What does the government have up its sleeve?

The government’s sudden, unprecedented and rather dangerous decision to transform the Ministry of Finance’s Directorate of Government Contributions into an independent corporate body is strange.

The decision raises many questions and fears regarding its true goals. It seems to go back on successive governments’ decision to effect privatisation.

In their statements and pledges, governments used to promise that they would offer private sector and strategic local and international partners the chance to run government companies whose work suffered due to bureaucracy, negligence, indifference and lack of initiatives in efficient and modern ways.

They used to say that privatisation would ensure a bright future, would help face challenges, improve quality of production, reduce cost and guarantee constant development.

All this talk, however, seems to have been wishful thinking, because successive governments, but especially the current one, did not seem to care about what is happening at privatised entities, in terms of organisational structure and job imbalances.

The current government does not care about the companies that were privatised, Royal Jordanian Airlines being the foremost example, and while it still has a stake in them, it owns no more than 49 per cent in shares, or much less, in the majority of them.

It does not lift a finger when decisions are not followed or are taken haphazardly, in a manner that reminds of the pre-liberalisation era, and, in RJ’s case, which faces serious competition in the industry, it does nothing to address the rapid growth of indebtedness and continuous losses, despite the drop in fuel prices.

Rather, the government names board members and uses them as pawns to exercise a carrot and stick strategy, to reward yes men and marginalise shareholders, small and big.

As a result, shareholders lose money due to the government’s whimsical decisions, vested interest and desire to please certain people, and not because of economy-based decisions.

Therefore, there are growing fears that losses will continue to be registered, even after the government announced the establishment of the new independent entity, which will manage the government shares, that the ministry’s directorate had earlier been in charge of.

Will the new entity handle the shares with the same mentality and in the same manner it runs RJ shares, despite the fact that it does not own a majority?

Or will it make use of its board members to obtain certain benefits, appease or compensate some for their loss of jobs or provide some with more powers or influence, and thus deny the private sector its role?

One wonders how serious the government is when it talks about facilitating investments, assuring investors and securing rewarding profits.

One also wonders why the government fights with shareholders over money and obliges them to comply with its decisions through imposing boards on private companies to manage their finances even though they have no shares.

It is important to know who represents shareholders when the Social Security Corporation nominates boards candidates, while seats should be occupied through competition among shareholders who would thus be kept well informed of decisions.

It is time the government makes is goals known, especially that April, the month when budgets are discussed and final accounts are endorsed has just finished.

It should state clearly and explicitly what it wants to achieve through its recent decision that buried the Ministry of Finance Directorate of Government Contributions and set up an independent entity instead.

Or is the government hiding something?

The writer is a Jordanian investor and economist. He contributed this article to The Jordan Times.