LOCKDOWN CRISIS: JORDAN’S ENTREPRENEURS FACE EXTINCTION AS GOVERNMENT AID FAILS TO MATERIALIZE

The Devastating Consequences of COVID-19 on Jordan’s Economy

Amman, Jordan - The COVID-19 pandemic has had a devastating impact on Jordan’s economy, with lockdowns imposed by the government and a downturn in demand and revenue for most enterprises leading to cutbacks and closures among businesses. This has resulted in a loss of employment and revenue, pushing many more people into poverty.

A Growing Crisis: Poverty and Unemployment Soar

• Over 1 million people in Jordan are now living below the poverty line.
• The unemployment rate has soared to unprecedented heights.
• The lack of functional social safety nets and rising cost of living have exacerbated the situation.

Desperate Measures Lead to Crippling Debt

In desperation, many individuals have turned to loans to pay for basic necessities such as rent, food, healthcare, and even marriage expenses. However, this has only served to worsen their plight, with many falling prey to unscrupulous lenders who charge exorbitant interest rates and fees.

Human Rights Watch Documents Cases of Debt Trap

• Human Rights Watch has documented numerous cases of individuals being forced into cycles of debt by loan sharks.
• The organization has found that the government’s credit bureau, CRIF Jordan, is unable to produce regular score reports, making it difficult for individuals to assess their credit scores and enforce a blacklist.

Consequences of Defaulting on Loans

• Defaulting on loans can lead to severe consequences, including arrest warrants and even imprisonment.
• One woman who defaulted on an installment from a microfinance institution was threatened with detention after authorities sought her out.
• Another entrepreneur, who had taken out multiple loans to fund his poultry farm, was forced to close down after he fell ill. He left Jordan for Turkey, leaving behind a trail of unpaid debts.

Government Response Criticized as Inadequate

The government’s response to the crisis has been criticized as inadequate, with many calling for more effective measures to support small businesses and individuals affected by the pandemic.

The Future Remains Uncertain

As the situation continues to deteriorate, it remains to be seen whether the government will take concrete steps to address the plight of Jordan’s entrepreneurs and prevent further economic devastation.