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90% of Jordanians will not face power bill stress with new tariff — PM

By JT - Jan 09,2022 - Last updated at Jan 09,2022

Prime Minister and Minister of Defence Bisher Al Khasawneh holds a press conference at the Prime Ministry on Sunday (Petra photo)

  • Cabinet restructures customs fees
  • Debt-to-GDP ratio expected to drop in 2022

AMMAN — Prime Minister and Minister of Defence Bisher Al Khasawneh on Sunday said that 90 per cent of Jordanians will not be affected by the new electricity tariff that will come into effect in April and a platform will be launched to receive subsidy applications for the electricity bill.

During a press conference at the Prime Ministry, announcing a slew new government decisions, Khasawneh said that power bills will be reduced on vital economic sectors, including the health, tourists, agricultural, commercial and industrial sectors to play a role in increasing their competitiveness, economic growth and creating jobs. 

The prime minister said that the next two days will witness the announcement of “a clear mechanism” on how households can apply for subsidies on power bills. 

Khasawneh expected tax and customs reforms and the public debt service to lead to reducing the public debt to 90.9 per cent of GDP in 2022 compared with 91.6 per cent in 2021 and to stand at 84.4 per cent by the end of 2024.

He said that the Cabinet on Sunday decided to restructure customs fees to enhance the competitiveness of the economy as of April.

He added that customs fees categories will be reduced to four instead of 11, noting that the previous categories’ percentages ranged between zero and 40 per cent, while the percentages of the new categories will range between zero and 25 per cent only.

Khasawneh stressed that restructuring the customs fees will have a positive impact on importers and traders, and will facilitate their activities and work and reduce costs, time and efforts, in addition to enhancing purchasing power.

He also noted that restructuring the customs fees is part of a comprehensive customs reform that also includes reconsidering procedures and preventing abuse of power by authorities, stressing that the general monitoring reference on border crossings will be the Jordan Customs Department, where other institutions will work under its umbrella. 

Khasawneh said that every commodity that does not have a local counterpart will witness a reduced customs fee to become 5 per cent, except for imports associated with local industries that are under protection. 

He added that the new customs system will allow the pre-clearance on imported goods while they are en route which will reduce the time of clearing goods from nine to three days and consequently reduce costs and prices. 

He said that the government will cooperate with telecommunication companies to build 5G networks through allowing local companies to establish the necessary infrastructure for the advanced mobile networks. 

Khasawneh said that launching 5G networks is “an economic enabler and an investment-attractive framework”, the Jordan News Agency, Petra, reported. 

As for the status of the Jordanian dinar, the prime minister said that the Central Bank of Jordan (CBJ) has implemented a series of procedures to alleviate the economic impact and repercussions of the pandemic, adding that the total value of these procedures amounted to JD2.7 billion or 8.6 per cent of GDP.

He noted that a total of 6,000 companies and projects benefitted from CBJ’s programmes, which contributed to protecting 140,000 jobs, stressing that Jordanian dinar’s status is “stable and safe” and that the monetary policy of the Kingdom “drives through further stability”. 

The premier said that the volume of exemptions and facilities for the tourism sector in 2020 and 2021 reached JD103 million that benefited 4,675 facilities and individuals working in the sector. 

Khasawneh said that Jordan’s reserves of strategic commodities are enough for “safe periods”, and that the available and contracted amounts of wheat and barley are enough for the Kingdom’s needs for 16 months for wheat and 12 months for barley. 

He also noted that allocations for capital projects have witnessed a remarkable increase of 43.6 per cent in 2022 compared with 2021, reaching JD1.551 billion in 2022 compared with JD1.08 billion in 2021.

The prime minister also said that the government seeks to enhance partnership with the private sector and attract investments to realise a positive impact in providing jobs and putting an end to unemployment. 

He also noted that the government action priority programme has focused on empowering the private sector and increasing its competitiveness, noting that the government has allocated JD80 million from the 2022 budget to stimulate the private sector in creating jobs for Jordanians. 

Khasawneh said that the national strategy for human resource development has been updated to match the educational outcomes with the requirements of the labour market. 

On December 22, 2021, the World Bank approved a financing of $112 million for the Jordan Support to Private Sector Employment and Skills Project, a programme designed to support Jordan’s governmental efforts to stimulate private sector employment, improve skills training, and reduce youth and female unemployment.

The latest statistics issued by the Department of Statistics show that the unemployment rate in Jordan until the end of the third quarter of 2021 stood at 23.2 per cent (21.2 per cent among males and 30.8 per cent among females). 

The premier said that the national employment programme seeks to employ 60,000 within a year through subsidizing wages for six months with JD150 per month under annual contracts with the private sector in all sectors and all governorates. 

The Development and Employment Fund will also allocate JD24 million to establish and finance small- and medium-sized enterprises, targeting 1,600 projects that will contribute to providing 2,000 jobs, including JD7 million to support tourist activities hit by the COVID-19 pandemic. 

He added that the projected costs of public debt services in 2022 is expected to decline by JD24 million compared with 2021, which is a good indicator that will be realised for the first time in several years. 

The prime minister also said that the percentage of local revenues increased last year, which highlights the “success” of efforts in addressing tax and customs evasion and avoidance

He said that 22.8 per cent of the total needs of the Jordan Response Plan to the Syrian Crisis, estimated at $2.4 billion, was met in 2021.

He added that the government plans to refer a draft law for investment to the Lower House before April 1, with the aim of unifying the legislative aspects of the investment process.

Khasawneh also said that the government has an agricultural plan that extends until 2025. He expects the plan to be announced over the next few days. 

The premier said that the government has finished most procedures related to the tender of the National Water Carrier Project, which will be floated in the next few months to bridge part of the Kingdom’s water deficit.  

He also referred to several major projects that were temporarily halted, such as the Sixth Circle Towers, stressing that work will continue on these projects.  

The prime minister also pointed to a railway project that attracted the attention of a sovereign fund of an Arab country.

He also announced a project to establish a university hospital that will be implemented by a sovereign fund from Saudi Arabia. 

Khasawneh said sovereign funds in Arab countries showed interest in investment in Jordanian companies.

He also noted that discussions are under way to establish a new administrative city, which will not be a new capital.

The premier also said that the constitutional amendments endorsed by the Lower House last week aim to realise progress in political modernisation in the Kingdom, through a three-phase period, until a partisan majority in parliament is reached.

He expects the number of seats allocated for political parties to reach 65 after three parliamentary elections. 

He said that the Public Sector Modernisation Committee is required to offer a political roadmap for administrative reform within six months to be integrated with the modernisation of the political system.

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