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Looking inwards to address the chronic economic situation

Oct 02,2017 - Last updated at Oct 02,2017

Jordan is going through a dire economic situation despite the obtained loans and grants.

As King Abdullah said, the country has no option but to start looking inwards to address the chronic economic situation.

Economists have long debated the untenable economic situation. Jordan has been able to keep its head above water thanks to the grants and loans from allies.

However, it seems the traditional allies are unwilling to sponsor the country for good, hence the need for a paradigm shift.

The disruption of regional trade caused by regional instability and the arrival of hundreds to thousands of Syrian refugees in Jordan further contributed to the socio-economic decline.

On the whole, Jordanians are trying to make sense of the situation. Regional and international backers are not helping Jordan enough despite the positive geo-strategic role it is playing.

Many Jordanian, this writer included, feel that Jordan’s positive regional role is not highly appreciated. All lip service paid to Jordan has yet to translate into tangible economic aid.

I believe the government is right to talk about tax reform. 

We all know that there are some sectors that evade paying income tax, like lawyers, engineers and medical doctors, for example.

There are other sections that systematically evade paying income tax. Hence, good governance entails activating a more efficient and effective mechanism to handle the issue of tax evasion.

Jordanians understand that foreign aid is not going to be given forever, but they also believe that the government will enact a new income tax law that will affect the lower and middle class.

Despite the government assurance that the new law will be fair, it seems that there is still a trust gap between people and government.

Even the Parliament — which is widely seen as an institution that rubber stamps whatever the government comes up with — is unlikely to cooperate with the government on the income tax law without running the risk of further losing its status among Jordanians.

There is also need to listen to the street. There is a widespread conviction that the government is not doing enough to put a cap on corruption.

Some even argue that the role of the government is only to impose new taxes instead of dealing with the real problems: tax evasion and corruption.

In truth, Jordanians should stop looking outwards for internal economic problems. It is risky to continue to believe that someone would always be there for Jordan.

And the government should think outside the box. It should not take for granted that imposing more taxes is a step that Jordanians will understand.

Not only have their living standards taken a nosedive, but the unemployed youth can soon lose faith that the country is on the right track.



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