The Fund’s Inexplicable Indifference

By Jumana Ghunaimat

تم نشره في Sat 10 February / Feb 2018. 01:00 AM
  • Jumana Ghunaimat

After everything the government did, all the price hikes that followed for more than 160 commodities and services up, now comes the International Monetary Fund (IMF) telling us it is not enough.

Meanwhile, to us, Jordanians, the government crossed every line out there, despite our rejection, to meet the requirements of the IMF’s programme.

Since the first wave of price hikes, we’ve seen dozens of the marches, protests and demonstrations across the country. The public did not receive the decision well. They have openly expressed their dissatisfaction with these decisions, and rightly so. However, the continued state of public agitation is somewhat worrying, both socially and economically.

Still, the IMF seems indifferent to the Jordanian people’s suffering. They are not paying attention what is happening in Jordan since the decisions were passed. They also fail to recognise the amount of courage, if anything, it took the government to actually pass these decisions.

Everything they did was to meet the Fund’s requirements for the second phase of the economic and fiscal reform programme. But at what cost? And it is still not enough for the Fund. Especially in regards to the new income tax law. The IMF wants to expand the taxable demographic income segment and retract exemptions extended to households and individuals.

The IMF, as well as donor countries, see the current income taxation system as unfair, when in fact, adjusting it to their standards is unfair to Jordanians.

For years. the donors and international organisations have criticised the fact that 97 per cent of Jordanians do not pay income tax, and that the exemptions are too generous. Their reasoning is that these sort of exemptions are not extended even to the world’s largest economies.

By focusing on this aspect of our taxation system, the world is ignoring all the other imbalances in our tax structures, already draining the people’s limited incomes.

On the other hand, there is the issue of de-subsidising bread. The IMF has always demanded it. The Fund’s opposition to the decision was that the government’s exclusion of non-Jordanians, Syrian refugees included.

The government is currently engaged in negotiations with the IMF on a multitude of issues. On some aspects of the negotiation, the government and the Fund agree. On other aspects, they don’t.

One member of the government’s economic team informed us that nothing the government does pleases the Fund.

It would seem that the Fund does not care about balancing out the implications of unpopular decisions. All they care about is their terms.

We wonder why the IMF is so indifferent?

Stability, both fiscal and financial, is critical to the overall stability of the country. The truth is that these decisions may indeed help contain the debt-to-GDP rate on the mid- and long-run. But provoking the public so irresponsible is not the solution.

The IMF must consider the social and security repercussions of such decisions, when it comes to Jordan.

Between our suffocating economic problems, the government’s failures to attain self-sufficiency and our voluntary return to the Fund, and the intensifying public resistance to these decisions and the building pressure, the government and the IMF need to find some common ground to absorb the Jordanians’ fury!

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