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Not bad, all things considered

May 17,2017 - Last updated at May 17,2017

An International Monetary Fund team has just concluded a working visit to Jordan to complete discussions on the 2017 Article IV Consultation and First Review under the country’s economic programme supported by an Extended Fund Facility (EFF) arrangement.  

An assessment of Jordan’s economic and financial situation, and Central Bank of Jordan’s (CBJ) measures earned the country praise for the policies geared towards monetary stability.

The IMF team was in the country to review Jordan’s economic progress supported by the EFF. What seems to have won its confidence and support were the authorities’ efforts to gradually remove the general sales tax and customs duties exemptions, with the exception of those on health and basic food items, and the recent steps by the CBJ to raise its policy rates, which, the IMF said, “helped to better balance the need for preserving an adequate reserves buffer and confidence in the Jordanian dinar peg against the need to provide supportive credit conditions to the economy”. 

The IMF team also noted that despite the many regional challenges, Jordan was able to continue implementing programmes, had a “reassuring” positive fiscal outcome in 2016 and made progress in implementing several important structural measures, particularly ones related to the energy and water sectors, and public financial and debt management.

On the down side, “international reserves were below programme goals, while there were some delays in strengthening the business environment and in submitting legislation on deposit insurance and the insurance sector and, most notably, in implementing macro-critical structural fiscal reforms,” the IMF noted.

Moreover, the regional and global geopolitical security developments are bound to continue to hinder investor confidence, exports, investments and public finances, even though some recent economic indicators — a rebound in exports, remittances and tourism in the first few months of 2017 — were encouraging.

On balance, it must be admitted that the country is doing all it can to put its economic development and finances on the right track, a task made even harder by the regional challenges and the continuous pressure of hosting Syrian refugees.

Donor support is therefore critical as is the continued application of the reform goals under the Jordan Economic Growth Plan 2018-2022. 

The IMF should also factor in Jordan’s treaty obligations under the International Covenant on Economic, Social and Cultural Rights, which sometimes run counter to the IMF recommendations.

 

Jordan is engaged in a fine balancing act of IMF economic and financial recommendations, legitimate concern of the public and requirements under human rights treaties.

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Comments

THE INTERNATIONAL RESERVES HAS TO BE LOW AND WILL CONTINUE TO GO DOWN AS LONG AS WE SPEND OUR FOREIGN RESERVES ON UNLESS AND HARMFUL EXCHANGES TO IMPORT THE SO-CALLED DOMESTIC HELPERS. FIRST, THIS MAKES US ALL LAZY, FAT, IMOBILE, SICK, DISABLE AND INCREASED MORBIDITY AND MORTALITY NEVER MIND ALL OTHER NOT QUITE PLEASANT BUT UNINTENDED COSEQUENCIES. THE LAW MAKERS SHOULD EITHER BAN THIS PRACICES OR IMPOSE 25% SIN TAXES ON THIS IMPORTS.
HOW ABOUT BEING MORE HEALTHY AND SAVING OUR FOREIGN RESERVES.

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