It is not easy for Jordan to get additional support from
the International Monetary Fund (IMF) under the current difficult conditions
brought about by the COVID-19 pandemic, throwing off the budget projections of
last year, which has seen a contraction of 1.9 percent.
اضافة اعلان
The second review of the IMF mission resulted in the
approval of granting Jordan further facilitations, valued at $200 million. It
also sends a positive message to donors and the international community on the
necessity of supporting the Kingdom, to enable it to move forward with the
correctional program, as agreed, despite the exceptional difficulties and
burdens caused by the pandemic.
There is no doubt that a political component, as well as
Jordan’s ties, played a part in enhancing the support of international
institutions to the Kingdom, the foremost of which is the IMF.
But the government also played a convincing part for the
international community of being adamant on moving ahead with economic reforms
agreed upon with the fund, as the second review revealed that the Kingdom is
still on a steady pace in the achievement of the structural program, covering
the duration between 2020 and 2021.
It also showed strong progress in key reforms, the most
important of which the is tax reform that resulted in significant figures in
terms of combating tax evasion and the expanding the taxpayer base.
This resulted in unprecedented growth in the Treasury’s
tax revenues, even during the pandemic and despite its economic repercussions
on the various sectors, which impressed the IMF mission. This has led them to
push the taxation success story on the rest of the financial institutions,
topped by the customs department, which will probably undergo drastic
structural reform in the coming weeks.
The second review provided cover for the government to
get financial and administrative support from the IMF, in order to face the
consequences of the pandemic, particularly as it pertains to the protection of
social segments most affected by the pandemic, which is the cause for the
government’s increased spending on this issue, with support from the IMF.
The IMF usually rejects any new economic measure, unless
it has allocations in the budget, but the fund and the government were on the
same page regarding the prioritizing economic policy to deal with the current
alarming COVID-19 wave and mitigating its social and economic impacts.
The matter is not limited to increasing the
appropriations of social protection via the IMF. The success of the second
review provided the government with studied measures for its plan to confront
the effects of the pandemic, by setting financial objectives for 2021 that seek
to support economic recovery and job creation. Furthermore, they ensure more room
for increasing social protection spending, while maintaining Jordan’s
debt-bearing capacity and remaining compliant with the Kingdom’s external
financial obligations without deferment or default, particularly since Jordan
was able last year, despite all challenges, to fully pay its domestic and
foreign financial obligations without delay.
In my opinion, the most important thing to come out of
the fund’s second review is its message to the international donor community
and to Jordan’s allies of the necessity to continue supporting Jordan and
provide it with the financial assistance it needs to face the various
pressures, up until reaching the recovery stage and returning to positive
growth.
Foreign donor assistance, including the provision of
vaccines and supporting the various reform priorities agreed upon in the
program, remain critical for aiding Jordan in overcoming the pandemic and
moving towards an economically safe state.
Those who believe that the Jordanian economy is strong
enough to walk a solo path without foreign aid in general, and without IMF
support in particular, are mistaken, as the international community cannot
provide any form of assistance, including concessional loans, without the
blessing of the fund.
Hence, those who do not like Jordan’s relationship with
the fund are welcome to offer solutions for securing the necessary finances to
fund the state’s various expenses first, and then they are free to criticize as
they will.
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