In this phase of the pandemic, the government’s priorities
should focus on three aspects: providing salaries and securing debt service
amounts, providing enough allocations to support the healthcare sector, and
sustaining finances to cover the expenditures of various public institutions.
اضافة اعلان
These three priorities cannot be achieved through
self-reliance. The money to cover them cannot be drawn directly from the
Treasury due to the fact that the pre-grant budget already suffers from a
deficit that exceeds JD2 billion, and the government needs some JD580 million
every month to finance its spending.
Meanwhile, the government’s monthly revenue — drawn from
taxes, fees, and customs — does not exceed JD430 million. The deficit is
usually covered through domestic and foreign debts. This is a decade-long
monetary mechanism, where the Treasury resorts to imposing new fees and taxes
or borrowing to cover such differences.
Because of COVID-19, and its financial impact on various
public and private sectors, as well as the need for additional funds to secure
the stability of the national economy, the government opted to borrow to
overcome the financial repercussions of the pandemic.
In total, the government’s 2020 direct loans exceeded JD2.2
billion, including JD1.5 billion in foreign loans in the form of Eurobonds. The
rest was secured from domestic sources through bonds.
Conditions may not be much different this year due to delays
in vaccine distribution and a possible return of partial and full lockdowns,
which means that the Treasury will lose revenues estimated in the 2021
government budget. At the same time, financial burdens are accumulating day by
day on a wide variety of individuals and workers in the private sector.
All of these factors have forced the government to think
about possible procedures to protect these sectors through programs within the
state’s financial means.
The procedures that the government announced last week are
not aimed at stimulating the economy or providing welfare, yet they can be
described as an attempt to take on some of the financial burdens of those hit
hardest by the pandemic.
The Treasury does not have the additional funds to spend on
any items that are not mentioned in the budget, and all it has managed to
provide is no more than JD208 million, part of which was secured through a
foreign grant.
The COVID-19 crisis has greatly affected the national
economy, which is already burdened, and achieving growth again will be governed
by the developments of the pandemic.
We have to count on having access to vaccines, especially
since inoculation and a commitment to precautionary and safety measures are the
two main factors in guaranteeing the normalization of economic activities.
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