Despite the belief of some observers that Jordan’s is a rentier or semi-rentier
economy, empirical data suggests that Jordan no longer fits either of the two
definitions.
اضافة اعلان
Let us start with
the obvious. Since the 1950s, foreign aid has declined significantly as a
percentage of the domestic revenue and public expenditure. In the 1950s and
1960s, foreign aid reached around 60 percent of the domestic revenue. In the
last two decades, it decreased as low as 6 and as high as 29 percent of
domestic revenue, averaging 13 percent (2000–2022), depending on whether there
is a crisis in the region.
Since the 1950s,
the trend has been very clear: in every crisis year, foreign aid to Jordan will
spike, then subside to its “normal” levels, keeping the trend of systematic and
linear decline.
For example, in
1968, after the 1967 war, external grants were 60 percent of the domestic
revenue, in 1975, after the 1973 war, it was 55 percent, in 1979, after the
Camp David accords between Israel and Egypt and the ensuing retaliatory Baghdad
summit, it was 53 percent. In 1989 after the protest action, it was 31 percent,
then declined to an average of 12 percent between 1991–2002, and jumped to 29
percent in 2003 after the invasion of Iraq.
A more assertive government action on facilitating and easing investment tracks for Jordanian capital is long overdue.
Similar modest
spikes took place in 2011, in response to regional protest movements, to 22
percent, and in 2014 to 17 percent as a result of war or terrorism in Syria and
Iraq. In the 2022 budget, the percentage of external grants to domestic revenue
was 10 percent.
This set of
empirical evidence challenges the often-cited assertion that Jordan’s economy
is rentier or semi-rentier.
The second set of
evidence comes from the data published on the official website of the
Government Investments Management Company (GIMC). The total government-owned
capital in the government-owned companies under GIMC is nearly JD1.05 billion,
which makes 49 percent of the total capital of the 35 companies under GIMC,
around 3 percent of the GDP, and nearly 13 percent of the domestic revenue.
The data presented
here suggests that it is erroneous to call Jordan a rentier economy. Jordanians
are funding 90 percent of the public budget.
Today, with the
new economic vision 2033, we need to make sure that tax burden is equitably
distributed, with an eye on fast and sustainable economic growth.
It is perplexing to
see the economies of Saudi Arabia, Egypt, and Israel growing by substantial
percentages while we are stagnating, our employment is on the rise and a
majority of our youth is eager to leave the country.
A more assertive
government action on facilitating and easing investment tracks for Jordanian
capital is long overdue. It is about time we move beyond business as usual in
these times of “compete or vanish”.
Fares Braizat is chairman of NAMA Strategic Intelligence
Solutions [email protected]
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