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Review needed

Nov 09,2016 - Last updated at Nov 09,2016

The International Monetary Fund (IMF) has just finished an economic review of the Jordanian economy, following its decision in principle to extend to the country a $700 million fund facility.

The IMF recommendations to Jordan may sound reasonable on paper, but when viewed against the reality in the country and the regional developments, they look ominous.

By and large, the IMF recommendations to the country are draconian and need to be scrutinised not in an academic context, but rather in real terms, measuring also the political and security implications of the IMF prescriptions.

To be sure, some of the IMF “demands” are more than justified; we are talking here about the recommendation to increase sales tax on products such as soft drinks and cigarettes.

The World Health Organisation has been calling for the same, but for a different reason: concern about the health implications of “cheap” soda drinks and tobacco products.

The review of policies on tariffs levied on non-essential goods, including cars, for example, might also be comprehended.

But raising sales taxes on essential, basic, necessities of life, like heating fuel or natural gas for household use would be ignoring the fact that people already face significant hardships, that there are considerable poverty and unemployment rates in the country.

Working to decrease national debt with total disregard for the economic, social and political realities is not wise.

Yes, gross public debt stands at 94 per cent of the country’s GDP, and something needs to be done to bring this debt down, but one problem cannot be solved by creating another.

IMF, it appears, is disregarding Jordan’s commitments under various international human rights conventions, including the International Committee on Economic, Social and Cultural Rights, which has repeatedly warned state parties and international monetary institutions not to violate basic human rights, including economic and social.

 

IMF’s recommendations to Jordan appear to do just that. As such, it would be well advised to review its recommendations taking into account the reality in the country and its treaty obligations.

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