Reality Vs Expectation: The Premier’s Best Option

By Jumana Ghunaimat

تم نشره في Tue 8 August / Aug 2017. 11:00 PM - آخر تعديل في Wed 9 August / Aug 2017. 09:15 PM
  • Jumana Ghunaimat

In light of the analyses in my previous two articles, given the contingency of our reality, today, it seems the government’s only option is raise prices and taxes.

There’s no argument; the government just has to collect the money to meet the International Monetary Fund (IMF)’s criteria.

Needless to say, it isn’t easy for the government to do so, especially after so many crises have driven wider the confidence rift between the state and the citizens.

Notwithstanding, the Huwaitat crises and followed by the Embassy incident, which resulted in the murder of two Jordanians by an Israeli guard, have not helped the government retain the public’s trust, at all.

Quite contrarily, these were just the latest of a series of crises and problems which have ruined the public’s perception of the government.

That in mind, the government must tread carefully.

No small amount of thoughtfulness is needed to assess the attainability of the IMF’s goals, particularly in regards to raising prices and expanding the taxable base.

Projections must be formulated to measure up possible reflexes and losses.

Any such objective assessments only lead to one conclusion: what is expected of the government is not realisable!

Therefore, the government must approach the IMF from a different perspective.

Meanwhile, it seems officials and experienced specialists refuse any other suggestion other than to abide by the IMF’s recommendations.

Their argument is that putting off these recommendations, or reforms, as they put it, will cost the upcoming generations an enormous sum. The errors of previous governments do not justify delay, nor sustaining a flawed setting.

Hopeless and out of ideas, perhaps, those see no other way than the IMF’s.

On the other hand, the government seems to be aware that JOD550 million is a lot of money. It is difficult for the government to come by such an outlandish sum.

So, the government may resort to asking the IMF to cut it in half; which isn’t bad, if it were possible to collect JOD275 million.

How easy is it, if at all possible, to muster up over a quarter billion Jordanian dinars?!

To be fair, the government knows it is difficult, and the Cabinet is haunted by it; what will they do?

Here comes in play the role of the Donor Countries, who know exactly the impact of the regional situation on Jordan’s economy, especially in regards to hosting 1.2 million Syrian refugees.

Who on earth would believe that the population in Jordan could ever exceed 10 million so suddenly?!

Donor countries know exactly how it all reflects on Jordan.

Under such conditions, it is wisely of the government to put off any such decisions entailing more price hikes or taxation, for at least a year.

During which, the government will seek to advance other reforms and legislations to enhance the business environment and open new markets.

Perhaps when this is done, if the economy responds well to these measures, then it would be safe for the government to raise the prices and expand the taxable demographic.

It is crucial that the government conveys to the Fund the reality of Jordan’s domestic situation; politically, socially, and security-wise.

Perhaps bringing it all together for the IMF will help them understand the benefits of extending the programme to 6 or 7 years, instead of three, and the threats of others imposing it as is.

Time extensions are possible.

None of the estimations indicate we’ll be done with the IMF by the end of the current programme.

In fact, most probably, we will have to sign yet another programme for God knows how long!

The Jordanians’ sensitivity to price hikes and income pressures has increased dramatically. There is no telling how it will all backfire if the people are pushed over the edge!

It is best that Dr Hani Mulqi’s government finds another way to address the IMF’s criteria.

The government doesn’t need more inconsiderate policies to obliterate whatever trust the people still have in their government.

Instead, the government needs polices which will bridge the gap between it and the people for the next few years.

Soon, the government will begin formulating next year’s budget, and before finalising it, the Cabinet has to finally negotiate the terms of the Fund, in order to move steady towards an attainable, realisable, clear future, armed with a practical, applicable plan.

Otherwise, the Country will be dragged through a minefield that we may or may never cross in one piece!

Between those who oppose the extension and those who stress it, Jordanians are hung in suspense, waiting to see what will happen.

That in mind, the question is: Does the government have the people’s confidence? If so, is it enough to convince the public of the necessity of these measures and of the price everybody will pay if we postpone them?

If not, how will the government appeal to the public’s trust to keep the woes of all this at bay?!

Last but not least; why does the government always look to increasing taxes and public revenue instead of drastically cutting costs?

This article is an edited translation of the Arabic version, published by AlGhad.