IMF programmes in Jordan need comprehensive review — study

AMMAN — A study by the Centre for Strategic Studies at the University of Jordan on Sunday stressed the importance of prioritising the legislative reform of economic laws, and the start of sectional and micro-measurable targets to increase transparency and accountability.

Titled “Analysis of IMF Programmes in Jordan from 1989 to 2016”, the study emphasised the need to define the scope and momentum of the reform, particularly in the areas of public finance and the public sector, as identified in the national reform plans, according to a statement from the centre.

It also called for a comprehensive review of the Income Tax Law, not only to increase the state’s fiscal revenues, but also to achieve social justice, especially through preventing tax evasion and stimulating economic growth, the statement said.

The study said that the government, by complying with the IMF programmes, aimed at restoring and maintaining the overall stability of the economy and at correcting the structural imbalances, especially in the field of public finance.

“The objectives of the fund’s programmes implemented in Jordan have not been met in performance indicators such as increasing economic growth rates, reducing inflation rates and addressing chronic structural imbalances in public finances,” the study noted. 

“The entire fund’s programmes do not have economic policies of a developmental dimension, mostly focusing on financial reform in the public budget and the monetary sector” while “the timeframe agreed upon between the government and the IMF has not been met, leaving a negative impact on the performance of the Jordanian economy”, the study added.

It also showed that many economic plans till the year 2004  “did not pay attention to the risks that may result from the decline in the volume of external aid received”.

It pointed out that the programmes “did not include long-term solutions and strategies, because of the rigidity of some items within the government spending such as wages, salaries and pensions, and instead focused on rationing the increase of these items, which led to the continuation of structural problems in government spending”.

“Most of the measures focused on significantly raising government revenues, which reduced the competitiveness of the Kingdom compared to neighbouring countries, especially the Gulf countries,” the study showed, adding that this “will reduce the chances of realising the assumptions on which this programme was built, especially increasing the volume of private sector investments”.

The cooperation of successive governments with the IMF has been in place for 30 years through two programmes of credit readiness (1989-2004), (2012-2015), in addition to the existing extended credit facility programme (2016-2019), aimed at restoring the overall stability of the Jordanian economy.