Although Jordan has achieved in recent years a measure of monetary and fiscal stability, built comfortable reserves, and strengthened its ability to meet its obligations to creditors, these gains have not come without clear economic and social costs. The IMF’s restructuring programs, and the accompanying fiscal austerity policies, have given the economy confidence signals and contributed to stabilizing macro indicators, but they have left a harsh social impact on the living conditions of wide segments of people.
اضافة اعلان
These policies were reflected on the ground only slowly in job opportunities. Unemployment and poverty remained at high levels, especially among youth and women, and the limited positive economic growth did not turn into sufficient or stable jobs. Wages in the public and private sectors move much more slowly than the rise in the cost of living, which means a continuous erosion of households’ purchasing power and a decline in the quality of daily life.
In return, the informal economy and informal work expanded—the hidden face of the social crisis. There are tens of thousands of male and female workers outside the umbrellas of social protections and labor standards, which will create future burdens on state institutions and a loss of tax revenues that could have contributed to improving services.
The picture was complicated further by the rise in interest rates. Small and medium-sized enterprises, the backbone of employment in any economy, face stifling financing costs that reduce investment appetite and postpone expansion and job creation, which puts pressure on institutional as well as household consumption and slows the economic cycle in local markets.
In the background, public debt continues to rise, pressing on the fiscal space necessary for spending on various development paths. The tax system leans more toward indirect taxes that burden those with limited income, while reform steps such as e-invoicing are important but not sufficient on their own, without redirecting the tax burden toward a fairer and more efficient base.
Nevertheless, a reality cannot be overlooked, Jordan is compelled to deal with the International Monetary Fund to obtain “certificates” that open the doors to grants and loans on concessional terms. But this path, even if it ensures stability at the level of some macroeconomic indicators, comes with social costs that should be reduced as much as possible. What is required is to improve the terms of the agreements through prior social impact assessments, and to adopt success indicators that do not stop at some financial and monetary indicators, but also include job creation and the reduction of social inequality.
We also need to redirect investment toward sectors capable of generating decent jobs, such as renewable energy, water, waste management, sustainable tourism, and light industries, in parallel with closing the skills gaps that prevent Jordanians from accessing these opportunities. On the fiscal side, fair tax reform becomes indispensable, moving toward reducing reliance on indirect taxes, expanding income and profit taxes on upper class, and tightening the fight against tax evasion.
