ESCs’ competitiveness study calls for accelerating economic reform

AMMAN — “The competitiveness of the Jordanian economy 2021” study stressed the importance of accelerating the steps of economic reform to improve Jordan’s competitive position in the world, which is classified in the middle rank according to the classifications of most international relevant reports.

According to the study, conducted by the Economic and Social Council (ESC), indicators of macroeconomic variables highlight the importance of tax reform, reconsideration of customs policy, preparing a binding time-limited programme that controls the public debt, and a comprehensive review of the fiscal policy approach, the Jordan News Agency, Petra, reported.

It also referred to addressing the current account deficit, promoting the Amman Stock Exchange, launching specialised funds to finance major projects, stimulating the merger process between banks, developing monetary policy tools, encouraging insurance companies to merge, and providing greater flexibility through linking the Jordanian dinar exchange rates to several currencies.

Jordan in 2019 ranked 111th out of 141 countries in the Global Competitiveness Report issued by the World Economic Forum, and ranked 62nd out of 63 countries in the Competitiveness Yearbook issued by the International Management Institute in 2020, and assumed similar ranks in other international reports.

The study stressed that the government budget deficit is one of the highest in the world as a ratio of GDP, and total national savings are among the lowest ratios to GDP in the world.

The ratio of public debt to GDP in Jordan is among the highest global rates, although the Kingdom’s credit rating is in an average rank, and the unemployment rate is among the highest in the world, according to the study.

It also showed that “the only paradox mentioned by global reports is that Jordan is the best country in the world in terms of the annual rate of change in inflation in 2019 and 2020”, Petra reported.

As for tax reforms, the study called for unifying tax exemptions according to a stable and clear methodology, with a minimum number of exceptions governed by encouraging investment and competitiveness.

The latest International Monetary Fund report on Jordan indicated that the multiplicity of economic and special zones and having multiple tax systems that govern these zones led to the complexity and distortion of the tax system.

Such procedures negatively affected tax collection and created unfair competition among taxpayers and affected competition and constituted a route for tax evasion.