A Future Jordan - نحن الأردن

Plans for reform in Jordan must overcome scepticism BY SHARMILA DEVI - The financial Times

Plans for reform in Jordan must overcome scepticism
By Sharmila Devi
THE FINANCIAL TIMES
November 3 2005 16:51

Amman is bustling with the human overspill from neighbouring Iraq, with burly western security contractors, aid workers and Iraqi exiles filling the hotels and shopping malls.
Gulf investors with oil money to burn, and other Arabs seeking a safe haven out of troubled Lebanon, Syria and elsewhere in the region are rushing to capitalise on cheap property prices and a booming stock market. Jordan is again making the most out of its historic role as a safe buffer state in a bad neighbourhood.

Beneath the glitz and impressive growth figures lie long-simmering problems for the energy-scarce country of less than 6m people – a worrisome budget deficit, high poverty levels, widespread dissatisfaction over close relations with Washington and popular empathy with the neighbouring Palestinians.

The government is soon due to reveal its “National Agenda” – a 10-year plan of ambitious political and economic reforms that have been talked about since King Abdullah came to the throne in 1999. Compiled by officials from both the private and public sectors and civil society, many Jordanians are already cynical about the exercise, given the opposition to change by many in the rich, ruling elite.

Marwan Muasher, deputy prime minister who headed the agenda’s steering committee, acknowledges the challenge. “Most of the public started being sceptical about this, not because they’re not with reform but because they’re not sure the government means what it says and they’re not sure there’s a policy commitment to this programme,” he said.

“The National Agenda is an effort that will show people that yes, we will pass through two very difficult years but that we have a well-thought out, measurable programme that would not just get rid of the chronic problems that we have in our budget but result in a doubling of people’s incomes in 10 years.”

He said that for the first time in the Arab world, reform would be tied to performance indicators, a timeframe and budgetary allocations. Reports would be published on the reforms, which make an impressive list. They include a long-discussed electoral law to introduce party lists as part of an effort to lessen tribalism and patronage in political life, remove all legal discrimination against women, bring in universal health insurance and cut the unemployment rate by about half to 6.8 per cent in the next 10 years. Singapore and Ireland have been studied as role models, said Mr Muasher.

But critics say parliament retains the power to dilute any changes, even if the king continues regulary to postpone its sessions. They say the intelligence services provide a safe and secure environment, but at the expense of stifling outspokenness in a country where much of the press imposes self-censorship on issues such as the royal family, the ruling classes or corruption.

“The king is trying to bring new blood into the government and that’s to be welcomed but the old guard is a real monster and it’s hard to get rid of it,” said one analyst. “All this talk of reform is very positive but it’s going to take a lot of time.”

On the economic front, Jordanians do speak of a sense of optimism after having weathered regional shocks such as the Palestinian intifada and the 2003 Iraq war. Gross domestic product is set to grow by more than 7 per cent again this year after registering growth of 7.5 per cent in 2004, up from only 4 per cent the previous year.

But high oil prices, coupled with the receipt of only around half the fuel subsidies forecast from rich Gulf states, has forced the government to raise fuel prices twice this year. The budget deficit risks overshooting the target 3.3 per cent of GDP to more than 8 per cent, say analysts.

Umayya Toukan, governor of the Central Bank of Jordan, said he was confident that the deficit would be controlled through a combination of measures. These include a phasing out of fuel subsidies by 2007, fiscal reforms and rising revenue collection and accelerated privatisation efforts.

For this year, he spoke of an inflation rate of between 3 and 4 per cent after having managed to keep it between 2 and 3 per cent for the past two years.

Mr Toukan said reforms would help to bring down the jobless rate.

posted by Ashraf Zeitoon @ 5:45 AM