The disclosed budget figures include many unrealistic indices; they are not at all reflective of the difficult economic situation in particular, nor do they reflect public awareness of how hard the situation in general is.
There is a multitude of points to be inspected and reviewed for the Budget to look a little more realistic. These include:
First, the GDP growth rate. The new Budget Bill cites a 3.3 per cent growth rate. And as humble a rate as that is, it is far from true for this year’s performance at least, nor is it consistent with the standing political, economic, and social givens.
Second, the reduction of Public Debt. Apparently, given the indices in the budget, public debt will decrease as a rate, in proportion to GDP, from 93 to 77 per cent, as opposed to fixed figures. Meanwhile, public indebtedness will reach JOD26 million next year.
Third, attaining sustainable development, and reducing poverty and unemployment rates. And this I have no idea how, with the scale of ‘real’ capital expenditure; which actually bring in revenues, not exceeding JOD350 million!
Subsequently…
Forth, increasing financial revenues, particularly income from taxation. The Budget Bill estimates a JOD530 million increase in the section of public revenues. Whereas tax revenues are expected to increase by JOD450 million, or 20 per cent, driven by tax reforms underway, in accordance to the financial and structural reforms programmes, it may not be the best resort, as it will increase taxation strains noticeably.
Even so, attaining this gapping increase in domestic revenues seems very difficult, given the target indices, which will not be reached. Contrarily, trying to attain it will backfire and harden the attainment of development as well as the reduction of poverty and unemployment.
Hence, it would be obvious that the government has totally overlooked the social aspects and implications of perusing sought economic goals in the Budget. Allocations to reinforce society and social stability have not increased enough to mitigate the intensity of the economic situation or prevent more Jordanians from slipping into poverty.
Fifth, the Minister of Finance pledged to sustain financial stability. However, the absolute values cited in the Budget, be it inexplicable and unfeasible expansions in expenditure contradict his pledge. More so, it is because this Budget is the farthest there is from being “reformed”, the maintenance of financial, and therefore fiscal stability, would seem farfetched and baseless.
Sixth, a pivoting index should have been highlighted, as it is reflective on public finances and economic policy; the size of grants and aid, which is receding. As little a recession JOD37 million is, it is largely indicative of a new phase we need to prep for; a stage in the upcoming future with no more foreign grants or aid.
Seventh, aiming towards a productive economy, which does not seem to be the aim of next year’s Budget. The proposed direction seems uninclined to restructuring a consistent armful discourse; it is endlessly taking the Kingdom around in vacant circles.
Eights, speaking about expenditure, it would be worthwhile to point to a recurrent section under the new Budget: Due Payment for Prior Commitments, which is only increasing, year after year, without any explanations on the government’s part on what it is! It stands next year at JOD360 million; When did our government mess up? Where exactly did it go wrong? When was the Budget Bill violated so that these figures are being migrated from one year’s budget to the next?!
The 2017 budget is not better than any of our governments’ previous bills. In fact, it could be worse; it completely overlooks the truth, denying the difficult reality of our situation.
Notwithstanding, this was only the tip of the iceberg. The list of notes on the public budget goes on, only to result in an utterly unrealistic Budget Bill.
