Make Do

By: Jumana Ghunaimat

تم نشره في Wed 15 June / Jun 2016. 10:05 PM
  • Jumana Ghunaimat

Finally, the debate has been settled as to whether or not the government is going to raise electricity prices; instructions to not raise them came from the decision maker, to look for alternative domestic solutions to meet the terms of the International Monetary Fund (IMF)’s new 2017-2020 economic reformation programme.

The instructions, as well as the totality of the message, being clear; the government has begun look through what they have to find a source that would return the needed income in a way that does not incur further weight on citizens.

Subsequently, this means that water costs will also remain as-is, for the meantime at least.

There is still much to be done. The prerequisites of the finalised IMF agreement are not simple. Revenue has to be increased by about JOD150 million, which is what the government is seeking to achieve while leaving people’s already difficult lives intact. However, the government is considering raising taxes on certain types of alcohol, and cigarettes as well, by extents that do not break the anti-smuggling equation, meaning; by extents that will bring revenue to the treasury, but with control over smuggling at the same time.

Accordingly, the government has to instrument an effective plan to meet the difficult conditions of the IMF; stabilising debt-to-GDP rates at an economically feasible level, so that the rate does not take another leap this year, at least. While it is doable, it is not at all an easily achievable result.

On the other hand, the higher oil prices go worldwide, the more pressing the problem of electricity prices becomes. Which is why we need to develop a domestic power generating infrastructure that would lower costs, like shale oil power generation agreements, for example, last of which were signed a while ago with the Manaseer group. Next to that, the sector at self has to be massively expanded, to allow for diversification, and increasing costs, to alleviate accumulative pressures on the power and electricity sector.

For now, oil prices hovering about USD50 per barrel means that the Treasury will not be incurring losses on the account of the National Electricity company, which meets one of the IMF conditions that incurred losses do not culminate any further than it has already over the years, amount to around JOD5 billion, so far; a cost bore by the economy ever since the Egyptian gas pipeline was interrupted in a time when oil prices worldwide took sky rocketing leaps. Notably, for every dollar raised on the price per barrel of oil, the Treasury incurs USD17 million.

Even more challenging, is the government’s effort to lower public debt to GDP rate to 77 from 93 per cent, throughout the years of the upcoming programme. Still, the Fund sets their conditions, but they do not help much in terms of meeting them. Our previous experience with the IMF over the last few years, indicate their measures and approaches do not necessarily lead to attaining target results and objectives. Even in other countries; what the IMF experts theorise may not be correct or guaranteed success, and Greece serves an evident example of the Fund’s failure to extract the country from its crisis, in spite of all that was said and done.

Hence, the importance and vitality of domestic national planning, over foreign recipes for our crises, of which —no matter how knowledgeable— they know very little about, in terms of domestic conditions and givens. The fact remains that should any minister, with full awareness of our Country’s situation and dilemma, as well as the vigour and intention for work, can indeed make positive differences, regardless of the conditions; should there be will to do so.

A new agreement with the IMF is inevitable, sooner or later. But it is not to our interest to rely on their readied-out recipes to fix or alleviate our problems. Addressing our crises requires innovative domestic ideas, coupled with ministerial capacities to strategically develop their sectors.

Execution is paramount; that imminent concerns are immediately addressed, and not procrastinated. This, however strange; does seem to appeal to Premier Dr Hani Mulqi’s likings. He refused requests made by members of the Cabinet to develop their ministerial strategies before execution. Mulqi’s response was clear: “Make do with what you have, and that is all that is needed of you”.