Top economic events in 2018 in Jordan

A Pythagorean would love the holiest of all numbers, and that is 10. You can draw four rows of one, two, three and four and the total would be 10, which can multiply or degrade numbers quantumly. I love numbers and the tricks associated with them. Here, I shall use the holy 10 to count mostly unholy economic developments and events in Jordan during the year 2018. 

One of these developments was related to the Income Tax Law, which symbolised the Jordanian people’s struggle to convince the government that they have reached the upper limit of their tax curves. In a way, the debate around the law led indirectly to the fall of the government of former prime minister Hani Mulki, and the induction of Prime Minister Omar Razzaz’s government. 

2018 witnessed a continuation of the economic slowdown.  Despite the predictions of a higher growth, the Jordanian economy only grew by 2 per cent or less, which means a decrease in welfare as measured by per capita income. In conjunction, unemployment, poverty, government deficit and the debt-to-GDP ratio underwent unhealthy increases. 

The year 2018 witnessed the Dead Sea tragedy when, on October 25, 2018, Jordanians were shocked by the news of the premature death of 21 people, mostly children, when a flashflood swept them into the Dead Sea. The fatal accident aroused public interest in the performance of the public sector and the expediency with which it responds to emergencies. 

Public protests were also evident in 2018. Evaluation of the ongoing weekly protests in Amman near the Fourth Circle and in certain governorates varies in terms of their justification and motives. Yet, they seem to acquire momentum not only from domestic sources, but from shady parties outside Jordan. Nonetheless, their raison d’etre is the current economic condition. 

The arraignment of Awni Mutee was another key event in 2018 as Mutee became the eye of the storm against corruption. His case is a cause of bewilderment as to its size, amounts involved, protraction and the number of officials who had their pots sweetened by Mutee. It will be a big plus for the government if it leads to the arraignment of others involved in other cases.

Another key economic development is the drafting of the 2019 state budget draft law, which is currently being deliberated on in the Lower House. The bill attempts to embody government policies into it. Twenty-nine autonomous entities were moved from the aggregate budget law of independent entities to the state budget. Yet, some analysts believe expected revenues are exaggerated, and expenditures could be cut by JD500 million.

In 2018, the Central Bank of Jordan increased interest rates four times in pursuit of similar increases in the Federal Reserve’s four seasonal increases. Such an increase in cost of credit keeps a tight cap on money supply and prevents dollarisation, but burdens borrowers whose net profits and incomes are declining in nominal and real values.

The announcement that Egyptian gas will be flowing again is morale-lifting news to Jordanians that was announced in 2018.

After the ratification of the infamous amended tax law of 2018, the stock exchange index dropped 8 per cent in a few days. The response by the government to accept a fixed fee formula helped restore most of the losses, following an upheaval in the stock market.

The year 2018 witnessed the announcement of the Razzaz Renaissance Plan. 

The premier explained in a series of lectures his reform package, with a general two-year executive plan. It was met with scepticism by the Jordanian people who are strategies-fatigued.  I say that the old English proverb “The proof of the pudding is in the eating” will have to hold for the time being.

Let us pray for a unified concerted societal effort to face off the 2019 predicted worldwide worsening economic conditions.