The next economic reform programme

The three-year economic reform programme agreed upon in 2012 with the International Monetary Fund (IMF) came to an end. 

Jordan opted to enter into yet another programme for the coming three years (2016-2018). Such a step, although unnecessary, will be welcome by Jordan’s lenders, donors and investors.

As far as one knows, no subjective evaluation of the finished programme has so far been undertaken.

Such evaluation is needed in order to determine the extent to which the programme was a success, and where it failed.

Some credible entity should be commissioned to conduct a study and tell us to what extent the programme achieved its objectives, whether things went in the direction envisaged by the programme and what planned measures were not taken due to the current difficult circumstances.

The findings of such credible evaluation of the programme are also needed to help formulate the new three-year economic reform programme that will be an extension of the completed programme.

Planners need to build on successes and learn from shortcomings.

The policy now applied by the IMF is that the fund will not dictate programmes to be used by member countries applying for help.

It has to be a national programme produced by the concerned government, but it should, of course, be acceptable to the IMF.

This is a formality. It does not mean that governments can write the programmes that are easy to implement in a comfortable atmosphere.

Governments know what is acceptable to the IMF and what is not. They will try to comply and come up with a programme acceptable to the IMF for its endorsement.

The IMF’s invisible hand will therefore be active in writing the programme, and defining its objectives, timetables and deadlines. If not, the IMF will be a mere false witness with a rubber stamp to approve whatever the concerned government will do, as a false witness may do, which the IMF is not.

The programme will effectively be the result of give-and-take in a hot bargain between the IMF and the government to reach an agreement on practical objectives acceptable to the fund and falling within the ability of the government to achieve.

The fund’s delegation repeatedly indicated that it treated the government of Jordan with utmost flexibility.

This means that the IMF mission would tolerate delay and sometimes outright failures.

It is always ready to consider alternative measures if the government, in view of political considerations, is unable to implement an agreed-upon condition.

The IMF believes that objectives can always be achieved by other means.

Time is short. The government is supposed to finalise and submit a draft programme within a month or so.

One does not know if it did, whether it intends to put the new programme up for public debate and whether it will consult with Parliament members to facilitate the smooth endorsement of the programme.

Observers are anxious to know what the new programme will say about the targeted rate of economic growth, the expected rate of inflation, the estimated budget deficit, the status of public debt, the current account of the balance of payments, business and investment climate, and whether or not the programme will try to tackle poverty and unemployment.

We already have a 10-year vision as a guiding tool, but a vision is something, and actual implementation is something else.