After health-related ‘victory’ in COVID-19 fight, now is time for economic response — Al-Ississ

AMMAN — Minister of Finance Mohamad Al-Ississ on Sunday outlined the government’s economic vision to counter the “unprecedented shock” caused by the coronavirus crisis for the coming phase in the Kingdom.

During a press briefing at the National Centre for Security and Crisis Management, Al-Ississ noted that the coronavirus pandemic crisis is a global crisis that has affected all parts of the world.

What worries all the governments of the world are the crisis’ negative effects on the private sector, families and employment, in addition to the balance of revenues and expenditures, he said.

“This virus represents the greatest economic threat since the Great Depression in 1929,” the minister added.

Just as the health effects of the virus have been more severe for patients with other chronic conditions, its economic impact is worse for companies that also had previous struggles, the minister said.

“As His Majesty King Abdullah instructed us to adopt the approach of full openness and transparency when talking about health aspects, so is the matter in the financial and economic aspects,” Al-Ississ asserted.

He added that, while the health effects of the crisis are “still not clear” in the world as a whole, it is also impossible for any country to determine precisely the impact of this “unprecedented shock” on its economy.

“However, in line with the transparency approach, we would like to share with you the economic vision for the next phase and what we know about the effects of the coronavirus crisis on the economy for now,” he added.

The minister said that the Kingdom engaged in a “health war” against the virus months ago, under the leadership and direction of His Majesty, noting that the first stage was the complete closure that led to a total cessation of all economic activity.

This measure was “a painful but very important step” in the battle against the virus, he stressed.

Al-Ississ affirmed: “After the health-related victory, now is the time to act to balance the economic impact, as we have now entered into an economic war against the virus while we are still fighting the virus itself.”

The minister noted that the impact of the economic blow that government revenues and the gross domestic product (GDP) received is “profound”, as local revenues decreased by the end of April 2020 by JD602 million compared with the same period in 2019.

“Moreover, although we expected a 2.3 per cent GDP growth in 2020, we now expect a 3.4 per cent GDP retraction,” he said.

He highlighted that the preoccupation of all countries with this crisis has “dried up” the financial markets, adding that the decrease in consumption has siphoned the liquidity available to the private sector.

“Therefore, our next stage must see a balance between public safety and flexibility on the economic side, and we must be prepared for the possibility of more coronavirus waves in the future, God forbid,” Al-Ississ said.

The second stage is to open some sectors gradually with a two-pronged approach, he noted.

“First, we must maintain financial stability in the Kingdom; and second, we must try as much as possible to create an environment to help citizens maintain the financial resilience of their families,” the minister asserted.

“From our understanding of the impact of this crisis on the global and national economies, we are sure of the depth of its impact on companies and individuals,” he said.

“Despite the crisis affecting revenue, we are preserving spending on social safety nets, health and other essentials,” the minister said. “One of the tools is to inject liquidity into the private sector, to pump cash to families through the taxpayer.”

In light of this spending, he noted, a rise in the fiscal deficit is expected. “However, we also know that we are in a survival battle, and like in any battle, we must use the necessary tools in a timely manner to protect citizens,” the minister added.

Al-Ississ said: “Therefore, the Defence Order today comes to postpone taxes within a broader framework that reflects the government's policy of gradually returning things to normal, or at least towards a new normal, which we will build together.”

He voiced appreciation for all the companies and citizens who have fulfilled their national duty and submitted tax returns during the recent period, despite the difficult circumstances.

In the future, if Jordan enters the third stage of recovery “rigorously and cautiously”, the Kingdom can show the global community the flexibility and capacity of Jordanians to overcome a crisis together, as it has shown before, which will boost investment and confidence in the Jordanian economy, he affirmed.

“I would also like to affirm that we are able and committed to paying salaries to the public sector, as well as committed to paying both internal and external debt,” the minister asserted.

In conclusion, Al-Ississ said: “In the face of the challenge, we had to make difficult decisions, and we are fully aware that every home had to do so as well.”

“Despite the difficulty of the opponent and the novelty of the battle, we, God willing, are able to use tools in a timely manner to maintain the health and safety of the economy.”