General budget after decentralisation

Prime Minister Hani Mulki directed the General Budget Department (GBD) to start preparation for the general budget 2018, to take into account the budgets of governorate councils that will be established after the August 15 elections, in accordance with the Decentralisation Law No. (49) of 2015.

What are the fundamental changes that will emerge in the Kingdom’s general budget 2018 as a result of the transition to decentralisation?

The most prominent and fundamental changes to the structure of the general budget is the emergence of a major capital expenditure item, called “Governorates’ councils”, where GBD will put ceilings in the 2018 general budget.

The second change is the decrease in the allocations of ministries and government agencies on the capital expenditure side of the general budget. 

This means that the 2018 budget will be estimated on the same basis as in each year, except for the capital expenditures, which will be partially estimated by the executive governorate councils and approved by the elected governorate councils.

The executive governorate council, chaired by the governor in each governorate, will determine the development, investment and service projects necessary in the governorate and will prepare an estimate budget in accordance with the ceilings set by the GBD, and will submit it for approval to the elected governorate council.

Then, the estimate budget will be submitted to the GBD for approval and to be listed in the Kingdom’s general budget.

The elected governorate council will serve as a board of directors or mini-parliament on the executive council of the governorate.

The ceilings that will be developed by the GBD for the governorate councils budgets mean that the decentralisation process will be gradual, to ensure proper application

In order to ensure the good implementation of decentralisation in the first few years, the task of executing projects in all governorates will also be left to the concerned ministry.

According to the Decentralisation Law, the government will appoint an equivalent of 15 per cent of the total number of elected members of the governorate councils as experts in economics, investment and law and other specialists, to strengthen the councils.

After the first year of decentralisation, the experiment will be evaluated and a more advanced step towards decentralisation will be taken by allocating larger sums of money and transferring more executive powers to the governorate councils.

In the coming years, the number of employees in ministries and government agencies is expected to decrease. 

Therefore, the size of the central government will be reduced in favour of governorate councils, because the burden of planning and execution will gradually shift from central government to governorate councils.

From the theoretical and legislative point of view, the organisational and institutional structure of decentralisation indicates that there is an advanced form of democracy and popular participation in the decision-making process.

The big responsibility placed on the governorate councils requires voters to elect qualified people to these councils who can carry out the tasks that used to be carried out by the GBD, ministries and the parliament.

If they fail to do so, the decentralisation experience will be fragile and weak, and decentralisation will be presented as a setback at the beginning.

All parties care to see this experiment, which will practically start in the fiscal year 2018, succeed.

The number of members of governorate councils (336, including 32 seats for women) is large, more than twice the number of the members of the House of Representatives.

Women have two chances in these elections; they will occupy 10 per cent of the elected seats and one third of the 15 per cent of the seats of members appointed by the government.

There is no doubt that the governorate councils will ease the pressure on the House of Representatives to take up the development and service issues in the governorates, and will strengthen the function of the members of parliament as politicians, lawmakers and monitors of the central government performance.

Jordan’s transition to this stage is considered an advanced step towards expanding the scope of decision making at all levels of administration, investment and development.

In the future, it is expected that decentralisation will move from expenditures only to both sides of the general budget (revenues and expenditures).

This means that governorates in different parts of the Kingdom will benefit from larger amounts of revenues that are generated in their zones, which will positively and efficiently reflect on spending on development projects, services and different categories of investment in the governorates.

The experience of decentralisation in Jordan is still in the incubation stage; therefore, it requires forbearance to ensure its success.

Jordan should be congratulated on this democratic and civilised step, which will hopefully soon be a success story.

From the first year’s lessons, the right direction of the next step will be determined.

The writer is director general of the Association of Banks in Jordan. He contributed this article to The Jordan Times.