Jordan seeks help for $2bn refugee bill

30 May 2016

Financial aid is only meeting one-third of average annual cost of hosting refugees, says minister

Jordan’s economy is buckling under the heavy burden of providing for the estimated 1.3 million Syrians that have fled to the country since the Syrian civil war began in 2011.

“Fiscally we’re bleeding, [our] debt is growing and we can’t borrow more to continue providing for the refugees,” Imad Fakhoury, Jordan’s Minister of Planning and International Cooperation told the Washington-based IMF at its spring meetings.

The annual burden imposed by hosting the Syrian refugees is estimated at $2bn, and has contributed to the 25 per cent increase in Jordan’s national debt between 2011 and 2015. “This leaves us with very little fiscal space to invest in our own development priorities,” said Fakhoury.

Syrian refugees now account for close to 14 per cent of Jordan’s total population of 9.5 million.

The refugee influx from its northern neighbour has had a significant impact on the government’s ability to deliver basic services, which include education, healthcare, utility and waste management. Jordanian public schools have had to accommodate 150,000 school-aged Syrian children, and water demand has increased significantly – an issue that has exacerbated Jordan’s poor water availability. An additional 1,700 tonnes of solid waste is produced daily and hospital beds are now behind demand by 24 per cent.

Fakhoury compared the refugee influx to a slow-moving tsunami that could send Jordan’s economy into a steady regression if left unaddressed.

He said financial aid coming from the international community could only meet one-third of the average annual cost of hosting the refugees, with the remaining gap largely unmet. “No one is helping us address new debt incurred over the past five years due to the refugee burden,” said Fakhoury.

It is understood that only 8 per cent of the Syrian refugees live in designated refugee camps. The rest are integrated into Jordanian communities and have been accused by some sections of the country’s society of taking away jobs from locals by accepting below-minimum wages. Apart from pushing down average wages, the refugees are also being blamed for rising apartment rents in key cities, where rents have increased by as much as three to four times over the past five years. The refugees are understood to be willing to pay higher rents since they share housing units with fellow refugees.

There are signs of additional support coming from the international community, such as the newly launched concessionary financing offered by the Washington-based World Bank for countries like Jordan and Lebanon that are hosting refugees. The funding comprises very cheap loans to help compensate for these states’ development needs.

While such initiatives are good, they are not enough, said Fakhoury.

However, despite the major challenges, Jordan’s policy of keeping an open border remains unchanged. “The majority of these refugees are women, mothers and children…. It is a difficult decision [for Jordan] to allow them to die…. Jordan sees itself playing a pivotal role in the region’s peace and security,” Fakhoury told the IMF.

He said extreme poverty and unrest could become a perfect recruitment ground for extremism and terrorism, the continued rise of which poses a direct threat to Jordan’s borders and to the Middle East as a whole. 

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