A closer examination of recent and not-so-recent publications from
the IMF and World Bank reveals statements like "Jordan's economic
transformation remains contingent on identifying opportunities to expand the
economy's outward orientation and to implement reforms needed to promote
private sector-led growth and job creation." These statements serve as
policy guidelines and are deeply ingrained in the current Jordanian development
paradigm. However, breaking down these components shows the inherent problems with
such vague rhetoric.
اضافة اعلان
Does
"expanding the economy's outward orientation" imply that Jordan
should become even more open? The trade (exports plus imports) to GDP ratio
already exceeds 85 percent; should it be increased further? But why? The annual
trade deficit is over US$12 billion in a US$48 billion economy. Should Jordan
intentionally increase this deficit? How would it address the growing trade
deficit? It's clear that more openness is not the solution.
Israeli hegemonies in Gaza create uncertainty that can negatively impact tourism, further reduce remittances, and discourage FDI inflow into Jordan. Relying on these external factors without developing the domestic sector is a dangerous approach. Successful economies like South Korea, the UK, the USA, and China have all thrived by implementing industrial policies and government-led growth.
What about
"private sector-led growth"? Does it mean that the private sector
alone will be responsible for growth, while the government remains a bystander
or merely changes legislation without taking substantial action? Such a belief
is naïve. It's a misconception to think that recovery depends solely on foreign
direct investment (FDI), tourism revenue, and remittances, none of which are
internally generated. This reliance on external sources is risky, especially in
an unstable regional environment.
Israeli hegemonies in Gaza create uncertainty that can negatively
impact tourism
The
Israeli hegemonies in Gaza create uncertainty that can negatively impact
tourism, further reduce remittances, and discourage FDI inflow into Jordan.
Relying on these external factors without developing the domestic sector is a
dangerous approach. Successful economies like South Korea, the UK, the USA, and
China have all thrived by implementing industrial policies and government-led
growth.
The World Bank and IMF seem far removed from reality
The World Bank and the IMF seem far removed from reality.
Policymakers should not blindly adopt this paradigm. Instead, they should take
it with a grain of salt and avoid falling for the lemonade they're selling.
PS: I apologize for not writing this
piece exclusively about Gaza, and I am sorry that I talk about economics while
my brethren and loved ones are in harm's way a few hundred miles away. It is
not because of insensitivity but because the heart hurts—I wish them victory.
Yusuf Mansur is CEO of the Envision Consulting Group and former minister of state for economic affairs.
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