Bassem Awadallah as he reminds us of history

تم نشره في Sun 18 January / Jan 2015. 10:56 AM

By Jumana Ghunaimat

On his Facebook page, controversial former minister Bassem Awadallah, said only half of what is there to say.

Awadallah wrote reminiscing the year of the crisis1989; considering that history must be revisited as a reminder that Jordan suffered an both an economic and a financial crisis in that year, one of the most important indicators of which was the high budget deficit before aid to more than 20% of GDP, and the increasing size of debt to reach more than 190% of GDP.

Awadallah, who left the local political scene years ago after the last position he held as Royal Court chief, adds that at the time the government was unable to repay the debt. Accompanied by a significant rise in inflation to 25.7%, then the Jordanian dinar exchange rate against the US dollar collapsed from US$2.96 in 1987, to US$1.47 in 1991.

Following the crisis, there was a significant deterioration in the central bank's reserves of foreign currency, and a contraction in real GDP of more than 13%, coupled with a rise in unemployment to about 20%, and poverty rose more than 3% in 1987, to 14% in 1992.

As a result of this crisis, the Jordanian government was forced, then, to turn to the International Monetary Fund (IUMF) and the World Bank, and the sign the economic structural stabilization and correction programs, in order to get quick funding to rescue the economy from collapse, by obtaining assurances from the IMF for creditors, in both the London and Paris clubs, that confirms Jordan's ability to repay its foreign debt, and thus enable it to obtain financial loans and technical assistance.

After the 1989 crisis, which Jordanians remember with anxiety, the Jordanian government approved the seven economic reform programs in collaboration with the IMF and the World Bank, which included financial, monetary, trade policy, regulatory and legislative reforms, and began encouraging private sector development, and the implementation of the privatization strategy.

After six years of that crisis, specifically in 1996, the privatization program was launched, and the privatization strategy that was presented to Parliament was adopted. The privatization law was issued to regulate the process, and to identify the sectors and companies of the priority allocation.

What is it that former minister Awadallah is trying to say, even between the lines?

Perhaps the most importantly bit is his reference to the start of the privatization process in the same year; as if he is exonerating himself from a charge that has followed him for long, as he was the one who sold the public sector and privatized it. He implies, even implicitly, that the privatization approach began in the era of officials who are today criticizing it, to absolve themselves of it, and throw charges at others.

But what Awadallah did not say is comparing what happened in that period as a result of corruption and mismanagement, and what is being repeated today even if through a different template, right down to a similarity in most of the financial indicators of our time with what it was in the past.

Awadallah mentions what happened, with all its cruelty, as if he is warning of a recurrent crisis. The deficit in state budget today before the grants is 22.7%, and 6.5% of GDP; while the public debt is approaching 90% of GDP, reaching record levels in absolute terms, closing to 21 billion dinars by the end of 2015.

Also, unemployment numbers are very high, and their danger is growing in light of changing popular mood and the rise in awareness. While poverty plagues our society, amid official's inability to lift the poor from the cycle of destitution that continues to pull them down.

Had Awadallah finished his talk - and did not stop at describing what happened two decades ago – maybe he would have said a lot, and gave defences on other issues that Jordanians linked to him personally; including the rise in debt to the current disturbing and dangerous levels!



This article is an edited translation from the Arabic edition