Any economic initiative, plan or measure issued by the
government — and I do not mean this particular government, but any government
in office — will be met by the various parties with rejection and skepticism.
اضافة اعلان
The reason is that the official conviction for the need to
institutionalize economic reform is only pushed for by the government in times
of economic crisis, and while reform headlines and plans would be sound, the
timing of their implementation makes them constantly at risk of rejection.
Privatization is an economic policy that puts the management
of the economic sector in the hands of the private sector, while the state
maintains its regulatory and monitoring role of the economic process, which is
an integral part of a free economy.
However, when
Jordan undertook its privatization strategy it
did so in the aftermath of a severe economic crisis that led to a near collapse
of the national economy in 1989. At the time, one of the components of the
correction agreement with the International Monetary Fund (IMF) was the
acceleration of privatization, with the aim of providing new revenue for the
Treasury, enabling it to fulfil its financial obligations to creditors, at a
time when the state was unable to cover its debts due to the dinar crisis.
Hence, privatization was a way for the Treasury to cover its needs, rather than
develop administration and enhance the various economic activities.
The tax reform that took place after the 2019 law came into
effect was also an important part of the economic reform journey, but,
similarly, it came at a time when the economy was suffering severe growth
slowdown, rising debt and unemployment, and spread of poverty pockets. Hence,
all the returns from the tax reform are not serving the reform journey
adequately, rather it provides additional financial allocations to merely cover
operational costs, making its return on the investment climate poor, similarly
to its returns for the Treasury, as everything gained from it is spent on
salaries and pay rises, without tax hikes being put to use by financing capital
projects in the budget, which would bring additional income for the Treasury in
the future.
Meanwhile, subsidization policies exist in various forms in
all economies around the world, be them free or controlled, and various
governments have adopted the policy of removing subsidies from the majority of
goods and services during the Treasury’s difficult times, hence, the excuses
marketed by governments claiming that the removal of subsidies aims at
directing aid to those who need it on the one hand, and to correct financial
deformities impacting deficit on the other, were not welcomed by the public.
The reason for that is that judgment is reserved for the outcome, and at the
end of the day, the support was lifted, the deficit increased, debt and poverty
are on the rise, and the main and publicized objective of removing lifting
subsidies has not been achieved.
Citizens have no trust in the official economic narrative,
and the former examples diminishes that trust further, while there are many
stories on official economic practices, the purpose of which was learning, and
where the outcomes contradicted the publicized statements, or even opposed
them, after which perpetrators were not held accountable.
Economic reform programs must emanate from the state’s
conviction in reform, development, and advancement, rather than from the
Treasury’s need for cash, or at times of economic crises and decline in state
revenues.
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