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Success of new national economic plan ‘depends on efficient execution’ — experts

By Dana Al Emam - May 10,2017 - Last updated at May 10,2017

AMMAN — The efficiency of the newly endorsed five-year plan to stimulate economic growth is highly dependent on proper implementation and close follow-up, pundits said on Tuesday.

In separate phone interviews with The Jordan Times, economists and members of the business community highlighted the need for all national economic plans to function in harmony, including the new plan, the Jordan Vision 2025 and the economic correction plan, implemented in cooperation with the International Monetary Fund.

The new plan aims at reviving the momentum of the economic growth and benefit from the available development capabilities in the Kingdom through creating sectoral economic and financial programmes to frame the visions and policies related to each sector.

The 2018-2022 plan targets 19 sectors through 95 economic reform procedures and 85 government projects at a cost of JD6.9 billion and 27 private sector investment opportunities worth JD9.5 billion.

The blueprint also seeks placing Jordan on the path of sustainable development, to build a strong economy that is able to remain resilient against regional and international challenges and minimise dependence on foreign support by expanding and multiplying economic and investment opportunities.

The plan is also designed to generate jobs and develop human resources, in addition to qualifying governmental institutions to provide quality services.  

His Majesty King Abdullah late last week chaired a meeting of the Economic Policies Council to launch the plan, which the Cabinet approved on the same day.

Jordan Chamber of Commerce’s President Nael Kabariti, who took part in the drafting of the plan, said the initiative proposes a strong partnership between the private and public sectors, in a bid to boost the economic performance in the short, medium and long terms.

The difference between this plan and other previous ones lies in its realistic approach in addressing pressing economic challenges, Kabariti said, noting that the plan will be coupled with legislative amendments to address day-to-day challenges.

“Any shortcoming in the implementation of what has been agreed upon in the blueprint will diminish the trust in this programme,” he told The Jordan Times.    

Some of these regulatory reforms have been already passed this year and others are in the making, including a law unifying the monitoring and inspection of industrial and commercial entities, according to Kabariti.

He said less “red tape” and firmer law enforcement will encourage the necessary investments, which function as a virtuous circle across sectors, with one investment project leading to another.

In an article published in Al Rai Arabic daily on Monday, economist Fahed Fanek said the suggested investment volume of JD16.335 billion over the next five years should increase economic growth by much more than 1 per cent annually.

Without the plan, the Kingdom’s economy is expected to register growth rates between 3 and 4 per cent, while the plan seeks to achieve a 5 per cent rate, an aspiration Fanek considers “humble” in comparison to the proposed volume of investments.  

Otherwise, this means that the local economy would be “saturated with investments” and would only offer minimal investment revenues, he explained.

Meanwhile, he noted that some details of the blueprint are still unclear, including its preamble.

“Did planners assume that peace will prevail in the region, and that conditions in Iraq, Syria and Sinai will return to normal so that borders and markets will open and the threat of terrorism will be neutralised?” he asked.

Responding to the remark, Kabariti said the plan includes sector-oriented marketing strategies aimed at stable markets that are less likely to be affected by political and security challenges, including Europe and Africa.  

Former finance minister Mohammad Abu Hammour said the major challenge lays in the implementation of the governmental investments included in the new plan, which should not lead to increase public debt and budget deficit.

While agreeing with Fanek on the possible impact of regional unrest on the local economy, he said a number of reforms must be implemented to improve public performance, boost governance and uphold the rule of law. 

Maher Mahrouq, director general of the Jordan Chamber of Industry, said the plan is novel in the way it seeks to direct local investments to the local market in order to best serve national economy.

He added that capital expenditures are prone to stimulate economy the most when they are referred to local investors and contractors in projects that employ locals. 

He noted that the plan originates from the ministries’ executive programmes, and stressed the importance of starting with major projects in priority sectors to prove the efficiency of the blueprint.

 

Commenting on the government’s ability to handle its allocated investments, Mahrouq said partnership with the private sector is the cornerstone of this new plan, highlighting the Jordanian private sector’s ability to finance and execute these projects.

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