‘Does Jordan have a financial crisis?’ — panellists debate at Jordan agenda conference 2018

DEAD SEA — Increasing business productivity, transparency and integrity were a few of the solutions discussed on Thursday at the session “Financial crisis: Reality and Expectations” at the Jordan Agenda Conference 2018, organised by the Centre for Strategic Studies of the University of Jordan. 

Panellists acknowledged certain realities of the Kingdom’s current economic problem, such as its limited natural resources, the critical unrest surrounding its borders and the refugee crisis but commended Jordan for where it stands today. 

“Despite our budget deficit, we have been able to achieve great developments in our infrastructure, and the health and education sector,” said Jordan’s Central Bank Governor Ziad Fariz. 

“In comparison to other countries in the region, our sales taxes are relatively low and the tax on income is less than 3 per cent,” he added. 

However, both panellists and audience members agreed that more can be done in order to achieve a more favourable economic situation. 

Basem Salfiti, an economist and a board member at Bank Al Etihad, suggested lowering the cost of doing business for increased revenue.

“Cost of doing business, and cost of exporting is very high in Jordan. A study by Cambridge University has concluded that if only we reduce transaction costs by 0.1 per cent, revenue will go up by 4 per cent,” explained Salfiti. 

Additionally, he raised the issue of tax evasion, a popular topic at the discussion. 

“When 70 per cent of your business transactions are in cash, how can you tell where the money is going?” adding that “auditing in Jordan is not regulated and we need more transparency”.

The economist, an MBA graduate from Columbia University, argued that the current stresses on solely increasing revenue must change, but rather businesses should focus on operational productivity, transparency and integrity. 

“The economy’s best practice is productivity, which leads to real economic growth,” insisted Salfiti.