The pick and chose reform

تم نشره في Thu 20 February / Feb 2014. 10:40 AM - آخر تعديل في Sun 23 February / Feb 2014. 06:00 PM
  • (File photo)

By Jumana Ghunaimat

With the decision to lift subsidies on fuel prices late 2012, the government sought to dispense cash support as quickly as possible. It specified a general criteria for earning this aid, that is a household net income need to be less than 10,000 Jordanian dinars.

Back then, the government said that the cash allocated for this financial aid is around JD300 million, and would save the treasury some JD800 million (The amount of the previously-implement subsidy on these strategic goods).

The cash support system was established, and fuel was being sold at international prices. Dr. Abdullah Ensour's government succeeded in passing the decision, unlike many other government's before his, despite the tough domestic and regional political atmosphere then.

In 2013, the Ministry of Finance did not spend all the cash support that was announced, with the total number spent being less than JD270 million. The government still believed this to be a large amount, and set to decrease it to reach JD210 million, with JD60 million less than last year.

Simple calculations reveal that some 171,000 households (Some 857,000 individuals) will not receive cash support. The number could go up to one million individuals, thanks to the new criteria implemented by the government for the support.

Decreasing the support mean one thing only; less people will benefit from it. Many households will not receive it anymore, including houses with expatriates, in addition to fixed-income families, who owns fixed assets valued at JD250,000 or more.

Depriving this many people from the support can mean two things: Firstly, the government, when it first started dispensing it, did not review the support applications properly, and did not study the criteria as it should, which led it to give the support to some who did not deserve it, as the officials say. That is true in some cases, but it does not apply to all the individuals in the one million people who will be deprived from it now.

Secondly, it could mean the government sought to lessen the most important item in its budget, at least for its soothing consequence on social congestion. The decision would have looked reasonable, had the government deprived those who do not deserve the support only, and sought to increase the amount the deserving households receive; those who have paid much after freeing the fuel prices, and have been suffering a lot before the prices increased.

Reason, and diligence in regards to social and economic matters, dictate that the government should increase the safety network, not decrease it, especially that it is still adopting the principle of losing the direct subsidies on goods and services.

The decrease came due to an economic reform program signed with the International Monetary Fund, and it included a governmental commitment to lessening the fuel subsidies, which led the government to reviewing the criteria for cash support (Around JD70 per person, per year).

Nobody disputes that the support should go to those who deserve it. The point of contention is in how the priorities are set. As long as the government is interested in lessening the support, could it please tell us what is their plan to decrease its spending on other items? That is, if they have such a plan in the first place.

The issue is reform is random and incomplete. The cash support is not the only deformity in the state budget, and scraping it is not the only decision it took and turned out to be harmful.



This article is an edited translation from the Arabic edition.