Last week, the government adopted a financial plan, valued
at JD448 million, with the aim of stimulating the economy and mitigating the
burdens of impacted social segments and sectors.
اضافة اعلان
The six-pillared plan is essentially an attempt to catch our
breath following vicious COVID-19 wave that aggravated economic and social
crises.
Weeks after its formation, Prime Minister Bisher Khasawneh’s
government offered a stimulus package, in a continuation of the approach
followed by the previous government to mitigate the impacts of the pandemic.
Everyone was hopeful that we were entering a stage of
economic recovery that would spare the Treasury further support payments and
diminished revenue, but the country was hit with a second, more vicious wave,
forcing the government to impose strict health measures at the expense of
economic priorities, which, in turn, led to the decline of economic and service
sectors, and increased burdens on vulnerable segments of the society.
Under the second plan, the government will pump some JD240
million into the market, consisting of arrears for some sectors, tax refunds,
and expropriation compensations. On top of this, JD208 million will be provided
as direct financial assistance programs for impacted segments, and
approximately 15,000 across several sectors, to alleviate the impact of
increasing unemployment among the youth.
The government pledged that these expenses would not
increase public debt, which has reached 109 percent of GDP. This does not
necessarily mean that the government will not resort to additional loans to
cover the budget deficit and support the health emergency budget.
The latest World Bank projections on the situation in Jordan
remain, to an extent, cautiously optimistic, despite the dangers of the rising
debt. The World Bank predicted that Jordan would achieve 1.4 percent growth in
the current year, after last year’s downturn, estimated at 1.8 percent.
However, everything hinges on the situation of the pandemic
weeks from now. The government is hoping to contain the current wave by early
summer, coinciding with a wide-scale vaccination campaign, allowing the opening
of all sectors and the return of the usual economic activity.
If achieved, this optimistic scenario would contribute to
putting an end to a series of losses in the second half of 2021, turning the
economic wheel to compensate for losses in service sectors such as tourism and
hotels, create new jobs, and, most importantly, increase the Treasury’s tax
returns.
This does not necessarily mean the end of the crisis, rather
a new chapter of economic challenges and their social repercussions.
For example, social protection programs will remain an
urgent need in light of the deteriorating economic situation of vulnerable
segments, and unemployment will top the national agenda.
Due to their risks for social stability, these ramifications
require the consideration of deeper and more comprehensive economic programs
for next year, as well as policies that exceed emergency programs and ensure
stable economic returns on government spending, so that debts would not become
unbearable in the future.
A few weeks ago, the government promised to launch an
economic plan for the upcoming stage, which is no doubt a difficult task, but
it is a challenge that must be faced in cooperation with the private sector and
experts, including politicians, economists, think tanks, and research centers,
to come up with a thorough understanding of the post-COVID phase, which gains
consensus.
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