The Government’s Predicament: What To Do?

By Jumana Ghunaimat

تم نشره في Wed 21 February / Feb 2018. 01:00 AM - آخر تعديل في Wed 21 February / Feb 2018. 11:30 PM
  • Jumana Ghunaimat

It seems the domestic situation in Jordan is not getting any better.

Under the suffocating weight of economic crisis and the agitated public mood, due to a bundle of harsh decisions imposed by Jordan’s agreement with the International Monetary Fund (IMF), there are still amendments expected to change the income tax law. Not to mention further price hikes come 2019.

It is difficult to adjust the public’s mood after all these decisions. In order to make it through the financial year, the government has to think of ways to alleviate some of the pressures weighing on the people and reassure them that all will be fine, soon.

First and foremost, the government needs to understand and admit to the fact that Jordanians cannot bear any more pressure. Meanwhile, these easy solutions, which come at the expense of the citizen, are in fact far more costly.

Realising this is the first step towards resolving the crisis, as opposed to denying it. Recognition may even encourage officials to find other ways to meet the requirements of the IMF programme without suffocating the people.

One way to do that is to impose strict, tight measures on expenditure within the public sector. Exhibitionist consumerism, all the luxuries afforded to officials, only provokes Jordanians.

While doing so may not save the government enough money to substitute for the people’s wallets, but weight of this on public opinion is immeasurable. It conveys a clear message, that everybody is sharing weight of this tough phase.

Other than that, the government must do everything in its power to avoid further price hikes, regardless of the requirements of the IMF.

First, the people cannot take any more.

Second, the state too, as is its duty, has to balance between the social and security implications of its policies.

These past two years were too much.

Economically speaking, the government needs to pay more attention to the economy, in its holistic aspect.

By the end of the year, it is likely that the Treasury will find that it has not attained what it set out to do. Instead of collecting an additional JOD550 million, the government may actually find itself short on its baseline revenues.

The current economic slowdown will drain the people’s resources and incomes, which greatly cripples the prospects of economic growth.

Jordan is in dire need today for politicians and officials who recognise the hardship Jordanians face every day and know for a fact that meeting the requirements of the IMF is doable without further suffocating citizens.

There are other ways to lower debt and deficits.

Another issue that has to be addressed, is the new income tax law.

This issue is as sensitive as bread to Jordanians. The entirety of our taxation system needs to be overhauled.

Expanding the taxable demographic base is not the way to go about it, but rather revamping the tax system to achieve an equitable distribution of the load.

Taxation is supposed to be an instrument of income and wealth redistribution; of social justice.

Pushing for more deformities in our tax system will not attain the goals of our government.

There is another thing the government has to revisit; taxing books and agricultural produce doesn’t make sense. These items usually receive subsidies, or tax exemptions, not the other way around.

This last part may not be directly related, but the decision was extremely provocative.

The government has to reconsider its decisions, if at all it has any intention of getting through the financial year.

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