U.S. to boost aid to Jordan in 2008 by 48 percent

By Suleiman al-Khalidi

AMMAN (Reuters) - Washington will raise substantially its aid to Jordan, a staunch Middle East ally, in 2008 to support the kingdom's economic and political stability, U.S. diplomats and officials said on Monday.

They said the 2008 Consolidated Appropriations Act passed by Congress and signed by President George W. Bush recently provides total grants of $663.5 million (338.5 million pounds) -- $363.5 million in economic support and $300 million in foreign military financing.

"The economic assistance for fiscal year 2008 represents a 48 percent increase over fiscal year 2007 appropriation," the United States Agency for International Development USAID Jordan Mission Director Jay Knott told Reuters.

The extra aid this year will help Jordan to repay some of its $2.5 billion of debt under last October's buyback agreement with the Paris Club of official creditors, of which the United States is among the countries eligible for early payment.

Funds have also been extended to support the country's balance of payments to help ease Jordan's $7.3 billion foreign debt burden.

Despite budget cuts in USAID programmes elsewhere, U.S. economic assistance to Jordan has increased dramatically over the past decade, U.S. officials say.

Jordan had been lobbying to raise the amount of supplemental aid it received in recent years for its strong backing of U.S. policies in the region.

The kingdom is among a handful of countries in the Middle East and Asia that have been awarded extra aid in recent years for its efforts in counter-terrorism.