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Jordan’s refugee burden

By Tajuddin
In BUSINESS
Jul 13th, 2014
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Jordan is not a country you hear much about economically, but a number of economic issues continues to shape the direction of the country.

There is rising debt, warring neighbours, energy shortages, and millions of refugees – all of which mean Jordan needs more than a bit of economic help.

It has received $5bn from Gulf states mostly for infrastructure projects which in turn should create jobs; the US taken the unusual step of guaranteeing Amman’s debt which has allowed it to raise more than $2bn; and even the International Monetary Fund has chipped in with $2bn.

Now you might question why one country deserves such generosity but looking at refugee situation alone: it has taken in more than 750,000 refugees since the Syrian conflict began taking the total number of Syrians in the country to 1.3 million, which is 10 percent of Jordan’s population.

It is burdens like that as well as fluctuating gas supplies from Egypt which have pushed Jordan’s debt to $27bn, or almost 80 percent of GDP – and that looks like it will only keep rising.

Can Jordan’s economy cope without money from the international community? Can the world’s eighth-largest deposits of shale gas save Jordan’s economy? And can Amman steer the Kingdom’s fragile recovery from the rise of the Islamic State in Iraq?

We speak to the Jordanian finance minister, Umayya Toukan.

Price hikes in Egypt

Egypt has finally faced up to its economic problems by eliminating subsidies and as a result, fuel prices rose as much as 78 percent. But while President Abdel Fattah El-Sisi says the steps were long overdue, such claims do not seem to wash with the Egyptian people.

There is the spending we do not know about – namely the military. The estimate is that Egypt spends $4.4bn a year on the military excluding the $1.2bn it get from the US in military aid.

But the military also has its own business empire which accounts for between 5 and 40 percent of the economy – all businesses which pay no taxes.

We expand on this open state secret with Angus Blair, the president of the economic think-tank, the Signet Institute.

Contesting Indonesia

Rival candidates say they won Indonesia’s election, but whoever emerges as president though will have plenty on their plate with this rising Asian giant.

Over the last decade the Indonesian economy has made some remarkable progress. A lot of that is thanks to the guidance of President Susilo Bambang Yudhoyonom, but with a new president on the way, that will be a tough act to follow.

There are huge challenges ahead and we discuss them with Rajiv Biswas, the chief Asia-Pacific economist with IHS, joining us from Zurich via Skype

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