Towards new economic models in Jordan

Jordanian macro-economic indicators that have recently been revealed by several governmental and international entities show very concerning signs regarding the short- and medium-range intended progress at both macro and micro levels, unemployment rate, growth rate, spending on capital projects and lack of a clear vision of how to compensate for any emergency cut in external grants, to name a few.

The continued, and unprecedented, pressure on the country’s limited resources due to the Syrian crisis and influx of refugees, the weakened economic transactions with Iraq, Syria and Egypt, the government’s ineffectiveness in capitalising on the King’s efforts to attract foreign direct and indirect investments, the ambiguity of the micro-plans that the state-run departments have in place, the lack of true and productive cooperation between private and public sectors, the absence of comprehensiveness in integrating the many potential thoughts, inputs and suggestions from major constituents and scholars in the country, including the academic body and successful business leaders, and the persistent problem of absence of a collective intention to improve productivity per capita are easily observable root causes of the current economic situation.

Therefore, there is now, more than ever before, an urgent need to rethink our economic approach to addressing the country’s major challenges.

Wisdom says that one can never cure a disease without acknowledging the cause of that disease. Another piece of wisdom that economic and strategy scholars learned is that when we adopt a strategy, it means that we analysed the antecedents that pushed towards adopting such strategy and, more importantly, analysed — based upon real numbers — the potential outcome of such strategy.

Thus, we could justify the government’s economic policies when it entered the International Monetary Fund club many years ago, but after a decent period of time, everything seems to have remained “as is” or even got worse.

The government fell short of giving the public convincing reasons for why, for example, the debt increased enormously, unemployment rates are higher than average, growth rates are not really great, job-creating mechanisms and incentives do not seem so effective in the private sector, except maybe for very limited segments, and the tourism sector keeps stumbling.

This needs very deep analysis.

Right now, however, it is too late to play the blame game and search for the ones responsible, unless the government insists on continuing its policies, which, to a large extent, will impact our future and the future of generations to come, without considering the public opinion and, more importantly, the opinions of strategists and independent economists in this regard.

What we truly need are new economic models, more entrepreneurial and applicable in the Jordanian context.

We need a well-informed society, an enhanced role for academics who can help develop new strategic vision for the country, sincere involvement of parliament members in the decision-making process, putting away personal interests, or regional and tribal favours, and focus more on the scientific and logical approach to practising democracy, which entails communicating with the bases, getting a grasp of the most persistent problems, and then sitting together as one entity to diagnose the issues that need to be resolved.

One way to address our economic challenges is through true and scientific diagnosis of what we really lack and of the reports posted by ministries of planning and finance, and by the IMF. 

Here are a few major deficiencies that greatly contribute to the stumbling economy: lack of renewable resources of energy and very little effort to address this issue; lack of sustainable entrepreneurial projects that addresses local economic issues and concerns; lack of integrative micro-economic medium- and long-range plans; ineffective and misused regulations; inefficient use of the state’s very limited resources; lack of communication, cooperation and coordination among theorists, academicians, experts and policy makers; very general views and analysis with very little attention given to the details when addressing both macro- and micro-economic planning; structural inertia throughout the chain of command in all government economic entities; failure to incorporate the local small unregulated business sectors into the collective economic system; each individual’s economic behaviour seems to be far from the rational economic behaviour (e.g., utility function, marginal cost, marginal profit, decomposition and aggregation of economic actions at individual level, etc.).

In order for us to truly fill the blanks and bridge the gaps, we must first acknowledge the urgent need for new economic approaches, that is, how we really do business, the rationales of our economic policies, other hindrances to true economic progress.

Two types of economic models can be developed: that of already existing successful private and public entities; an entrepreneurial type that incorporates as much input as possible from academicians, business experts, successful managers and any other pertinent parties.

These models can help develop a new collective thought after having been integrated and rearticulated in a more practical manner through true collaboration among all interested parties.

To be truly successful, the parties involved in this “national brainstorming process” must think outside of the box, not fall under any influence and only consider the collective national interest, be fully independent of any government or non-governmental organisation and, more importantly, believe in what they do.

We lack no intelligence and capabilities to attain success. It is just a matter of persistence, sincere efforts, patriotism and initiatives that can unite the efforts of those who would want to help the country.

The writer is a PhD scholar in strategy and international business at the University of Texas. He contributed this article to The Jordan Times.