Pathways to Development Amid Declining Grants and Aid

The decline
in foreign aid and grants is no longer a distant possibility for which
preparations can be postponed. Preliminary data from the Organisation for
Economic Co-operation and Development show that official development assistance
provided by members of the Development Assistance Committee and their partners
fell by 23.1 percent in real terms in 2025.

This signals the need for Jordan to
reassess its assumptions about the resources it can count on to finance
development and public services in the coming years.

Speaking at
the plenary session of the World Bank and International Monetary Fund Annual
Meetings in Bangkok in the middle of this month, World Bank Group President
Ajay Banga described a development landscape marked by scarce resources,
limited fiscal space, and mounting debt burdens.

Alongside declining aid and
grants, this message underscores the need to prepare for a period in which
development financing becomes more difficult to secure and more competitive.

For Jordan,
this shift should prompt a reorientation of economic policy toward expanding
domestic production and income generation.

The country’s geopolitical position
and international partnerships matter, but they cannot guarantee that financing
will continue at the same scale and on the same terms.

Early preparation allows
for a gradual transition, while waiting could force decisions that increase
debt or place additional burdens on households.

The first
priority is to address the costs that constrain the expansion of productive
enterprises, particularly those related to energy, water, transport, and
financing.

A project that lowers a factory’s energy bill, reduces water losses,
or makes it easier for products to reach markets can raise productivity and
improve competitiveness. Its impact grows when it involves local suppliers and
small businesses, spreading the benefits across multiple sectors and
governorates.

In this
context, investment in Jordan’s natural resources deserves clear priority,
supported by independent feasibility studies, environmental safeguards, and
publicly disclosed contracts that secure a fair share of the benefits for
society.

These resources contribute more to development when they support
domestic industries and related services and facilitate knowledge transfer.

The
same logic applies to agriculture, pharmaceuticals, food processing, digital
services, and tourism, through interventions that address the actual barriers
to their expansion and to the employment of Jordanians.

Some may
argue that building these capabilities requires external financing in the first
place, and rightly so. Partnerships, grants, and concessional financing
therefore remain essential tools, provided they serve clearly defined national
priorities and well-prepared projects.

Loans, guarantees, and investment
partnerships must be assessed against their costs and future obligations, as
some arrangements that appear attractive may ultimately become deferred burdens
on the treasury and citizens.

This requires
developing multi-year scenarios for declining grants that identify the
programmes most exposed and their alternative funding sources.

These scenarios
should distinguish between commitments and actual disbursements while
protecting education, healthcare, and social protection. Weakening these
services raises the cost of living and undermines the human capabilities on
which development itself depends.

At the same
time, public revenues can be strengthened by combating tax evasion, reviewing
exemptions that deliver no development benefits, and improving the fairness of
tax collection and the efficiency of public spending.

Publishing the findings
of these reviews helps build trust and makes domestic resource mobilisation
more acceptable when citizens see that burdens and benefits are distributed
fairly.

The decisive
measure of this approach is growth in production and exports, alongside the
creation of stable jobs with decent wages and social security coverage.

Any
external financing that helps achieve these outcomes should bring Jordan closer
to a greater capacity to finance its needs from its own resources.