Ammon News - WASHINGTON -The World Bank has approved a US$300 million Development Policy Loan (DPL) to Jordan to support the government’s medium-term development program in the context of the current global economic crisis.

The approval of the Recovery under Global Uncertainty Loan came during a meeting of the World Bank’s governing Board of Executive Directors in Washington on Thursday Nov.19, 2009.

Under the agreement, the borrower will repay the loan over 20 years, including a five-year grace period.

The overall objective of the DPL is to support Jordanian government’s efforts to improve the economy’s resilience to adverse shocks.

It was first proposed in Jordan’s Country Assistance Strategy (CAS) for 2006-2010, but became necessary in the past year, when the Kingdom’s economy began feeling the pinch of the global financial and economic downturn.

The DPL will provide support to four key policy areas:(i) reducing fiscal vulnerability by broadening the tax base and enhancing effectiveness of government's expenditures; (ii) strengthening the financial sector by further enhancing regulation and supervision and improving access to finance; (iii) improving the business climate to encourage more private sector investment; and (iv) facilitating access of vulnerable groups to a more effective and fiscally sustainable social protection system.

"This is a robust program reflecting the government’s commitment to key fiscal and structural reforms, which mitigate the adverse impact of the global crisis, while addressing longer-term development challenges of sustaining growth and poverty reduction," Director for the Middle East Director, Hedi Larbi, said of Jordan’s program.

"I want to thank the Jordanian authorities for their commitment and excellent cooperation with the World Bank," he added.

While the DPL operation is a stand-alone program, it consolidates the key priorities of Jordan's National Agenda, and supports the three pillars outlined in the CAS: (i) strengthen the investment environment and build human resources for a value-added, skill-intensive and knowledge-based economy; (ii) reform social protection and expand inclusion; and (iii) restructure pubic expenditures and support public sector reform.

The World Bank’s work program in Jordan currently consists of eight projects, totaling US$288.5 million, focusing on education, social protection and urban development.

The portfolio includes grants supporting environmental projects (US$18.15 million), and one (US$254,000) earmarked for "Measuring the Impact of National Policies and Strategies on Gender. (Petra)