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Abu Dhabi, UAESunday 24 June 2018

New prime minister faces a struggle to bring stability to Jordan

Technocrat Omar Al Razzaz must win over those facing economic hardship while fulfilling Jordan’s significant obligations to the IMF

Protesters gather for a demonstration outside the prime minister's office in Amman, early Tuesday, June 5, 2018. Raad al-Adayleh / AP
Protesters gather for a demonstration outside the prime minister's office in Amman, early Tuesday, June 5, 2018. Raad al-Adayleh / AP

As several thousand protesters marched through Jordan’s capital, Amman, on Monday night following prime minister Hani Mulki’s resignation, they chanted “No to Mulki, No to Razzaz”. It was a response to now-confirmed rumours that former World Bank economist Omar Al Razzaz had been appointed prime minister in a bid to subdue demonstrators.

But as one of Jordan’s worst crises in decades lurches on, Mr Al Razzaz faces an uphill battle. Amid rising public debt, an influx of some 700,000 Syrian refugees, conflicts in neighbouring Iraq, Syria and Palestine and double-digit unemployment, the government was forced to sign a $750m loan agreement with the IMF in 2016, which introduced a raft of austerity policies that squeezed the middle class.

The latest, a major income tax law, was the final straw, spilling thousands onto the streets in nationwide strikes.

But real change will be hard to achieve, despite the resignation of one prime minister and the appointment of another.

Mr Mulki has been praised for his “bravery in taking difficult decisions that do not gain popularity” by King Abdullah II, who asked him to remain as caretaker until a new government is formed.

Meanwhile, the Professional Unions Association chief said it will continue its industrial action unless the income tax law is withdrawn. And protest organisers said that personnel changes in government are immaterial without fundamental reforms.

Mr Al Razzaz is a skilled administrator, well-versed in the challenges of debt-ridden countries with swollen bureaucracies. But whether he can win over those facing economic hardship while fulfilling Jordan’s significant obligations to the IMF is another matter.

Shrewd governments like Egypt’s have successfully revived their economies with the help of international lenders. Austerity in Jordan must be coupled with strategic investment designed to revive the flagging economy.

Even if the contentious income tax law is withdrawn or amended – as Jordan’s official Petra news agency yesterday hinted it might be – debt reduction targets will need to be met. Meanwhile, proponents of fundamental change are growing louder.

They may well be frustrated by the appointment of the technocratic Al Razzaz, signifying further uncertainty in Jordan, traditionally a bastion of stability in a precarious region.