Gulf states to help Jordan ‘exit the crises’

Saudi Arabia, UAE, and Kuwait will hold a conference to discuss support for Jordan after a proposed income-tax increase sparked protests and led to the removal of the prime minister.

Leaders from the three Gulf countries and Jordan will meet on Sunday in Makkah to discuss “ways of supporting Jordan in order to exit the financial crises,” the official Saudi Press Agency reported, citing a statement by the royal court.

Jordan has been relying on foreign aid to shore up its finances. The influx of 1.5 million Iraqi and Syrian refugees has further strained a nation whose public debt equals its economic output. The government’s planned reforms were seen exasperating poverty in a country where unemployment is at its highest in 20 years.

Incoming Prime Minister Omar Razzaz defused some of the largest protests the country has seen in years after saying he will withdraw the tax bill for review. The bill came under an International Monetary Fund-supported reform programme that proposed lowering the threshold for taxable income, eliminating some tax breaks, and increasing levies on some businesses.

Saudi Arabia and the UAE could ease the pressure to rapidly proceed with reform measures the IMF is pushing by ponying up $500 million (Dh1,835 million) this year, said Ryan Bohl, Middle East and North Africa analyst at Texas-based Stratfor consultancy.