Fiscal Stability: Political at Heart

By Jumana Ghunaimat

تم نشره في Mon 14 November / Nov 2016. 01:00 AM
  • Jumana Ghunaimat

Over the recent years, despite their difficulty, Jordan was capable of making it through, without slipping into the holes of economic crisis, the way Egypt has. So far, we have yet to pass any real coarse action or measurement.

Notably, and to a significant degree, this is due to the wisdom of the Central bank of Jordan (CBJ)’s fiscal and monetary policies, instituted some years ago, when the Bank’s administration realised early on the otherwise terrible fate that awaited our economy.

Indeed, we have weathered through perils of the recent economic storm; damaged economic growth indices, economic slowdown, decreased rates, but still, we made it well. At least, against all odds, the results were not catastrophic. These policies pushed off the risk scenarios some see inevitable, sooner than later; currency.

Over the years, and particularly since the beginning of the decade, the CBJ Mayor’s position in these regards was consistent; maybe because he had witnessed the catastrophic year of 1989, and knows wholeheartedly its pains and repercussions.

Wise fiscal and monetary policy, leading to stability in the financial sphere, is nothing but sheer strong political administration, which is the driving factor of stability, politically and financially. While both are interrelated, one would be mistaken to think that fiscal policy is merely a processing of figures, devoid of political and security aspects related to ground political variables.

Today, the situation in Jordan, compared to other countries; Egypt, most recently, seems to be panning out differently, on the positive side of the all things considered. The reserve of foreign and hard currency is touching on USD13 billion, while in Egypt, a country with a massive economy, the Central Bank’s reserve of foreign currency there stands roughly around USD25 billion.

Needless to say, despite not having received the sizeable kind of support Gulf countries had extended to our Egyptian brethren, Jordan has survived the odds, with the dozens of billions provided, ranging from loans to aids and grants, in addition to deposits marked up to sustain fiscal stability.

Now, as we edge on the brink of a new phase, we need to look back at what was attained, and keep up the work and the successful implementation of feasible, risk-rounded, and wise fiscal policies, to help Jordan make it through the storm other countries could not weather safely.

Through the years, the Central Bank has been engaged in the implementation of an autonomous, national, Jordanian vision, with a comprehensive view of the Countries problems, seeking to address them and resolve them, by providing credit and financing windows for different sectors, including tourism, the IT sector, renewable energy, as well as the facilitation of effective administration of the banking sector and its regulation.

In all honesty, and in light of such difficult conditions, one cannot knowingly separate between the CBJ’s performance and the outcomes of it on one hand, and the Kingdom’s social stability on the other, as any imbalances in these parts of economic governance, any uncalculated decisions, would bring about catastrophic, unbearable consequences.

Dr Ziad Freiz, Mayor of the Central Bank, is now more than ever aware of the political aspects of his purely technical work; the CBJ’s work goes beyond technicalities and figures to being a political dynamic at heart, one which only a few can see.

Economic officials in Jordan have always adopted a purely technical view towards their work, which is a problem. Dropping the political factor from the equation, the way the Israeli gas pact was signed regardless of its political consequence, is one of the major hindrances of progress, leading us into some of the most unreasonable places.

In the current stage, and due to the sensitivity of our situation, the endurance of threats that surround us, regionally, and the short-sightedness of international institutions like the International Monetary Fund (IMF) and the World Bank (WB), despite their expertise, the Central Bank; its Mayor, now face up to new challenges for the next phase, enabling our passage through the more difficult years to come, with minimal collateral damage.

In many instances, concerns are voiced by local and foreign officials who know little of the consequences of their words. Hence, facing up to them requires of the CBJ Mayor to be a politician before being an economist.

And today, as we reminisce the birthday of our late and beloved King Hussein, let us also remember how Jordan weathered the 1989 crisis in peace, with a political vision, that comprised back then, the Kingdom’s exodus from an otherwise catastrophic political, economic, and technical fallout.