personal stories and aspirations. In addition, they engaged in a conversation with students at Jordan University, to hear about challenges young people are facing and what they might need to overcome them.
The announcement came three days after Kim announced a separate $100 million financing to support education of Lebanese and Syrian refugee children living in Lebanon. The terms, approved by the World Bank’s Board of Directors, will be similar to those announced today for Jordan. In both cases, the Board broke new ground in giving a middle-income country financing at a rate reserved for the poorest countries.
The World Bank’s loans to middle-income countries such as Jordan are always at market rates, but the Board is allowing Jordan access to concessional financing under its IDA program — loans with low rates that are payable over long periods of time, making them effectively part grants.
The World Bank Group has reoriented its strategy in the Middle East and North Africa (MENA) region to promote peace and stability as the necessary conditions for development. Working with partners, the aim is to focus directly on the causes of conflict, while helping countries address its consequences and to recover and rebuild. The new strategy is built on four main pillars:
To raise the volume of financing needed to implement the new strategy, and to rally the international community around the common goal of promoting peace and stability in the region, the World Bank Group has partnered with the United Nations and the Islamic Development Bank Group. Together they have convened the international community to develop the New Financing Initiative to Support the MENA Region, which aims to: (i) provide concessional financing to support refugees and host communities in Jordan and Lebanon, the middle income countries of the region that have been the most impacted by the Syrian refugee crisis; and (ii) raise a greater volume of financing needed for post-conflict reconstruction and economic recovery for countries across the MENA region. Importantly, this initiative will create a unique platform among multilateral development banks and the UN to strengthen coordination on development assistance to the region at this critical juncture.
At the Supporting Syria and the Region conference that took place in February in London, the World Bank Group announced that it will triple its investment in the region as compared to the previous five years. Funding from the New Financing Initiative to Support the MENA Regioncombined with current programs is expected to total about US$20 billion over the coming five years. Furthermore, the New Financing Initiative to Support the MENA Regionaims to raise US$1 billion in grants from donors over the next five years, which will be leveraged to provide US$3 to US$4 billion in highly concessional loans for Jordan and Lebanon. In addition, in response to the current crisis, the World Bank Board of Directors agreed to offer Jordan and Lebanon US$200 million under unprecedented concessional terms to create jobs and increase access to education.
Next month, at the International Conference for the New Financing Initiative to Support the MENA Region – an event co-chaired by Dr. Kim, Mr. Ban and Dr. Ali – ministers from G7, Gulf Cooperation Council and broader European countries, as well as the heads of various international and regional organizations, will gather at the World Bank Group headquarters to pledge their support for the New Financing Initiative to Support the MENA Region.
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