PHOTO
By Suleiman Al-Khalidi
AMMAN, Nov 9 (Reuters) - Jordan named investment banker Omar Malhas as finance minister on Monday, replacing veteran economic policy maker Umayya Toukan in a surprise move just days after the government began talks on a new International Monetary Fund aid programme, officials said.
No reason was given for the abrupt move to change U.S.-educated Toukan, who has held a string of senior posts in finance over the last two decades, including governor of the Central Bank, and is widely respected within the IMF and donor community.
Some officials suggested his departure was due to policy differences over the country's 8.5 billion dinars ($12 bln) proposed 2016 budget that was approved by the cabinet this week and has set a deficit target of around 3 percent of GDP.
Malhas, a highly regarded Western-educated investment banker with nearly twenty years of experience in senior banking posts in the Gulf and in Jordan, has never held a government position.
His last post was general manager of Jordan's second leading bank in terms of assets, Housing Bank for Trade and Finance
Malhas will join a team led by Central Bank Governor Ziad Fariz that will handle negotiations with an IMF mission that arrived in Amman last week to discuss the main components of a new extended facility fund.
The new fund will replace a three-year, $2 billion standby arrangement programme that ended this summer. The talks could be concluded by early next year, officials say.
The IMF said in July its earlier programme had stabilised Jordan's economy after it suffered severe fiscal strains brought on by higher spending in the aftermath of the 'Arab Spring' protests in the region in 2011.
Central Bank governor Fariz said last week that the new IMF programme would help the country maintain the pace of structural reforms while consolidating financial stability and cutting debt.
Jordan's annual GDP growth has fallen to around 3 percent after averaging 6.5 percent before 2009.
Due to the rupture of trade with Iraq and Syria and increased political volatility along the country's border, growth is expected to hover between 2.5 pct to 2.7 percent in 2015 from a more optimistic estimate of 3.5 percent earlier this year
The economy has suffered under the arrival of nearly a million refugees from Syria and Iraq, who now make up about 20 percent of the population.
IMF officials say Jordan's economy had mostly remained resilient in the face of regional turmoil.
One of the main challenges the economic team face is reducing public debt which climbed to 21.6 billion dinars ($30 bln) after a series of borrowing agreements, including a $1.5 billion U.S. guaranteed Eurobond last June that allowed the kingdom to borrow at low terms.
Jordan also successfully sold a US $500m 2025 bond at a yield of 6.375% last week. The kingdom's debt to GDP ratio is above 79 percent, which some consider too high for a developing nation.
(Reporting by Suleiman Al-Khalidi; Editing by Richard Balmforth) ((suleiman.al-khalidi@thomsonreuters.com; +962 79 5521407; Reuters Messaging: suleiman.al-khalidi.reuters.com@thomsonreuters.net))
Keywords: JORDAN MINISTER/FINANCE
AMMAN, Nov 9 (Reuters) - Jordan named investment banker Omar Malhas as finance minister on Monday, replacing veteran economic policy maker Umayya Toukan in a surprise move just days after the government began talks on a new International Monetary Fund aid programme, officials said.
No reason was given for the abrupt move to change U.S.-educated Toukan, who has held a string of senior posts in finance over the last two decades, including governor of the Central Bank, and is widely respected within the IMF and donor community.
Some officials suggested his departure was due to policy differences over the country's 8.5 billion dinars ($12 bln) proposed 2016 budget that was approved by the cabinet this week and has set a deficit target of around 3 percent of GDP.
Malhas, a highly regarded Western-educated investment banker with nearly twenty years of experience in senior banking posts in the Gulf and in Jordan, has never held a government position.
His last post was general manager of Jordan's second leading bank in terms of assets, Housing Bank for Trade and Finance
Malhas will join a team led by Central Bank Governor Ziad Fariz that will handle negotiations with an IMF mission that arrived in Amman last week to discuss the main components of a new extended facility fund.
The new fund will replace a three-year, $2 billion standby arrangement programme that ended this summer. The talks could be concluded by early next year, officials say.
The IMF said in July its earlier programme had stabilised Jordan's economy after it suffered severe fiscal strains brought on by higher spending in the aftermath of the 'Arab Spring' protests in the region in 2011.
Central Bank governor Fariz said last week that the new IMF programme would help the country maintain the pace of structural reforms while consolidating financial stability and cutting debt.
Jordan's annual GDP growth has fallen to around 3 percent after averaging 6.5 percent before 2009.
Due to the rupture of trade with Iraq and Syria and increased political volatility along the country's border, growth is expected to hover between 2.5 pct to 2.7 percent in 2015 from a more optimistic estimate of 3.5 percent earlier this year
The economy has suffered under the arrival of nearly a million refugees from Syria and Iraq, who now make up about 20 percent of the population.
IMF officials say Jordan's economy had mostly remained resilient in the face of regional turmoil.
One of the main challenges the economic team face is reducing public debt which climbed to 21.6 billion dinars ($30 bln) after a series of borrowing agreements, including a $1.5 billion U.S. guaranteed Eurobond last June that allowed the kingdom to borrow at low terms.
Jordan also successfully sold a US $500m 2025 bond at a yield of 6.375% last week. The kingdom's debt to GDP ratio is above 79 percent, which some consider too high for a developing nation.
(Reporting by Suleiman Al-Khalidi; Editing by Richard Balmforth) ((suleiman.al-khalidi@thomsonreuters.com; +962 79 5521407; Reuters Messaging: suleiman.al-khalidi.reuters.com@thomsonreuters.net))
Keywords: JORDAN MINISTER/FINANCE
