To revive economy

There is wide consensus that the national economy is stagnating and the market tempo has slowed down to an alarming level.

Whether this impression is corroborated by accurate data remains to be seen, but the fact that many people feel they can no longer make ends meet because of the high cost of even basic food items and other life necessities is important.

Perception of where the economy stands is directly related to business confidence and needs to be considered in any monetary or economic policy that the government wishes to adopt.

The majority of people know that the government hands are pretty much tied when it comes to energising the market. They know that international monetary institutions, including the IMF and the World Bank, impose draconian fiscal and economic policies in order for the country to qualify for much-needed soft loans on easy terms.

The presence of nearly one-million-and-a-half Syrian refugees on Jordanian soil is increasing financial and economic pressure. 

By and large, the refugees are not productive residents and their upkeep is straining national resources and the ability to improve the standard of living for nationals.

On the other hand, Jordanians also believe that whatever the reasons or justifications for the austerity measures imposed on the people, including leaving the minimum wage where it has been since 2012, is simply suffocating markets and bringing the business cycle to near standstill.

Nowadays shops are nearly empty. Even supermarkets are complaining about slow business.

Sales of most products have dropped to dangerously low levels. And the problem is not limited to luxury goods, but extends to ordinary and necessary products.

The low public and business confidence is indeed worrying. 

While there is not much that the government can do to change the business climate on its own, it can certainly take some remedial measures to uplift the people’s confidence and improve the cycle of trade.

For starters, the government, alongside the private sector, must increase the minimum wage to a meaningful level.

Sure, this would mean additional expenses, but arguably they stand to profit more and compensate for the additional expenses by energising the markets and having them sell more.

The government can generate more income by injecting more liquidity into the market. It might also consider lowering taxes across the board because the money it would lose that way would be more than compensated by it generating more business activity and, as a result, more revenues for its coffers.

Even the high customs on imported products should be revisited because, once again, what the government loses on the one hand will be compensated by the increased volume of trade once goods and services are within the reach of more customers.

Improving the efficiency of the state bureaucracy can also help. As is, there is simply too much red tape and too many public servants for jobs that a far fewer numbers could do better. 

Civil servants’ productivity can be successfully improved with incentives and a more efficient management. Privatisation of some state enterprises should be also considered.

At macro level, the government may consider adopting a stimulus package for the national economy, whose benefits can filter down to the people in due course. 

There is an urgent need for a bold macro policy that can bring a flow of liquidity to the market, over and above providing employment opportunities to the many unemployed or underemployed people.

I am not personally aware of any such macro economic development schemes in the pipeline, neither in the Ghor region nor in the Aqaba economic zone.

Of course, economy experts could suggest even more elaborate schemes to breathe life into the national economy, and they must be invited to reflect on this mission as soon as possible.

One last comment: many people complain about traffic congestion and inefficient means of transportation. Many would-be customers often forego shopping to avoid driving.

Car parking conditions must be relaxed in order to encourage small shops businesses. There are simply too many restrictions on car parking which could be valid from a strictly traffic point of view but end up becoming an impediment to the normal functioning of business activities in Amman.

More relaxed parking rules would certainly promote more business activity. 

To be sure ideas are not exhausted, but they may invite even more promising ideas to revitalise business in the country.