How to make the transition

His Majesty King Abdullah triggered the notion of self-reliance. As Sir Francis Bacon would say, the term has become an “idol of the mind”. 

Prime Minister Hani Mulki is on record to have used the term more than once. Many senior officials are using it as well. The term is picking up a life of its own.

The King used it to alert Jordanians that a new era of foreign aid scarcity is now emerging and they must exert effort to overcome the stringent measures such scarcity would bring.

His Majesty is not predicting; he is in on facts, which warranted his call for self-reliance.

To many Jordanians the news is stupefying, especially at this time when Jordan is haunted by other daunting economic challenges.

The prime minister and his Cabinet members used the term to defend the fiscal reform package. In a statement to members of a parliamentary coalition, the prime minister said that his government was the bravest, in the sense that it faces problems rather than sweep them under the carpet.

It takes courage to not postpone decisions for problems which do not go away. Courage, however, needs to be accompanied by growth policies that would enable people to grapple with the consequences.

To the critics of the government, the term self-reliance has been taken as an excuse, or a Procustean bed, to squeeze in or expand the government’s version of fiscal reform.

The opposition believes that the government has a fixation on the idea that more taxes bridge the public budget deficit.

Thus, self-reliance is a dialectical term which means different things to different people, and is used accordingly.

The question is how can we make the transition from aid to self-reliance? 

Ironically, in effect self-reliance could be viewed as a punishment for succeeding in moving from a poor, aid-receiving country to a middle-income country.

To address the issue of transition properly, we need to set a number of compatible targets that we should strive to achieve.

The first, is to make the rate of domestic revenues to current public expenditures equal to 100 per cent. Borrowing should be limited to capital expenditures that we fail to attract investment for.

The second target should be to make our exports of goods at least one half of our imports. This way we can hope to decrease our trade deficit.

The third target is to create a service trade surplus with the rest of the world to bring the basic balance (trade in goods and services) to zero, or our exports of goods and services cover in value the total imports of goods and services.

The fourth target is to decrease unemployment in Jordan from 20 per cent, where it stands right now, to 10 per cent in three years by a mixture of training locals and foreign labour replacements.

If we can achieve these four tenable targets within five years, the idea of self-reliance will be much more meaningful and less provocative. 

We have to develop a scheme addressing these issues with an all-embracing campaign to change people’s expectations and attitudes.

The recent events in the Arab world have done part of the public campaign we need to wage. The rest should come from us.

The writer is a former Royal Court chief, deputy prime minister and member of Senate. He contributed this article to The Jordan Times.