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Abu Dhabi, UAEMonday 10 December 2018

Jordanians angered by removal of subsidies that will double the price of bread

The rises are part of austerity measures the government agreed with the IMF in 2016 to generate revenue and cut public debt

Could traditional bread from an old-fashioned bakery in Amman become unaffordable when government subsidies end in a month's time? Salah Malkawi for The National
Could traditional bread from an old-fashioned bakery in Amman become unaffordable when government subsidies end in a month's time? Salah Malkawi for The National

Jordanians are venting their anger on social media at the government's decision to remove subsidies on bread and double the price, even though it does not come into effect for a month..

Prices have not yet risen but social media platforms are already awash with sarcastic comments expressing frustration at the government.

“As of next month, the one who carries a loaf of bread and walks in the street is like one is holding a mug of Starbucks,” wrote one Jordanian on twitter.

“This is not fair and you have to stop this decision … Jordan does not need revolutions and time bombs,” wrote another on Facebook.

On Monday, the government announced the removal of subsidies and the new bread pricing formula which will take effect at the beginning of February and will continue for a year as Jordan has sufficient wheat reserves to last for that long. After that, prices are likely to change according to the international market price of wheat.

The price of flat bread will range between JD0.32 and JD0.40 per kilogram (Dh1.6 to Dh2.07), which is double the current price.

The rises are part of austerity measures the government has adopted since a three -year agreement with the IMF in 2016 to generate revenue and cut public debt to 77 per cent of GDP by 2021. It currently stands at 27.25 billion Jordanian dinars, or 95 per cent of GDP. But the increases come when times are already hard for many Jordanians, with 18.5 per cent unemployment and 14.4 per cent complaining of poverty.

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The minister of industry, trade and supply Yarub Qudah defended the government’s decision, arguing that non-Jordanians who make up 35 per cent of the population are benefiting unfairly from bread subsidies that cost the country 120 million dinars last year.

“Sixty five per cent of the bread allocations are benefiting non-Jordanians,” he said. “Jordanians as a whole consume only 35 per cent of bread production which stands at 45 million dinars or less out of 120 million dinars."

Jordanians are already infuriated by price rises in a country hard hit by regional crises, the interruption of gas supplies from Egypt and eroding grants. As well as bread prices, the cost of other items is expected to rise as taxes increase, pushing more Jordanians towards poverty.

“We have people buying bread in debt and many come and ask for bread and say they cannot afford to pay,” said Salah Qasim, 28, whose family owns a bakery in eastern Amman. ”Many spend a dinar on bread but once the prices go up they will not be able to afford it.”

The government said it will provide cash assistance to offset the impact of the price increase. Anyone earning less than 6,000 dinars (Dh31,052) a year, or families on less than 12,000 dinars (Dh62,105) a year will receive a one-off payment of 32.5 dinars (Dh168.20) per person. The 2018 state budget passed by Jordan's parliament last month includes 177 million dinars (Dh916 million) to help those hardest hit by the removal of subsidies.

Protests have erupted in Tunisia over soaring living costs and in Sudan demonstrations over increased bread prices led to the death of a student on Sunday. The reaction in Jordan remains unpredictable, and therefore potentially dangerous, said Ahmed Awad, director of the Phenix Centre for Economic and Informatics Studies in Amman.

“Officials should be worried," he said. "When people are quiet this is not a good sign because unrest in society could happen anytime."

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