Jordan’s poor caught in fire of donors
AmmanNet and AlGhad Newspaper -The Northern Jordan Valley – At the beginning of every month, Su’ad, in her twenties, lives the horror of expecting to be detained by police. She is facing a 90-day imprisonment sentence for failure to repay her debt.
Her monthly installment is JD35 per month. But for Su’ad, this is a lot of money as her family’s monthly income does not exceed JD40.
In 2010, Su’ad obtained a JD500 loan to establish a small project in Northern Shouneh in the Jordan Valley. But she used the loan to pay accumulated electricity bills, grocery store debts and rent for shabby mud-house.
Su’ad’s voice shakes as she recounted her ordeal. “I was called by a man from donor agency who threatened to sue me, saying I would be made to even pay the fees of a lawyer appointed by them and every fils spent on the case.”
In Waqqas, a village within the boundaries of the Mu’ath Ben Jabal municipality, Ali, 29, tells us about his suffering since he graduated from secondary school nine years ago. Tears swelling in his eyes express his dilemma; he is unable to find a job that will help take his family out of poverty. “I tried everything to be able to join the army or the gendarmerie. I applied a hundred times for loans. Nobody gives us any attention.”
Hamdah is a woman in her thirties. She insisted on taking us to her house; a tiny structure under the staircase of a commercial building housing her along with her two sisters and a blind and paralyzed father. “This space is everything: it is a bedroom, a kitchen and even a bathroom. When one of my sisters wants to take a bath, we all leave, until she is finished,” says Hamdah.
In the village of Al-Mashare’, groups of unemployed young men congregated asking for urgent help. “For the love of God, take my phone number, perhaps you can find me a job. Nobody here gives us any attention. People of the Jordan Valley have no luck”.
The Northern Jordan Valley District is divided into three main areas:
1.Mu’ath Ben Jabal Municipality: with a population of 29,594 living in a several villages, comprising 33% of the District’s population.
2.Tabaqat Fahl Municipality: with a population of 31,388 or 35% of the District’s population.
3.Sharhabeel Ben Hasanah Municipality: with a population of 28,698 in various areas, or 32% of the District’s population.
Su’ad, Hamdah, and Ali, as well as all the young men of Al-Mashare’ represent a vivid image of the reality of poverty in this District. According to the latest survey by the Department of Statistics in 2008, poverty here stands at 28.6%. Government poverty alleviation plans did not help to pull the impoverished out of the quagmire. This is due to ill management by governments and institutions of grants allocated to the District. Lack of official attention given to the infrastructure of the area, such as education and health as well as ignoring agriculture, is further exacerbating poverty levels in an area known as Jordan’s food basket.
A survey study carried out by the Ministry of Planning in the Northern Jordan Valley in 2010 showed two main patterns for combating poverty in the disenfranchised areas. The first is medium-sized projects funded by the government through floundering charitable and cooperative associations and/or ineffective ones. The second is micro-loans offered by the government or development agencies to less than four individuals.
Twenty-five government and private funding institutions oversee the financing and support of these projects in poor areas, but most of them lack proper supervision tools, encouraging beneficiaries to use funds for other non-productive purposes.
Although there are numerous institutions supporting “specific” projects, only two out of ten families in the Northern Jordan Valley District (population 97,000) have resorted to borrowing loans to establish projects, according to a survey by these two journalists.
This, they say, is due to inability to fulfill the required guarantees demanded by the lending agency, including a debt guarantor, real-estate collateral, and interest rates that are often high.
Shying away from taking loans from donor institutions is a reality also admitted by an official report issued by the Ministry of Planning in 2007. The report spoke about the abstinence of the lending agencies from providing loans for the purpose of creating jobs in small projects, because of the people’s inability there to fulfill loan guarantees. This is the same view carried by the main lending parties in the Northern Jordan Valley, like that of the leading and oldest donor, the Hashemite Jordanian Fund (Sheikh Hussein branch) in the Northern Valley.
Three years after that report was issued, the branch stopped extending small loans to citizens there, because of inability of many beneficiaries to repay their loan on a monthly basis, says the NGO’s branch manager, Wafa’ Al-Amiri.
Small micro-projects incapable of taking off
Su’ad’s story places a large question mark on the feasibility of small loans in saving their owners from poverty.
Yusra, 25, borrowed from the Foundation for International Community Assistance (FINCA), one of the largest lending institutions in the Jordan Valley, $500 to buy and raise sheep, in the hope that this would solve her problem and that of her unemployed husband. “I bought one goat only, but the high cost of fodder prevented me from completing my modest project, so I sold it,” she said.
Both journalists met 10 women who had borrowed from the same institution to start small projects. But these plans never took off because of their deteriorating living conditions. They gave priority to repaying accumulated debts and securing basic living needs instead of starting the proposed project.
A former employee of the institution, who spoke on condition of anonymity, accused FINCA of seeking to “realize profits regardless of the difficult conditions citizens face.” She reached this conclusion after she noticed that the institution violates its own laws, including granting a minimum grace period of two months, and deducting the first loan payment from the loan check. She also described the mechanisms for monitoring the completion of projects as “non-existent”.
Women borrowers also emphasized that FINCA did not monitor the program from the start, with the exception of one assessment tour for inspection purposes.
Both journalists tried to verify the allegations made by the former FINCA employee. They inspected a receipt from a woman borrower which showed that the first payment was deducted from the first installment.
Confronting FINCA with these accusations, the institution threatened to take legal action against the writers. After that, they sent a written response on behalf of the company’s operations manager, Hashem Bdeir. It said: “the allegation that beneficiaries are not granted a grace period is devoid of truth because it violates the standards and policies of Finka International and Finka Jordan.”
Bdeir added: “Deduction (at the first month) may sometimes take place voluntarily and upon the client’s wishes. And in this case, this is legally permitted because it took place according to his/her wishes.”
The burdens of repaying and managing loans are not restricted to one specific institution. It was eleven years ago that Abu Munther, 50, obtained a JD3,000 loan from the Agricultural Loan Institution/Northern Jordan Valley branch. He used the money to buy sheep. But the livestock died within the first year, and he remains unable to settle the loan.
According to Mit’eb Al-Abbadi, the Director of the local branch of the Agricultural Loan Institution, Abu Munther’s case does not apply to all beneficiaries. He boasts a 60% success rate in loan repayment taken for livestock projects.
However, researcher and director of Al-Thuraya Social Studies Center Ahmad Al-Jarbi’ emphasizes that “success standards at lending agencies are based on loan repayment only”.
Mamdouh Al-Srour, director of the Coordination Committee for Social Solidarity, explains that “most financing loans are consumption-oriented and not production-oriented. In other words, even if someone borrowed for the purpose of spending on a specific project, he would spend it, as a result of his deteriorated economic situation, on basic living needs, such as house.”
All ten women interviewed by both reporters confided that they spent the loan on basic expenses, after convincing the donor of “fictitious” small projects. Yusra, says: “For example, we used to agree with a sheep trader to pretend before officials from the lending institution that he is selling us the sheep. But after the initial inspection tour by the donor, each of us goes a separate way and he gets JD50 from our loan.”
In order to verify this practice, both journalists tried to convince a sheep supplier, known for “cheating lending agencies in collaboration with some citizens” to help them obtain a loan. An agreement was reached on concluding the “fictitious” deal in return for JD50 to be paid after obtaining the alleged loan”.
Mr. Bdeir, the FINCA Operations Manager, in his written response, admitted there were a few individual cases of fraud. The director of the Deir ‘Alla branch of the Agricultural Loan Institution seconded Mr. Bdeir’s views and said that the monitoring of donors is done by taking random samples of beneficiaries instead of full and complete monitoring of projects because the 3000 borrowers in 2011 live in large scattered areas.
In Northern Shouneh, large fenced orange groves are looked after by expatriate workers and a few Jordanians. Outside their locked gates are signs indicating the name of their owners – mostly families who do not hail from this district.
Nearby, Jamal sits in front of his small farm, with his children and wife. All work on their plot of land filled with cauliflower. He looks at his modest cauliflower crop knowing that he cannot compete with owners of large farms because the quality and price of their produce is far better.
The District’s 183,000 dunums of farm land did not protect its residents from falling into the cycle of poverty. Despite this outstanding environment, agricultural projects, according to official Ministry of Planning leaflets, do not exceed 20% of development projects. (Attached is official data showing projects aimed for the Northern Jordan Valley).
This lack of official interest in reviving agriculture on the area’s development plan runs contrary to recommendations included in the 2010 report issued by the Coordination Committee for Social Solidarity: Analyzing the State Poverty in the Kingdom”.
The report emphasized the need to give the labor-intensive agricultural sector priority to help reduce poverty.
The names of former and present influential officials and businessmen from Amman are repeatedly mentioned by local residents when asked to mention the names of people who control the agricultural sector there.
The Jordan Valley Authority refused to give both reporters the names of the farm owners and the size of their farms on ground this request falls outside its jurisdiction.
It said that the Lands and Survey Department has such details. The latter said it had nothing to do with agricultural ownership in the Jordan Valley.
The poor of the Northern Jordan Valley are not only deprived of owning agricultural land. They are also deprived of an opportunity to work inside the walls of these farms because of an increasing number of foreign workers who accept to work on less wages and in more difficult working conditions.
According to the State of Poverty in the Northern Jordan Valley 2007, issued by the Ministry of Planning, “the presence of expatriate labor in this density affects the work opportunities for the area’s residents and lowers wages, which is inconvenient for the local labor.”
“Negligence in improving the infrastructure in pockets of poverty contributed to the failure of many developmental plans,” says the Director of the Coordination Agency for Social Solidarity, Dr. Mamdouh Srour.
One room and the semblance of kitchen provide a shelter for Abu-Ali, his wife and eight children. He works on a farm collecting crops, but only during seasons. He says the Jordan Valley Authority has been procrastinating in granting him a house and a plot of land. The Ministry of Social Development is also not interested in heeding his request to obtain a modest house under a housing scheme for the poor
Statistics by the Jordan Valley Authority, in charge of allocating land to disadvantaged groups, show it has allocated 3,500 of its 60,000 units to local residents. It is looking into 4000 other requests. The Northern Jordan Valley receives a modest share of land plots though it is the most crowded, with a population of 97,000, followed by Deir ‘Alla, with 53,000 people and the Southern Jordan Valley, with 44,000 people.
While Abu Ali and others are deprived of a residential unit, a plot of land is quickly allocated in Wadi Al-Rayyan area (basin number 36, 35, 38) to Qais Oweis, Director of the Jordan Valley Authority in the Northern Jordan Valley.
Oweis did not deny the information. He said in a written reply that the units he owns were made in line with a decision by the Board of Director. He said he bought one of the units which he was leasing for JD7, while the two other units are excess meters with a septic pit in the middle”.
The houses of residents in the Northern Jordan Valley suffer from bad structure. A survey carried out by the Ministry of Planning in 2007 in the Northern Jordan Valley criticized the situation of health services and the conditions of health centers in the region. “Most health centers’ buildings suffer from cracks, especially in Shouneh, Mashare’, Kraymeh and Adasiyyeh. Some centers, like Adasiyyeh, are located in the middle of residential buildings, causing problems with residents.
Five years later, and after spending $2.5 million on development projects in the region, the situation of health facilities has not improved, according to visits of centers in Adasiyyeh, Shouneh and Kraymeh.
In the field of education, the situation does not look any better.
Only 6 per cent of residents have been to universities, and school drop rates stand at 36%.
This report was completed with the support of Arab Reporters for Investigative Journalism (ARIJ) and under the supervision of Saad Hattar. It was prepared by the Investigative Unit in Al-Balad Radio Station.