The World Bank In Jordan

Jordan has begun its recovery from the COVID-19 shock — real GDP grew by 2.2% in 2021 following a 1.6% contraction in 2020. Growth rebounded to 2.5 percent in Q1-2022, supported by the reopening of the economy and the recovery of contact-intensive services notably tourism. However, higher global commodity prices led to an acceleration in headline inflation and labor market conditions remain challenging. The unemployment rate is still above pre-pandemic levels (22.6% in Q2-2022), especially among women (29.4%) and youth (46.1% among those under 25 years old). Labor force participation is also low, (33.5% in Q2-2022), particularly for women (14.2%), one of the lowest rates in the world.

Recent price increases are especially affecting the poorest households. The unfavorable global context also poses significant risks to Jordan’s external sector, despite the robust export growth and the solid rebound in travel receipts. At the end‑of 2021, Jordan’s public and publicly guaranteed gross debt stood at 113.7% of GDP[1] (debt net of SSIF[2] debt holdings at 92% of GDP).

Jordan is one of the most water-scarce countries in the world and imports over 90% of its energy and national grain consumption needs. Jordan’s population has also more than doubled (from 5 to 11 million) over the past two decades, putting additional pressure on limited natural resources.  Jordan also faces several climate-related hazards that exacerbate these challenges including significant temperature increases, precipitation decreases, and increased incidents of drought.  In the region, Jordan has been a pioneer on climate with ambitious Nationally Determined Contribution (NDC) targets, a green growth strategy, and efforts to green Jordan’s public and private investment framework and its financial sector.  Jordan’s fiscal situation demands that it finds private sector solutions to climate challenges and that it incentivizes these solutions from a climate lens as part of its development model.

Even prior to the COVID‑19 crisis, Jordan’s economy had been struggling with persistently sluggish growth dynamics and structural challenges. Between 2016 and 2019, real GDP growth averaged about 2%, insufficient to create enough jobs for Jordan’s young labor force. Part of this weak growth performance traces back to multiple external shocks Jordan has experienced in the past decade, including regional conflicts and the influx of nearly 1.3 million Syrian refugees (representing almost 13% of the total population). Sitting at the center of a volatile region, Jordan continues to play a role as an anchor for regional stability and for the global public goods it provides by hosting refugees and promoting cross-border regional cooperation and trade.

Jordan’s economic transformation remains contingent on identifying opportunities to expand the economy’s outward orientation and to implement reforms needed to promote private sector-led growth and job creation.  The WBG has been a key partner on Jordan’s reform agenda since 2018 and the launch of the Government of Jordan (GOJ) Reform Matrix.  The GOJ’s Economic Priorities Program (EPP) 2021–2023 furthers this agenda by prioritizing key business environment reforms activating Public Private Partnerships (PPPs) and financing in key sectors for investment and job creation. In 2022, Jordan launched a new Vision for Economic Modernization to target growth and opportunities over the next 10+ years for the country as well as a Public Sector Modernization Plan. Both processes will also guide inclusive and resilient growth and development efforts moving forward.  

[1] Includes securitization of arrears from IMF’s 3^rd Review Report, December 2021.

[2] Social Security Investment Fund.

Last Updated: Jan 09, 2023

The World Bank Group Board of Directors approved the Country Partnership Framework (CPF) for Jordan in July 2016, and its Performance and Learning Review (PLR) was approved in May 2021. The CPF rests on two pillars: (i) strengthening private sector-led growth and better employment opportunities for all and 2) improving the quality and equity of service delivery. The PLR adds a third pillar: 3) supporting an effective response and resilient recovery from COVID-19, and included a one-year extension of the CPF (until FY23) and a focus on reform implementation and results.

Over the period of the CPF, the World Bank’s portfolio in Jordan has expanded to support Jordan’s reforms and, in FY20–22, to promote COVID-19 response and recovery. As of September 17, 2022, the Bank’s active portfolio in Jordan comprised 15 projects valued at US$3.1 billion in loans, concessional financing, and grants. About 46.9% (a total of US$1.51 billion) had been disbursed out of a total commitment of US$3.2 billion in loans and grants. The World Bank Group has also used concessional resources to support Jordan’s Syrian Crisis Response, through an exceptional International Development Association (IDA) allocation of US$200 million and the establishment of the Global Concessional Financing Facility (GCFF). This facility has been used to help fund several projects in Jordan (see below).

Active projects span the following 10 sectors:

Jordan also administers a Multi‑Donor Trust Fund (MDTF), the Jordan Inclusive Growth and Economic Opportunities MDTF (US$62.7 million). It includes contributions from the UK’s Foreign, Commonwealth and Development Office (FCDO), Canada, Germany (KfW), Norway and the Netherlands. The MDTF funds 27 recipient‑executed and Bank‑executed grants to support reforms for private sector‑led growth and employment creation.

International Finance Corporation (IFC)

The IFC program in Jordan has doubled since 2010. It represents IFC’s third largest investment portfolio in the Middle East, Central Asia, Turkey, Afghanistan, and Pakistan region, with outstanding commitments of US$652.3 million as of July 31, 2022.

Over the past decade, IFC mobilized more than US$510 million across several landmark projects. The portfolio comprises of 27 projects, 58% of the total amount in Infrastructure, 29% in Manufacturing, Agriculture, and Services, 11% in Financial Institutions, and 2% in Disruptive Technologies.

A key objective for IFC in Jordan is to enable the private sector to create additional jobs and reverse the negative impact of high unemployment. Boosting the private sector’s competitiveness is the sustainable path to recovery and growth for Jordan, especially given the country’s fiscal constraints. In doing so, Jordan needs to advance investment climate reforms to reduce the cost of doing business and increase internal efficiency and market competition.

Accordingly, IFC recently developed a strategy for Jordan in April 2022 that is designed to tackle three main developmental gaps that are constraining growth and employment through the following strategic priorities: (i) increase competitiveness and create jobs; (ii) support sustainable infrastructure; and (iii) improve access and inclusion to address labor market segmentation and support entrepreneurship.

IFC undertakes undertake these activities in close partnership with the International Bank of Reconstruction and Development (IBRD), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank Group as a whole is critical to scaling up IFC’s engagement in the financial sector, continuing to implement a strong Public Private Partnership (PPP) program, addressing climate risks, opening new markets for job creation, and addressing high business costs and labor market inefficiencies. 

Multilateral Investment Guarantee Agency (MIGA)

MIGA has been active in Jordan’s PPP sector, and the country represents MIGA’s second-largest exposure in the MENA region. MIGA’s outstanding gross exposure in Jordan stood at US$557.8 million as of September 20, 2022. Jordan remains MIGA’s largest exposure in the Mashreq region. MIGA has been very active in the country’s PPP sector, having supported projects in the water, energy, and transport sectors. MIGA-supported projects in Jordan include gas power, wastewater treatment, Queen Alia International Airport, and bromine manufacturing. MIGA is working closely with the IFC advisory team to identify opportunities to support FDI flows into the transport sector.

Last Updated: Jan 09, 2023

• Sustainable Development

Improved Municipal Service Delivery  

The aim of the Municipal Services and Social Resilience Project (MSSRP) is to support Jordanian municipalities affected by the influx of Syrian refugees in delivering services and employment opportunities for Jordanians and Syrians. The project has improved municipal services for over 2.8 million direct beneficiaries, of which 20% are Syrian refugees and 47% are female. The project has also created over 27,400 working days of temporary employment and the number is expected to surpass 110,000 person days at project closing. The MSSRP builds on the Emergency Services and Social Resilience Project which was launched in 2014 with the aim to support municipalities that were affected by the Syrian Refugee Influx in restoring the level and quality of municipal services to the pre-crisis mode. Together with MSSRP, the total funding of grants has reached 28 Jordanian municipalities with a cumulative envelope exceeding US$102 million through multi-donor support.

Support to Smart and Resilient City Agenda

The World Bank Group has launched a joint WB-IFC initiative to build on Amman’s ambitious smart city and climate action plans to develop a Greater Amman Municipality (GAM)-WBG partnership and a “Smart and Green Amman Platform.” This cross-sector approach will focus on: (a) improving city planning, land-use, and governance systems to meet GAM’s smart city objectives; (b) managing and investing in GAM’s assets and infrastructure in a sustainable and resilient manner, including in Solid Waste Management; and (c) achieving financial sustainability and creditworthiness, amongst other priorities specified in the request.  

The World Bank is also conducting the Regional “Vibrant Cities: How Can Cities Support Jobs and Economic Growth” Advisory Services and Analytics and “Jordan Sustainable Cities” ASA with sub-activities focused on GAM. 

Jordan Sustainable Cities ASA: The objective of this on-going study is to conduct analytics and review of strategic priority areas in Greater Amman, focused on integrated spatial development, green infrastructure and buildings, and smart municipal governance and finance; and provide policy recommendations towards the city's ambition of near-zero carbon emission by 2050 and sustainable, resilient, vibrant and smart city transformation. The review is intended to support and build on other planned and ongoing activities undertaken by the Greater Amman Municipality (GAM)

Vibrant Cities ASA: This is a global and regional Middle East and North Africa region (MENA) study that draws on current economic research and analysis.  “Vibrant Cities” are urban centers that offer firms and households high expectations for financial returns on investment, for a sustainable and resilient future, and for dynamic and inclusive growth. The report seeks to uncover how tomorrow’s vibrant cities can be: (a) resilient and low carbon—planned with a view to limiting greenhouse gas emissions, reducing vulnerability to climate-related hazards, and rebounding from disasters and pandemics; (b) inclusive—meeting basic needs for all residents, while enabling all to aspire realistically to a better life through investment in skills and through equitable access to job opportunities; and (c) productive— driving economic growth, creating jobs, boosting incomes, and financing critical social and infrastructure investments.

• Human Development

Social Protection

Jordan Emergency Cash Transfer COVID-19 Response Project seeks to provide emergency cash support to poor and vulnerable households affected by the COVID-19 pandemic. The project supported 366,000 poor and vulnerable households by June 2022, of which 10% are female‑headed households. In addition, over 120,000 households have received cash transfers through the Takaful Cash Transfer Program. The project supports the Government’s efforts to bring several cash transfer programs together under the Unified Cash Transfer program that aims to reach 120,000 households in 2022. The project finances the Istidama program that aims to provide wage subsidies to 110,000 formal workers in firms most affected by the pandemic.

The project also supports Jordan’s social protection system reforms, which have been strengthened during the pandemic and are becoming a model in the region and globally in digitization, information management systems and social registry. The project also provides links to economic opportunities and empowerment.

Education

The Education Reform Support Program-for-Results aims to expand access to early childhood education, and to improve student assessment, teaching and learning conditions for Jordanian and Syrian children. The project has supported expanded access to early childhood education (ECE) for 32,000 children, as well as formulation and adoption of a new teacher professional standards and evaluation framework, as well as associated teacher training. It is currently supporting piloting of a new ECE quality assurance system, and definition of new student assessment and blended learning strategies.   

The Support to Private Sector Employment and Skills project supports the Government’s National Employment Program (NEP), which aims to increase employment amongst youth (age 18-40 years). The NEP was launched in April 2022 and combines wage subsidies for new hires in private firms with training stipends for these new hires to ensure the acquisition of lasting employable skills. As of mid-September 2022, close to 37,000 job opportunities were published on the NEP digital platform Sajjil, over 25,000 jobseekers had registered, and over 4,600 new employees were hired.  

Health

The Emergency Health Project is a results-based project that aims to maintain and deliver healthcare services at the Ministry of Health’s primary and secondary healthcare facilities. It also aims to improve the coverage and quality of primary health care services by strengthening the health system in priority areas, such as people‑centered service delivery. Uninsured and poor Jordanians and registered Syrian refugees will benefit from the health services provided at over 700 Ministry of Health hospitals and health centers across the country. Over a recent 12 month period (July 2020– June 2021), the project supported the Ministry of Health to deliver over 4.9 million primary and secondary health care services at the health facilities. More than half of the services were provided to female beneficiaries, including pregnant women, mothers, and girls.

The COVID‑19 Emergency Response Project aims to prevent, detect and respond to the COVID‑19 pandemic and to strengthen Jordan’s national health system for public health preparedness. The project has provided life‑saving medical equipment for intensive care and COVID‑19 clinical management at four COVID‑19 designated health facilities, including three field hospitals in Amman, Irbid and Ma’an. In addition, the project has supported the Ministry of Health to purchase COVID‑19 vaccines to vaccinate eligible residents in Jordan. The project supports Jordan’s inclusive and effective COVID‑19 vaccination campaign which targets all eligible residents, including Syrian refugees.

• Equitable Growth and Finance

Economic Opportunities, Jobs and Inclusive Financing

The Economic Opportunities for Jordanians and Syrian Refugees Program for Results and its additional financing have supported Syrian refugees’ access to the Jordanian labor market through progressive and flexible work permit policies. It also supports Syrian refugees’ access to digital finance, entrepreneurship, and social protection. The program has adopted a “whole of the community approach” to the refugee crisis by supporting refugees and their host economy. The program supports investment climate and investment promotion reforms as well the competitiveness of agricultural exports. The program also has a strong gender focus through its support of childcare licensing and social norms communication campaigns.

The Innovative Startups Fund Project has invested US$35.5 million in 11 funds.  ISSF’s investment mobilized US$71.5 million from private sector sources. ISSF has made US$107 million available through funds for start‑up investments in Jordan.  Additionally, ISSF directly invested US$2.7 million in 11 companies through direct equity co‑investments.  ISSF’s investments in these 11 companies mobilized an additional US$9.14 million from the private sector.  Finally, ISSF invested US$1.32 million in nine companies through the Innovative Futures, post‑COVID‑19 note. Of the investments made by the ISSF directly and indirectly, 24% are women‑led and 53% are youth‑led.

The Jordan Youth, Technology and Jobs Project (YTJ), which aims to improve digitally‑enabled income opportunities, has created 2,672 jobs or income opportunities by project activities to date.  Twenty companies are engaged in the “talents” program to create 1,324 jobs; 21 companies are engaged in the “market expansion” program to create 661 jobs; and 6 civil society organizations in the “Gig” program have created 687 income opportunities. It is important to note that the Ministry of Digital Economy and Entrepreneurship (MODEE) launched, in August 2021, an ICT employment initiative, Hafez, which created 1,964 jobs in private firms and 1,000 temporary jobs to support digital identity initiative this calendar year. MODEE leveraged the Hafez initiative to support job creation for entry-level youth in the ICT sector. The Hafez program was implemented within the wider framework of YTJ project, which relies on demand-supply dynamics to catalyze job creation in digital firms.^[1]

Reforms and Climate Resilient Investments

The Jordan Inclusive, Transparent and Climate Responsive Investments Program for Results is supporting the implementation of elements of the Reform Matrix by promoting public and private investment, including climate responsive investments,  and strengthening  accountability through evidence-based policy making, and improvements to service standards and statistical performance. It also supports sectors that have been impacted by the COVID‑19 pandemic, such as tourism. The program supports the Government of Jordan to maintain its climate stewardship in the region with mainstreaming the climate considerations in all relevant decision-making processes and investments through identification of climate responsive measures and development of policy and governance frameworks for supporting accessing climate finance including international carbon markets. It also establishes support systems to track and monitor mitigation actions and climate finance flows, and build capacities of relevant stakeholders to mobilize climate finance for meeting the country Nationally Determined Contribution (NDC) commitments.

The Strengthening Reform Management in Jordan Project aims to strengthen the coordination and delivery of policy reforms in Jordan, with a focus on the five‑year reform agenda, called the Reform matrix. It finances a Reform Secretariat and contributes to finance a Public Investment Unit at the Ministry of Planning, the PPP unit, and e-procurement reforms. Most funds are routed through a Reform Support Fund whose resources are allocated to reform implementing agencies. To date, the project has achieved most PDO level indicators and even overachieved some of them as in the case of the number of reforms coordinated by the Reform Secretariat including those directly benefitting women. The project has been granted additional resources and is being restructured to align with the updated Reform Matrix and the Economic Modernization Vision.

[1] The World Bank team is discussing with the PMU the possible inclusion of Hafez initiative results (verified jobs) into the YTJ project results framework, since the initiative was implemented under the wider framework of supply-demand 

Last Updated: Jan 09, 2023