How Jordan is stuck in billions of dollars in debt to China
In-depth: As the resource-poor Kingdom tries to escape expensive development deals with China, trade with Beijing is ramping up.
Amman, Jordan – After four years, the Chinese mega-mart in Jordan – Dragon Mall – has closed its doors. The 160 orientally-decorated stores and office spaces could not attract the business once hoped for the $20-million-worth project – built to serve as a reflection of China’s investments in Jordan.
Over the last decade, China has signed agreements for infrastructure projects in Jordan worth over $7 billion, including plans to construct a new Jordan-China university, a national railway network, and an oil pipeline to link Iraq and Jordan.
But as hope for the Dragon Mall’s success has faded, so too have China’s billion-dollar promises for massive development projects, the majority left as no more than ink on paper.
Chinese investment in Jordan – what Beijing once saw as its “gateway” into the Levant – has been “a flop”, Jesse Marks, a non-resident fellow at the Washington-based Stimson Center, told The New Arab.
One of the few Chinese projects that have actually materialised has left Jordan caught in a heated lawsuit to get out of a deal that would leave the resource-poor Kingdom billions of dollars in debt.
As per the current agreement for the construction of the Attarat power plant, a Chinese-built shale-oil power plant in the country’s southeast, Jordan must pay China $8.4 billion over a 30-year period, which, after the first two years of the plant’s operations, Jordan has barely managed to repay, according to the Associated Press.
However, the removal of the contract would undermine one of China’s leading Belt and Road Initiative (BRI) projects, likely fuelling tension between Amman and Beijing.
So, the Attarat power plant – once set to be the largest BRI private infrastructure project outside of China – has left Jordan between a rock and a hard place with Beijing, stuck in a lawsuit destined to end in frustration.