JICA disburses $100m, 3rd and last tranche of its development policy loan to Jordan

AMMAN — With the Government of Jordan having fulfilled all prior actions required for disbursing the third tranche of its development policy loan with Japan International Cooperation Agency (JICA), the Government of Japan represented by JICA disbursed on Friday $100 million, which is the third and last tranche of the loan titled “Business Environment, Employment and Fiscal Sustainability Reform Development Policy Loan”.

The third tranche reforms included number of reforms in different sectors; the first concerning small- and medium-sized enterprises (SMEs) came with two parallel components; assessing gaps in the SME ecosystem in Jordan through a study undertaken by the stakeholder ministries and government agencies, as well as conducting an awareness campaign for the newly launched SMEs e-portal, according to a JICA statement. 

Another reform, which is concerning enhancing trade and export was in the shape of Prime Ministry’s approval for the final National Quality Policy and the final draft of the Quality Infrastructure Strategy. 

The third reform, which was also to facilitate trade, was achieved through the full operation of the National Single Window in Aqaba, the statement said.

As JICA believes trade and export is very important for the sound performance of the Jordanian economy especially in light of the ongoing COVID-19 Pandemic crisis, the fourth reform came also within this sector through systematically making export coaching a service available for industrial companies through the stakeholder line ministries and agencies such as Jordan Enterprise Development Corporation (JEDCO) and Jordan Chamber of Industry (JCI), read the statement.

As for the vocational training and employment sector, the first reform involves the approval and effectuation of the Technical and Vocational Skills Development Commission (TVSDC) bylaws. 

The second reform in this sector, which was achieved by the Ministry of Labour and its affiliate and independent partners, was preparing an assessment report on the number of the employment offices and their career counselling services provided to university students. 

The third reform within this sector, and to cultivate the culture of self-reliant and job matching at early ages for the youngsters, the Ministry of Education trained all of its educational counsellors on career guidance; to be better-equipped to provide this consultancy to their students in the Kingdom’s public schools. 

Lastly concerning the Ministry of Higher Education and Scientific Research, they reviewed and assessed all internship programmes provided by public and private universities in Jordan with the aim of improving and expanding these programmes. 

The ministry also upgraded their guidelines introduced to all universities/colleges with the aim of encouraging the involvement of private sector in the higher education process, which would result in harmonising inputs with outputs and thus ultimately meet the local and regional exact labour market needs. 

It also included the incorporation of e-learning in the educational system, which is becoming a necessity in light of the ongoing Pandemic.

The $300 million loan agreement was signed in late November 2018 during His Majesty King Abdullah’s visit to Japan. The loan was disbursed in three equal tranches, in which the first tranche amounting $100 million was disbursed in May 2019 upon the Government of Jordan fulfillment of the first tranche prior actions. 

Likewise, the second tranche was disbursed in March 2020 upon the Government of Jordan fulfilling the prior actions of the second tranche. JICA also implements technical assistance projects in related sectors to support stakeholders to fulfill some of the prior actions.

The loan conditions are soft including 25 years repayment period in which the first seven years as grace period, and very low interest rate. 

The loan is part of a series of soft development policy loans from the Government of Japan to Jordan that started in 2012, and so far accumulated to around $1 billion, the statement said.

The lending comes at a critical timing for Jordan especially during these difficult global economic challenges, including the recession caused by the COVID-19 pandemic, and is evident on the Government of Japan’s confidence in the Jordanian economy to improve especially after the recent IMF executive board approval for the first review mission under the ongoing Extended Fund Facility Programme and in response to stepping up support, the statement said.

With this last tranche of this loan being disbursed, JICA will start from next year in formulating a new concessional loan programme amounting up to $300 million, which was pledged by the Government of Japan during the 2019 London Conference, concluded the statement.