DUBAI Nov 20 Gulf Arab states are looking at
ways to help Jordan's ailing economy after a government decision
to cut fuel subsidies
sent energy prices soaring and led to street protests.
The Western-backed kingdom has struggled to reduce its
budget deficit and secure a $2 billion loan from the
International Monetary Fund.
It has also suffered gas disruptions from regular supplier
Egypt following several sabotage attacks on a pipeline since
last year's Egyptian uprising.
UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan
said on Monday Jordan was facing an economic deficit due to its
dependence on importing heavy fuel.
"We, in the UAE and the Gulf Cooperation Council, are
studying ways to close or minimise this deficit," the state news
agency WAM quoted Sheikh Abdullah as telling a news conference
in Abu Dhabi with Jordan's Foreign Minister Nasser Judeh.
Talks to come up with a solution to Jordan's funding gap
could take some time, he said.
Instability in Jordan, a U.S. ally with the longest border
with Israel, would come at a volatile time for a region in
turmoil from Syria to Gaza.
Jordan has so far largely avoided the kind of unrest that
has toppled four Arab heads of state over the past two years.
But the decision to lift fuel subsidies caused scattered
protests which turned violent in many places.
Security forces detained 130 demonstrators who could be
charged with threatening the state for calling for the downfall
of King Abdullah.
Mindful of the public fury that exploded into street clashes
in the depressed south after price hikes in 1989 and 1996,
Jordan had been reluctant to raise fuel prices.
The rising energy bill after the disruption of cheap gas
supplies from Egypt and a steep drop in foreign grants have
pushed the aid-dependent kingdom to the brink of economic
crisis. Its budget deficit is now $3 billion, or 11 percent of
"The cut in the Egyptian gas to Jordan for two years is the
main reason for these situations which made us depend on heavy
fuel which cost us more than $4 billion," Judeh said.
The bombing of the pipeline bringing Egyptian gas has forced
Jordan to switch to costlier fuels for power generation. Saudi
Arabia declined this year to repeat its payment of a $1.4
billion cash injection to stop the economy heading to the brink
Last December, Gulf Arab countries decided at a summit in
Riyadh to set up a five-year, $5 billion fund to help
development projects in aspiring GCC members Morocco and Jordan.
The Gulf monarchies are seeking closer ties with Arab
kingdoms outside the Gulf like Jordan as part of efforts to
contain pro-democracy unrest that is buffeting autocratic ruling
elites throughout the Arab world.