By Al-Fassel and AFP | 2023-11-19

As the Israel-Hamas war continues to rage across its border, Jordan, which has been delivering aid to Gaza and is seen as playing a critical role in regional stability, has been receiving international support to help it withstand the shock.

The International Monetary Fund on November 9 said it had reached agreement with Jordan on a new four-year loan program worth around $1.2 billion to help it weather financial shocks including the Israel-Hamas war.

The agreement, which is still subject to approval by IMF management, will replace an existing program due to expire early next year, the IMF announced.

"The external environment remains challenging," IMF Mission Chief for Jordan Ron van Rooden said in a statement, pointing to high global and regional tensions, elevated interest rates and uneven global growth.

"The conflict in Gaza and Israel poses yet another risk to the region and could adversely affect Jordan’s economy," he added.

Despite the fighting in Gaza, Van Rooden said Jordan was well-placed to withstand any economic shocks resulting from the conflict, barring a "significant escalation" in the fighting.

"The aim is to accelerate growth over the medium term to address persistent high unemployment, while ensuring continued macro-economic stability," he added.

Jordan's efforts come as donor countries and international humanitarian organizations warn Hamas against commandeering aid intended for Palestinian civilians, a practice the group has proven to have carried out over the years in support of its ongoing activities.

Jordan's stabilizing role

European Commission President Ursula von der Leyen will visit the kingdom on Saturday (November 18), amid fighting between Israel and Hamas that has raged for more than five weeks.

She met King Abdullah in Jordan after meeting in Egypt with Egyptian President Abdel Fattah al-Sisi and traveling to Sinai for the arrival of a European Union (EU) humanitarian convoy, her spokesman Eric Mamer said.

EU foreign policy chief Josep Borrell also will be in the Middle East from Thursday for humanitarian and political talks in Israel, Ramallah in the occupied West Bank, Bahrain, Saudi Arabia, Qatar and Jordan.

The EU on November 7 announced more than 900 million euros ($976 million) in aid for Jordan after Von der Leyen met the Jordanian monarch for talks dominated by the Israel-Hamas war.

Von der Leyen thanked Abdullah for "his critical stabilising role in the region," amid fears that the conflict could spill over to other countries.

A statement said "discussions focused on recent developments and the need to avoid a negative spill-over in the region, where Jordan plays a key stabilizing role."

It said the EU support package was worth 402 million euros in grants and 500 million euros in European Investment Bank loans.

Von der Leyen said the money was to bolster "Jordan's reform process and modernisation of its economy."

The bulk of it was to go to improving water supplies in the parched kingdom, while other funding would go to youth education and tourism schemes, and improving energy efficiency.

The announcement came a day after the EU said it was increasing humanitarian aid for Gaza by 25 million euros, bringing the total to 100 million euros.

Von der Leyen reiterated the EU's insistence on a two-state solution for Israelis and Palestinians. But she also said that, once the fighting stops, Hamas should not control Gaza.

She said different ideas were being explored, including an international peace force under UN mandate.