Jordan in 2017: Hopes for the Economy?

By Mohammad Aburumman

تم نشره في Tue 27 December / Dec 2016. 01:00 AM
  • Mohammad Aburumman

Next year, 2017, will neither be easy nor light for Jordanians to handle. There are dozens of variables leading us into a hard and historic curb, in regards to our political and economic situations, make no mistake, given the status quo.

Domestically, the economic crisis is the prime concern of both the State and Jordanians, and there do not seem to be any promising signs that the economy will overcome the suffocation, or that somehow, an exponential and sudden leap in investment is expected.

Quite contrarily, in light of the deteriorating regional situation, added panning terrorist activity, the possibility that businesses and businessmen would even consider investing in any major projects here is almost absolutely out of the question. At least until the general situation clears out, for in the end, Jordan remains part of the regional map, affected by its circumstance, despite the characteristically advantageous level of stability. Still, investors are rightly susceptible to being swayed out of investment when it comes to security risks and concerns.

That said, the main official premise is based on the attainment of three main goals:

First, expediting the establishment of the joint Saudi-Jordanian Investment Fund.

In this regard, it is expected that Saudi Arabia will pump USD3 million into the fund with the coming of the New Year. However, legislation, and actualisation of these funds into investments, that would require more time; years, without tangible results on the short term.

Second, addressing and resolving the issues hindering the revitalisation of the Amman-Baghdad commercial route, which would stir the local market and reinitiate exportation and importation, as well as transportation.

Indeed, the government has begun their endeavours to resurrect the commercial lifeline to and from Iraq, over the last few weeks, which would explain the ongoing communication on both levels; political and economic. Jordan has been receiving Iraqi officials to mediate the undergoing domestic political reconciliation in Iraq.

Third of all, Jordan is trying to abide by the International Monetary Fund (IMF)’s programme to lower the overall public debt to gross domestic product ratio down to 77 per cent by 2021.

In that discourse, so far, the standing economic indices are not optimistic; at least in regards to controlling public debt to not exceed the ceiling of 94 per cent.

Additionally, the government will be raising electricity tariffs, next year, should the price of oil per barrel exceed USD55, to maintain the current balance.

Notably, it is not easy to achieve the World Bank (WB)’s estimations for economic growth in 2018 to reach 3.1 per cent, compared to 2.3 per cent in 2016. The formula to attain it is hard and complex. There are low chances to secure immediate investments, that is one, and there is also the issue of limited international aid to cover the expenses of Syrian refuge in Jordan, as it only covers 40 per cent of the real cost.

Nonetheless, the government remains hopeful of actually realising the outcomes of the London Conference, should the Jordanian private sector invest in this opportunity and adapt the EU rule of origins, which would create plausible opportunities to employ Jordanian and Syrian labour force.

Talking about the dangerous implications of the unemployment; economic, social, and security, especially with our officials obsessed with youth recently, there is a sum of JOD80 million allocated to support the foundation and establishment of entrepreneurial youth projects, in an endeavour to vitalise employment.

Still, this isn’t much to hope for.

Meanwhile, the House of Representatives is prepping a bundle of reformed legislation, particularly sales and revenue tax regulation. However, the government would like to verify its predictions and not rush it, to avoid further amendments, which would reflect negatively on the stability economic policy.

Amidst all that, there are concerns that serious damage would be incurred on vital sectors and companies worth dozens of millions of Dinars.