The IMF praises itself

In a recent statement, the International Monetary Fund (IMF) told us that despite plenty of difficulties, Jordan was able to achieve great progress during the past several years i.e., during the previous economic reform programme sponsored by the IMF (2012-2015).

Such a statement suggests that the previous programme was a success and that it achieved most if not all its objectives.

This is not true as evidenced by the economic indicators of the subject period, which are recognised by the IMF, such as the low economic growth rate, a rise in unemployment, an increase in public debt — in absolute figures as well as in a ratio of the gross domestic product (GDP) — and a rise in the budget deficit and in the current account of the balance of payments.

If these facts are the actual results of the previous IMF programme, how can this be described as a success?

It is obvious that the IMF is giving this sort of praise for its own benefit. Naturally it does not like to admit that the Jordanian economy went in the wrong direction under its watch and that its nice statements given regularly to the media were for public relations purposes.

Since at least a mild failure has been proven beyond doubt, the question will be who is responsible and whether it is the IMF or the government, unless we should blame the unfavourable circumstances in the region along with the so-called Arab Spring.

Each one shares responsibility at various rates. The problem lies in the state of denial. The fund did not recognise the failure, the government used to assure us, time and again, that everything was going in the right direction and the regional circumstances do not lend themselves to control.

It is important, at this time, to admit the failure of the previous programme in order to draw the necessary lessons and make sure that failure will not persist during the new IMF programme, which is supposed to have started on July 1.

We don’t need a programme to set the objectives. We all know pretty well that we need a higher economic growth rate, an increase in job opportunities, enhanced competitiveness, improved revenue, transparency, good institutional governance, a reduction of the deficit and, last but not least, a reduction of the gross public debt as a ratio of the GDP from as high as 94 per cent by the end of 2015 to 77 per cent within five years.

What counts in this respect is how to achieve these objectives within our means. Unfortunately this question is left to the government to decide.

As an example, the IMF wanted an increase in the Treasury revenue of up to JD154 million during the second half of this year. It was left to the government to find the ways and means to do it. It came up with seven unpopular decisions to hike prices, fees and taxes.

The people, as well as the government, are not short of desired objectives. The difficult job is left to the discretion of the government to choose ways and means and to go ahead and implement them.

It is quite easy to plan on paper, but it may not be as easy to carry out the plans.