A New Discourse?!

By: Jumana Ghunaimat

تم نشره في Sat 30 April / Apr 2016. 12:00 AM
  • Jumana Ghunaimat

The Minister of Finance, Omar Malhas, admitted to the International Monetary Fund (IMF) having expressed doubts on some of the figures in this year’s budget; particularly revenues, which indicates a healthy discourse, in terms of transparency and honesty with the public, is being incorporated; contrary to dominant politics up until this announcement was made, which was typically based around hiding information and handling IMF denotations as government secrets.

Doubts on official numbers, in many fields and aspects, notwithstanding those of the general budget, is nothing new. The general public financial figures, when analysed, have always been faced with uncertainty by local experts; and this is not exclusive to revenue, but to expenditures that have broken the seal and incurred more deficits on the final balance.

The upcoming years will not be easy, Malhas uncovered; given the “Fund” has outlined difficult terms and conditions to the initiation of the new programme with the Kingdom, encouraged by relative success, on the government’s part, in lightening up some of these difficult terms; for instance, the requisite general public debt to domestic gross product index.

Public debt, according to the Finance Ministry periodical, January issue, touches at JOD24.9 billion, or 93.6 per cent of Jordan’s Gross Domestic Product (GDP) for 2015; in the very beginning of the negotiations, the IMF required the rate to be declined to 70 per cent before the end of the current year. But, with official doubt on the attainability of the condition, the Fund’s team assigned their “acceptable” 80 per cent.

However, “the attainment of the “lowered rate is surrounded with much doubt; given the standing financial situation; how can the debt ratio be driven down with an expected increase in loans to roughly USD2 billion?

Minister Malhas’ announcements are comforting, in regards to being honest, but their accuracy or applicability are not necessarily so. In terms of other aspects, particularly driving down public debt, it is farfetched, and for many reasons: they are the lacking of both; teamwork and national agendas that are based on domestic drivers of economic reformation.

The Minister reassures the condition is indeed attainable, which requires of him detailed elaboration to back this claim; at least reassure the public that driving down indebtedness ratios, should it at all be attainable, will not be on their expense; particularly with general domestic and regional conditions not so bright in terms of the enablement of exceptional growth rates for Jordan’s national economy that is, according to estimates Malhas himself, not expected to exceed 2.2 per cent, and will probably be lower than IMF estimates at 2.4 per cent.

Today, the IMF efforts to evaluate and criticise the government’s performance, in light of results off the recently concluded economic reformation programme, which did not achieve its goals. The subsequent question now would be: was the IMF not a part of the execution of these programmes over the years? Did the Fund not supervise their implementation in detail?! The importance of this question arises from Jordan’s pressing need, for a fact, to sign the new arrangement with the international organisation for the years 2017-2020. Thus, the IMF are subsequently required to revaluate their view of the Jordanian situation in this regard, as does the government!

Another condition placed by the IMF, has to do with increasing government revenue by 1-2 per cent. And although the government has always resolved to this policy with reinterring decisions, this is negative now on two comprehensive levels; one is that this cannot be attained without inflicting tremendous damage to society both economically and socially, and the other is in the fact that the Fund has failed to reconstruct the compatibility of proposed “reformation” programmes to domestic and regional variables.

What is required of the Jordanian negotiator now is to arrive with the Fund at attainable, applicable, realistic terms. Because even though the current government is conducting the negotiation for the new economic reformation programme, fact is that it will not be the government responsible for carrying it out and executing its measures by the dawn of 2017; it will be upon the shoulders of the government succeeding Dr Nsoor’s, or the transitional one’s, to see it through.

Comment