World Bank approves a US $120 million loan to Jordan

The World Bank approved last Tuesday, July 2, the second in a series of three Public Sector Reform Loans (PSRL II) to support the Government of Jordan in continuing with an ambitious program to boost the efficiency of its public sector.

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By  Massoud Derhally Published  July 7, 2002

The World Bank approved last Tuesday, July 2, the second in a series of three Public Sector Reform Loans (PSRL II) to support the Government of Jordan in continuing with an ambitious program to boost the efficiency of its public sector.

This is the second loan as part of the World Bank's strategy to back the public sector reforms of Jordan for the years 2000-2002. The first loan of the same amount was provided to Jordan last June.

Underpinning the decision to accord the $120 million loan is the government’s efforts to reform and build capacity in three areas: civil service and public administration including e-Government, budgetary and financial management, and the judiciary.

Jordan’s economy has historically been characterized by an oversized public sector with limited private sector leadership and protected local industries. Following an economic crisis in the late 1980s, Jordan embraced a new development model that sought macroeconomic stabilization, enhanced efficiency and an expanded role for the private sector.

In 1996, the Government of Jordan launched a public sector reform program to upgrade its institutional capacity and deliver quality services in response to public complaints, as well as improve the contractual environment for the private sector.

“We are impressed by the Government’s commitment and effort to create a more accountable, performance-oriented public sector that is on a par with any country in the world,” said Charles Humphreys, World Bank task manager for PSRL II. He acknowledged that, “This is necessarily a long term effort, consisting of many small steps, which will require constant and transparent monitoring.” Humphreys affirmed the Bank’s plans to keep on working with the Jordanian government, “We stand ready to continue our collaborative work with Government in moving its agenda forward.”

The civil service component of PSRL II aims to make the public sector workforce more service-friendly and client-oriented, and ensure that government services are simpler, faster, more professional and more transparent. A key element of this program will involve improving the management, incentive, and accountability systems of the civil service. It will also involve the streamlining and simplification of government services.

In the area of budgetary and financial management, PSRL II will support the government in strengthening the link between sector policies, ministries’ expenditure programs and budget allocation. A user-friendly aid and investment project database will be developed to raise the efficiency of investments. In addition, this component will seek to instill a performance-orientation in ministries’ budgetary and financial management to boost services.

Judicial reforms will focus on promoting a business-friendly judiciary capable of serving as an engine for growth rather than an impediment to private sector investments. The reforms seek to bring the justice system up to par with international standards and place Jordan on equal footing with business partners in the European Union and the United States — both of which concluded free trade agreements with Jordan. Judges will receive training and benefit from the computerization of the courts in order to provide faster, fairer and more transparent judicial services.

The $120 million loan will be issued in one-tranche by the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank Group which provides loans and technical assistance to middle-

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