For months negotiations with the International Monetary Fund have been undergoing to set the new programme for the economic reformation Jordan has been implementing under the supervision of the international organisation to mitigate and lessen the Kingdom’s financial and economic problems.
Officially, no statements have been made by Jordanian respective authorities informing citizens about the agreement that was supposedly signed. Neither was a one single press conference held to explain what difficult decisions await the public over the coming three years —the full term of the agreement; especially having heard Minister of Finance Dr Omar Malhas abruptly speak about the “Fund” enacting difficult decisions without explaining to the least extent, what these decisions are and how the government intends to address them.
Leaked information —and they are very scarce, indicate that the “Fund” has demanded a JOD500 million increase in revenue. Which in turn means more rentiering to meet the condition, followed by cuts in the general budget and other deficits. Consequentially, the already skyrocketing rates of poverty and unemployment will increase, reaching 20 and 15 per cent, respectively, according to the unpublished census.
Again, we see confusion dominate the financial scene, going back to the core and primal factor behind this current situation; excessive spending, whereby the Country’s general budget was expanded over the last decade from JOD4 billion to approx. JOD8.5 billion today. Actual steps towards financial reformation should have included mainly locking the budget, for at least three years, so that it does not exceed JOD8 billion. And it could have been done were it not for the exaggerated expenditures and more importantly for the lacking sense of responsibility, in most situations, when it comes to taking financial decisions.
Accordingly, a budget lock was initiated under former Minister Dr Amayya Touqan’s administration at around JOD8 billion over the years 2013 and 2014; it was vital that the lock was not to be exceeded. Now, however, in the middle of the negotiations with the IMF —who insist on increasing national revenue to match current budget compared to 2015, the government is turned head over heels. To this purpose, several meetings were held in an attempt to cut expenses by the value of the demanded increase, amid concerns of public reactions to any more difficult unilateral collection decisions to be taken in case Jordan submits to the international organisation’s conditions.
This confusion confirms, again, financial myopia, making it ever more difficult to believe in the Government’s ability to make the required reforms without having the necessary strategic and visionary insights.
Obviously, it can be safely said, that financial plans for this Country did not work out well, and will continue to drag the economy towards a dangerous fate should the current administrative mind-set endure; it will not help the Country avoid further suffocating crises, nor will this mind-set help Jordan’s extraction from the “Fund” programme for many years to come.
To begin with, addressing these concerns starts with the self-evident reminder that Jordan is not an oil producing country, and therefore that the Country has to be run in accordance to available resources rather than the good wishes of officials. Controlling public expenditure and locking the budget are possible solutions to containing the crises that is progressing due to financial mismanagement, manifesting in decision to increase expenditures one day, and controlling it the next! Moreover, I honestly have no idea why expenditure was increased yesterday, only to be decreased today!
The people have the right to know what lingers ahead. Just as the government requires to plan and reorder their financial affairs beforehand, so do citizens with limited income who happens to be the centre of your arrangement with the “Fund” in the first place, or are those hard decisions intended for some other people?