Jordan wins Trump aid carve-out for strategic projects and support

AMMAN – Millions of dollars in US grants for Jordan's largest water desalination project abruptly dried up when President Donald Trump announced

sweeping cuts to foreign aid

in January.

Within two months, support was flowing again, a result of diplomacy that has arguably put the pivotal Middle Eastern state on more solid financial footing than before the US President’s shock move to reshape global foreign aid in January, conversations with more than 20 sources in Jordan and America reveal.

Jordan, which stands behind only Ukraine, Israel and Ethiopia among the largest recipients of US aid globally, has won assurances from Washington that the bulk of financing worth at least US$1.45 billion (S$1.89 billion) annually remains intact, including military and direct budgetary support, according to Reuters conversations with the sources.

Most of the sources, including Jordanian officials, diplomats, regional security officials, US officials and contractors involved in US aid projects, asked not to be named to discuss sensitive ongoing diplomatic discussions. 

Four of them said payments resumed in March to US firm CDM Smith, which USAID tasked with overseeing the US$6 billion Aqaba-Amman Water Desali­na­tion and Conveyance Project, seen as key to the self-sufficiency of the arid kingdom.

The US has for decades relied on Jordan to help achieve its goals in the Middle East, including during the Iraq War and as a partner in the fight against Al-Qaeda in the region. Jordan hosts US forces under a treaty allowing them to deploy at its bases. The Central Intelligence Agency works closely with Amman’s intelligence services. 

Although several sources said much of the US$430 million annual assistance for development programmes remains frozen, hitting education and health projects, Ms Molly Hickey, a Harvard doctoral researcher studying US aid and Jordan’s political landscape, said these areas are seen as less strategically important.

“Mr Trump has protected funding considered critical to Jordan’s stability, namely defence, water and direct budget support,” she added, citing contacts with US officials that corroborate Reuters’ findings.

A US State Department spokesperson confirmed Jordan’s military aid was intact, calling the nation a strong US partner with a critical role for regional security. 

A decision has now been taken to continue US foreign military financing to all recipients, after Secretary of State Marco Rubio completed his review of foreign assistance awarded by the State Department and USAID, the spokesperson said.

The assurances to Jordan, extended during visits by King Abdullah and Prime Minister Jafar Hassan to Washington in recent weeks, have not previously been reported. They appear to mark a reversal of Mr Trump’s earlier warning he could target Jordan’s aid if the country did not agree to take in large numbers of refugees under a proposal to turn Gaza into a beach resort. 

In a private White House meeting in February, Mr Trump assured King Abdullah that US aid would not be used as leverage for political concessions, two US and two Jordanian officials familiar with the matter told Reuters. 

Senior White House aides met in recent weeks to discuss the fate of Jordan’s financing, three officials with knowledge of the situation told Reuters, concluding that the kingdom’s stability was critical to US national security. There was agreement in the meetings that aid should be restructured and enhanced to directly support that goal, one of the officials said.

None of the sources described specific concessions by Jordan, instead pointing to its position as a stable ally whose longstanding peace deal with neighbour Israel and deep ties to Palestinians are a bulwark against a wider Middle East conflict.

“We appreciate the US economic and financial support and will continue to engage in discussions that will benefit the economic sectors of both countries,” Jordan’s Minister of State for Communications Mohammad al-Momani told Reuters in response to a question about whether Jordan’s lobbying to maintain critical aid was paying off.

A financial squeeze on Jordan does not serve US interests, given the kingdom’s vulnerability to “radical influences”, said one senior Jordanian official, referring to Islamist group Muslim Brotherhood as well as Iran’s funding of militants in the region.

Last week, Jordan outlawed the Muslim Brotherhood, a political movement that gave rise to Hamas. Jordan accuses its members of a major sabotage plot. 

The plot was announced on April 15, the same day the Jordanian Premier met Mr Rubio. One official told Reuters the threat of political Islam and the Muslim Brotherhood was discussed at the meeting.

Another senior official and a regional intelligence official said economic pressure risked unrest among a population angered by the government’s treaty with Israel and its pro-Western stance. 

That view was bolstered by the foiled sabotage plot, the intelligence official said.

While Washington has moved to restore some World Food Programme projects to countries including Jordan, few of the USAID-led projects including those promoting political and economic reform have been brought back.

“Ensuring we have the right mix of programmes to support US national security and other core national interests of the United States requires an agile approach. We will continue to make changes as needed,” the State Department spokesperson said. 

“Eliminating that support would significantly worsen our deficit and debt burden,” former Planning Minister Wissam Rabadi said in televised remarks. “Today we face a deficit, and losing US$800 million would be devastating.”

However, five of the sources, including two US sources, told Reuters that Washington has now assured Amman this year’s support, due in December and already factored into the US$18 billion national budget, would not be touched.

Shaken by Mr Trump’s threats, Jordan has simultaneously been locking down further assistance from other allies. 

It has turned to Europe, Gulf neighbours and multilateral lenders since Mr Trump unveiled the global aid freeze in a Jan 20 memo, with the State Department initially offering waivers only for military aid to Egypt and Israel.

Last week, King Abdullah met Saudi Arabia’s Crown Prince Mohammed bin Salman in Jeddah. One senior Jordanian official said Riyadh was considering a military aid package to strengthen Jordan’s defence capabilities.  

Ties with Saudi Arabia have been strained in recent years, and it has not previously provided military aid. The official did not give a sense of the potential scale of the package.

Two officials and a senior Western diplomat familiar with the talks with the International Monetary Fund (IMF) said the government was close to finalising a sustainability agreement to supplement an existing US$1.2 billion, four-year Extended Fund Facility (EFF) programme. 

The new arrangement could unlock as much as an additional US$750 million in tranches, they added.

Other negotiations have already yielded results: three billion euros (S$4.5 billion) over three years from the European Union, announced days after Mr Trump’s aid cuts by European Commission head Ursula von der Leyen, who cited “geopolitical shifts”, US$1.1 billion in fresh financing from the World Bank and a US$690 million package from Kuwait-based Arab Fund for Economic and Social Development, both approved in April. 

Domestically, the Prime Minister has been rallying corporations and business leaders to contribute to a national fund, raising over US$100 million to relieve pressure on government finances.

“Jordan’s economy has largely weathered the storm,” said Dr Raad Mahmoud Al Tal, head of the economics faculty at Jordan University. The government’s lobbying “allowed it to retain the bulk of core aid and even get bigger donor packages beyond what was anticipated”. REUTERS