Budget issues

A discussion of the 2014 budget by three prominent analysts at the Economic Policy Development Forum in Amman last week shed light not on the positive side of things but also on what is missing in the budget.

One pundit after another (one a former minister of finance) highlighted what deficits exist in the making of the budget.

The upshot, however, was the not-so-subtle, painful realisation that the people are helpless and that their voices, dialogue and demands are neither sought nor heard by the government.

The host, Talal Abu Ghazaleh, a businessman of global stature, circulated a brief set of notes about the budget, which highlighted the actual size of the deficit (JD3.4 billion, or 13 per cent of the GDP), not JD1.114 billion, or 4 per cent of the GDP, as claimed by the government.

The analysts delineated the various items and aspects of the budget, the expected expenditures and revenues, and the underlying assumptions.

There was nothing new, as usually this is a budget designed without any development plan or vision; its revenues are overestimated, with complete disregard for the negative impact of increased taxation and fees on economic activity.

It is a fragmented budget, one for the central government and the other for the 64 independent organisations that had been a source of mischief and lack of transparency for years now.

There is complete absence of development projects in spite of the $2 billion in aid funds availed already from GCC countries, and it brings about a de facto manner a growing deficit and national debt (JD19 billion or JD2,800 per man, woman and child).

Furthermore, the budget comes after government institutions failed miserably to motivate the economy to grow by mobilising the GCC fund.

There is not even the hint of a promise to increase spending from the fund this year. Only JD200 million were spent out of JD1,400 million, hardly a performance worth bragging about.

In fact, the funds have become a source of embarrassment for the government, as they highlight its incompetence and unwillingness to act.

Hence, more funds, which would be welcome in any nation, may cause more criticism of the government. 

Right now, their only benefit is to buttress the foreign reserves at the Central Bank of Jordan.

My complaint regarding the budget and the discussion is that about 100 like-minded people, including ex ministers and officials, and several senators, sat there and discussed what we all knew to be correct.

We talked among ourselves, but there was no conversation with the government.

It seems as if by some magical stroke of genius, when a person becomes a member of the Cabinet, he needs no further advice and requires no discussion with regular citizens.

Would the government have benefited from such a meeting and analysis by some of the best observers of the Jordanian economy?

Of course it would. However, it does not, and why should it bother? It does not answer to the people.

Like many before it, such an appointed body sees little use for a proper conversation with the people. Consequently, one blunder after another occurs and the people bear the brunt of it in terms of increased taxation and fees.

What does the government expect to happen politically as it increases taxes and fees if there is no dialogue between it and the governed?

One would have thought that the proper approach would be to have a continuous dialogue and to slowly reform towards a goal, instead of riots and wild escalations. 

It seems that this Cabinet has other ideas, not necessarily correct.

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