Jordan- Deputy PM says fiscal, economic reform program irrep...| MENAFN.COM

Sunday, 25 September 2022 01:40 GMT

Jordan- Deputy PM says fiscal, economic reform program irreplaceable

(MENAFN- Jordan News Agency) Amman, March 25 (Petra) -- Deputy Prime Minister and Minister of State for Economic Affairs Dr. Jafar Hassan said that the task of the economic team is to implement reforms, programs and projects agreed upon and reflected in the economic growth stimulation plan.

In a press statement, he said the fiscal reform program began with substantial and difficult reforms, instead of putting off the current crisis to future governments and then turns "unsolvable".

Speaking in presence of the Minister of State for Media Affairs, Dr. Mohammad Al-Momani, and a number of economic team ministers, including Samir Murad, Minister of Industry and Trade, Eng. Yarob Al-Qudah, Minister of State for Investment, Mohammed Shehadeh, Minister of State for Investment, Dr. Hassan affirmed the government adopted a financial reform program to counter pile up of public debt in the previous years.

He deemed this situation as "very dangerous, if we let it continue despite all the difficult impacts facing the citizen and the private sector in the near term".

Dr. Hassan said the program is irreplaceable and aims to enable us return to the path of growth, lest we become hostage to regional and international volatilities.

He explained: we are fully aware of the difficulties facing Jordanians and we recognize the importance of exerting every effort to develop solutions and to execute programs that will conduce to security, and we guarantee the citizen concrete results that helps him/her face the tremendous challenges they are facing today.

He added the citizen is suffering a slowdown in growth and opportunities, and production costs pose challenges to productive sectors.

He noted the financial reform program encounters challenges, but it is necessary for the purposes of financial and monetary stability, due to the external challenges facing the national economy for years.

The minister stressed the need for a program parallel to the financial reform program, and ready to be implemented to stimulate growth simultaneous with all available economic reforms, legislations, projects and programs that have a positive impact on the citizens' lives and aim to provide economic opportunities to overcome the existing difficulties.

In terms of the financial reform program, Dr. Hassan said debt increased as a percentage of GDP by about 42 percent, the public debt doubled in the last eight years, and public debt servicing hiked by nearly half a billion dinars at the same period to around 856 million dinars, an increase we pay annually.

He said if the government leaves the situation in this direction without substantial measures through the fiscal reform program, the public debt servicing will increase further over the next few years, especially as financing costs rise.

Dr. Hassan added the rise in public debt and its servicing will be at the expense of the budget capacity to spend on basic services and ongoing expenditures, and its cost on the citizen will be much heftier than it is now.

In this context, he said the fiscal reform program began with substantial and difficult reforms, instead of putting off the current crisis to future governments and then turns "unsolvable".

He noted size of the public debt is triggered by repercussions of the volatilities in the region on the Kingdom's economy, and the ensuing impacts on the cost of energy and the electricity subsidy as gas supplies from Egypt are disrupted, simultaneous with a hike of energy prices globally, and these costs are equivalent to about 18% of the total public debt.

Putting these additional costs aside, the debt ratio would have been around 75 percent of GDP instead of 95 percent of its current level, he explained.

He pointed to other costs Jordan bears, which surpassed the amount of assistance provided to the country triggered by the Syrian refugee crisis and the slow growth of production as regional volatilities in the past seven years ravaged.

Despite these circumstances, he said: "we are able to change course, and we have no choice but to do so, as His Majesty stressed the need for self-reliance in solving our problems.

He added: we are living in a changing and pressing regional environment that is not easy to predict. This country has always built and strengthened its ability to counter crises that have hit the region.

He stressed that the current circumstances entail promoting our potentials so as to solve our problems and make use of our resources. " Jordan has been of a political and economic vision and a regional model in dealing with challenges and changing them into opportunities".

The minister added that over the last 20 years, His Majesty King Abdullah II has been calling for achieving reforms, building productive sectors in line with requirements of the 21st century and shifting from the welfare state to the productive state marked with and prosperous potentials and based on competence and the rule of law. The task of the economic team is to implement reforms, programs and projects that have been discussed over the past years and which have not moved forward, he said, adding that the government has adopted a financial reform program to face the increasing public debt that if left unaddressed endangers our future potential for economic growth.

Despite the difficult impact that may face individuals and the private sector on the short term, the program is unavoidable to enable us to return back to the growth track and be resilient in the face regional and international challenges.

People should feel, at the same time, equality and justice, the minister said, noting that the financial reform should deal harshly with tax evasion that comes at the cost of adhering citizens and businesses.

He also underlined the importance of tax reform that ensures justice and fairness, noting the need to hold a national dialogue in this regard as the issue is related to values, justice, governance and rule of law.

The minister pointed out that the financial reform ,alone, would not realize the desired growth but it ensures protection of sustainable growth opportunities at the medium and long-term.

He also stressed the need to promote economic growth in line with solid financial and monetary policies that empower economic programs.

Time is not on our side, the minister said, adding that people are under financial hardship and the production sectors suffer during this phase, a fact that pushes the economic team to work within a comprehensive program and in line with unified vision so as to effectively realize progress in implementing growth focused reform plans in parallel to the financial reform program that has been undertaken.

Jordan Economic Growth Plan 2018-2022 was prepared by the economic policies council last year and has been adopted by the government in line with Jordan's vision 2025, Royal designation letters, and the National Strategy for Human Resources Development, the minister noted.

He said the objective of the plan is to focus efforts on the growth enhancing programs in the pipeline, which could have the most impact in stimulating growth and with the aim of doubling growth in the next five years.

He noted the Jordan Growth Plan interventions include reforms in the business environment, facilitating and simplifying procedures, amending and introducing a number of economic legislations, implementing sectoral programs and ventures, providing financing support for small and medium enterprises (SMEs), boosting entrepreneurship and increasing employment opportunities.

To ensure implementation of the plan, Dr. Hassan said a detailed action plan and dashboard for monitoring and delivery as well as a monthly calendar of milestones has been developed which sets necessary indicators and procedures required from ministries and institutions in a bid to implement this package and to ensure challenges that may arise are addressed by the ministerial economic team in a timely manner.

He said this plan is linked to reforms, and has four major pillars: developing legislation, providing financing, tackling production costs and boosting government procedures. On legislation, he said a large part of which is currently discussed or scheduled to be sent to the House of Parliament at its current session, including the Transferable Funds Law, the Bankruptcy and Liquidation Law, the Labor Law, the Customs Law, and the Medical Accountability Law, some of which will have a significant impact in supporting small and medium enterprises (SMEs), in facilitating access to appropriate financing, attracting investment, improving the business environment, and directly contributing to stimulating growth and employment.

He said an amended draft of the Income Tax Law will be prepared and passed to the House of Parliament in the coming period, in addition to the preparation of other laws that will contribute to improving the quality of vocational training.

He affirmed the laws to be endorsed this year must serve us in the long run without change to ensure legislation stability and predictability for business.

He explained a significant portion of the costs of projects and programs as per the growth stimulus plan depends on investment and partnership with the private sector, and "this necessarily requires working on the appropriate mechanisms to stimulate and facilitate such funding,".

He called for benefiting from tools available at a large scale, especially through the Jordanian Investment Fund law in partnership with local, Arab and international partners, in addition to assessing the Public Private partnership law and amending it to unleash investment potential in several sectors including transport, health, and education.

Dr. Hassan said costs of production and the capability to compete are also essential factors to execute these projects to be feasible, along ensuring funding, adding several employment policies need to be reviewed to match today's challenges, as well as energy costs for productive sectors, deemed as highly significant for many sectors, as they will be reviewed.

He announced the government has also embarked on reviewing the Kingdom's business ties with partners in a bid to optimize our gains and the interest of our productive sectors, to build upon His Majesty's efforts and the new opportunities he launches with countries in Asia and Africa, and to make better use of trade agreements penned with the United States, the European Union and Canada.

He said: We have many opportunities to benefit more from the sectors of energy, mining, transport, water, health and tourism to lure investment and to carry out vital projects that stimulate growth and employment and increase competitiveness of our country.

He noted the government's economic team is currently setting up a framework of these projects to attract investment, especially that there is interest regionally, and globally if we provide the appropriate conditions and the environment necessary to achieve this goal.

He affirmed the fourth pillar of this plan tackles development of procedures and regulations in place and the need to reform the public sector to act as the crucial partner to private sector and to improve the conditions for doing business in the Kingdom Regarding measures taken by the government having a direct impact on the private sector financially, Dr. Hassan said they will be assessed periodically by the Ministry of Finance and the economic team.

He concluded: we are all responsible as an economic team and government for our actions and policies, and citizens must be able to know and understand precisely what we are committed to and what to expect of our plans to boost growth, as well as the impact of all programs on their lives in the coming years.

25/3/2018 - 10:13:36 PM


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