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Ammon News - AMMONNEWS - Saudi Arabia and Jordan agreed to set up a joint coordination council that will oversee investments by the Saudi Public Investment Fund.

The fund’s investments will be the largest in Jordan in decades and “will unblock billions of dollars” for the Hashemite kingdom, Bassem Awadallah, King Abdullah II’s special envoy to Saudi Arabia, said by phone from Amman. Agreements on nuclear power cooperation and on uranium extraction are also expected to follow, he said.

“We’ve never had an Arab investment fund that has come to commit billions of dollars in investments in leading sectors of the economy in Jordan,” Awadallah said. The new council will determine which sectors will be chosen and how much will be invested, and the two countries will also cooperate in Jordan’s Aqaba special economic zone, Awadallah said.

While Saudi Arabia has long used its financial clout to bolster its political influence in the Middle East and beyond, a recent drive to expand regional investments is also part of its plan to reduce its reliance on oil. The Jordan agreement follows a deal between Egypt and Saudi Arabia to build a bridge connecting the two nations, part of an agreed $25 billion (Dh91.7 billion) of Saudi investment that includes the development of an industrial area near the Suez Canal.

The bridge between Egypt and Saudi Arabia will boost trade and help to link major business hubs in the region, including Jordan and other countries, Saudi Deputy Crown Prince Mohammad Bin Salman said in an interview with Al Arabiya television last week.

Some economists are still sceptical about the kingdom’s post-oil blueprint.

“While the government’s longer-term ambitions are commendable, they need to be taken with a pinch of salt,” Jason Tuvey of Capital Economics wrote in an emailed report. “All Saudi governments since the 1970s have outlined plans to wean the country off its ‘addiction to oil,’ but in practice, little has changed.”

Jordanian economy

For Jordan, attracting foreign investment is crucial to strengthen an economy battered by the influx of as many as 1.5 million refugees who have fled the war in Syria. The Jordanian economy will grow about 2.7 per cent in 2016, less than the 3.5 per cent previously forecast, Finance Minister Omar Malhas said in an April 25 interview.

The joint coordination council will be headed by Prince Mohammed and Jordanian Prime Minister Abdullah Ensour, Awadallah said. The council will meet at least once a month for the next five months to reach an agreement on the investments, he said.

“We need major investments in leading sectors of the economy that will jobs, that will have multiplier effects, that will increase our exports and that will open up our markets,” Awadallah said. “Jordan has major advantages that Saudi Arabia can also take advantage of.”