Capitalizing on crises: the EBRD, Jordanian state and joint infrastructure fixes

Abstract

In 2011, the European Bank for Reconstruction and Development (EBRD) extended its mandate beyond Central and Eastern Europe (CEE) to the Middle East. Since then, it has supported financial institutions, private sector involvement, energy production and, most recently, infrastructure and public service reforms. While the EBRD presents itself as supporting the region's economies in light of the refugee ‘crisis’, I question the power relations driving its recent public investments there. I situate them within the context of global capitalism’s crises since the Great Recession and MDBs’ development agendas in the Middle East, specifically increased aid since 2011. I argue that, jointly advanced by the EBRD and Jordanian state, the EBRD’s public loans in Jordan offer fixes for capitalism’s crises to the benefit of donors, the state as well as private investors. More specifically, the EBRD’s projects and emphasis on the refugee “crisis” entrench and justify market-based neoliberal reforms in Jordan’s infrastructure and public services, opening them up to investment and expanding accumulation at the expense of public interest. The Jordanian state is an active partner and beneficiary of these projects, not only establishing the necessary regulatory frameworks for them, but also aligning them with its own development agendas and interests.

Keywords:

• EBRD
• neoliberalization
• aid
• refugee
• crisis
• capitalism
• infrastructure
• development finance
• accumulation
• Middle East
• Jordan
• neoliberalism

Acknowledgments

I would like to thank Susanne Soederberg and Ali Bhagat for their insightful feedback and thoughts on various versions of this paper, as well as my reviewers for their guiding questions and comments. I also owe a great deal to Open Society Foundation and the Columbia Global Center in Amman, who facilitated my field research, and to my interlocutors in Jordan, who generously contributed both their time and knowledge.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 The EBRD refers to the region as Southern and Eastern Mediterranean (SEMED) countries. Following Hanieh (2013, p. 16), I use “Middle East” in reference to Arabic-speaking countries in the region, whilst acknowledging the term’s orientalist and Eurocentric origins. This accounts for these countries’ relatively similar class relations and experiences, particularly in terms of development, including the protests that have swept the region since 2010 and 2011.

2 Since 2014, the EBRD has operated in Turkey, Russia and other Central Asian countries.

3 The similarity in strategies, goals and interests is evident in the From Billions to Trillions: Transforming Development Finance vision, which aims to raise development finance in response to the Sustainable Development Goals (SDGs). The note was jointly produced and signed by MDBs, including EBRD, alongside traditional IFIs like the International Monetary Fund (IMF) and World Bank. See: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/602761467999349576/from-billions-to-trillions-mdb-contributions-to-financing-for-development. The ERBD also often refers to itself as an MDB, i.e. as a member of the MDB Coordination Platform on Economic Migration and Forced Displacement, launched in 2017. See: https://www.worldbank.org/en/news/feature/2017/10/14/mdbs-announce-new-coordination-platform-to-accelerate-support-for-economic-migration-and-forced-displacement

4 I conceptualize these forms of accumulation as neoliberalization rather than neoliberalism, to understand them as ongoing and dynamic processes.

5 I use the term crisis to refer to these structural tendencies. To highlight added pressures on Jordan as a host country, I refer to the refugee influx.

6 The AAAA reflects longstanding donor interests in how it explicitly builds on and reiterates the objectives of the 2002 Monterrey Consensus (see Soederberg (2005) on the latter).

7 The Barcelona Process aimed to help Mediterranean countries implement structural reforms to grow their economies and incentivize investment.

8 The Deauville Partnership is a multilateral initiative, set up in May 2011 by G8 countries and other donors, including IFIs, MDBs, the private sector and civil society actors, to support MENA’s transitions.

9 See https://www.menatransitionfund.org/overview

10 Aid at a glance: Total DAC countries. Tableau. (Retrieved October 4, 2021). https://public.tableau.com/views/AidAtAGlance/DACmembers?:embed = y&:display_count = no?&:showVizHome = no#1; Aid at a glance: Jordan. Tableau. (Retrieved October 4, 2021). https://public.tableau.com/views/OECDDACAidataglancebyrecipient_new/Recipients?%3Aembed=y&%3Adisplay_count=yes&%3AshowTabs=y&%3Atoolbar=no%3F&%3AshowVizHome=no

11 For a complete list of EBRD’s infrastructure projects in Jordan: https://www.ebrd.com/work-with-us/project-finance/project-summary-documents.html?c14=on&s8=on&keywordSearch=

12 Blended Finance is “the complementary use of grants (or grant-equivalent instruments) and non-grant financing from private and/or public sources to provide financing on terms that would make projects financially viable and/or financial sustainable […] By injecting grant financing to commercial projects, the aim of blended finance is to create favorable conditions that crowd-in private investment” (OECD, 2015, p. 31).

13 In 2016, the World Bank, UN and Islamic Development Bank (IDB) established GCFF to provide concessional financing to middle-income refugee hosts, specifically Jordan and Lebanon, and support their infrastructure and services. See: www.globalcff.org.

14 The Jordan: Growth and Opportunity, the London Initiative 2019 was an international conference to support economic growth and investment in Jordan. It was co-hosted by Jordan and the United Kingdom. See: https://www.gov.uk/government/topical-events/jordan-growth-and-opportunity-the-london-initiative-2019/about

15 Interview with two EBRD officials. Beirut, Lebanon. February 13, 2020.

16 Interview with two EBRD officials. Beirut, Lebanon. February 13, 2020.

17 For the company’s history and press release on this project: https://www.hassanallam.com/about/history/company-history; https://www.hassanallam.com/media-centre/News/details/Jordan-Project-

18 Until at least the 1990s, the Jordanian government had regulated and subsidized public utilities (Yom, 2015, p. 299). While Jordan briefly experimented with privatizing its water utilities in the capital Amman, this was short-lived. The contract with LEMA (a consortium involving Lyonnaise des Eax, Montgomery Watson (US) and Arabtech Jardaneh) ran from 1999 to 2004, paid for through a $55 million World Bank loan and extended for two years beyond the original 4-year contract. After that, the government regained control, establishing Miyahuna (Amman’s National Water Company) and three other regional water companies. Though ostensibly private, these companies are not actually privatized: Miyahuna is owned by national entities including the Greater Amman Municipality (GAM), the Ministry of Planning and International Cooperation (MOPIC), the Ministry of Water and Irrigation (MWI) and the Electric Power Company, giving the government effective control and final say (Darmame, 2013; Interview with independent water and environmental consultant, July 23, 2019. Amman, Jordan).

19 Interviews with two officials at UNICEF Regional Office, July 18 and July 22, 2019. Amman, Jordan.

20 Interview with official at a USAID (United States Agency for International Development)-funded water project in Jordan, July 30, 2019. Amman, Jordan.

21 The Directorate was created to oversee PPPs in lieu of the Ministry of Finance and falls directly under the Prime Minister’s office.

22 This was established in coordination with the World Bank Group’s International Finance Corporation (IFC) to speed up the approval and implementation for PPPs projects in public infrastructure, in sectors like water, transportation, logistics and health, see: Essa (2020).

23 Interview with Senior Economist at the World Bank. December 7, 2020. Washington, DC, via Zoom.

24 This argument is made in the Jordanian media, i.e. Dababneh (2020). On how the Jordanian government has utilized this narrative to highlight PPP advantages, see Hassan (2015).

25 As early as 2011, Jordan noted the need to “develop water resources and upgrade their management efficiency” (GoJ 2011, II). It identified attracting funding as a key challenge facing the water sector and outlined decentralization and private sector engagement as means for development (GoJ 2011, 230–231).

26 Interview with official at the Greater Amman Municipality (GAM), November 23, 2020. Amman, Jordan, via Zoom.

27 Interview with independent water and environmental expert/consultant, July 23, 2019. Amman, Jordan.

28 See Ain Ghazal Wastewater Project. EBRD. https://www.ebrd.com/work-with-us/projects/psd/ain-ghazal-wastewater-project.html; and MR3: West Irbid Wastewater Project. EBRD. https://www.ebrd.com/work-with-us/projects/psd/mr3-west-irbid-wastewater-project.html.

29 Interview with official at a USAID-funded water project in Jordan, July 18, 2019. Amman, Jordan.

30 Interview with official at the Greater Amman Municipality (GAM), November 23, 2020. Amman, Jordan, via Zoom.

31 A former WASH (Water and Sanitation) official at UNICEF Jordan (Interview, December 1, 2020, via Zoom) highlighted that Jordan’s water capacity had already been exceeded before the refugee influx, which merely brought it to the surface alongside other problems, including lack of investment.

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Lama Tawakkol

Lama Tawakkol is Lecturer in International Relations at the University of Manchester, UK. Her research explores capitalism and the global political economy, with particular focus on the power and politics of development aid, the social inequalities it produces and its impacts on states and marginalized populations in the Middle East.