Jordan gets new PM after mass protests
KING APPOINTS EX- MINISTER AL RAZZAZ AS PREMIER FOLLOWING MULKI’S RESIGNATION
The government of Jordan’s Prime Minister Hani Mulki resigned yesterday after anger erupted on the streets over a proposed tax law and other austerity measures.
King Abdullah II asked Omar Al Razzaz, who was education minister in the outgoing administration, to form a cabinet, according to the semi-official Al Rai newspaper, which cited a royal decree.
Up to 18,000 demonstrators took part in protests that started on Wednesday after the government referred a controversial tax law to the lower house of parliament for endorsement. Security officials said 60 protesters were arrested.
The government had been attempting to pass the tax law under an International Monetary Fund-supported reform programme in order to improve collection, curb evasion and boost revenue, with a target of 300 million dinars (Dh1.55 billion) annually. The law increased the taxpayer base from 5 per cent of Jordanians to 10 per cent by lowering the threshold for taxable income. It also removed several exemptions given to families and households, and increased levies on banks, industries and other economic sectors.
Protesters had called on Mulki to step down, vowing not to “kneel” and earning support from trade unions as well as a majority of MPs opposed to the new taxation. In a sign the tax hikes could be shelved, the Petra news agency, citing the speaker of parliament, said lawmakers were on course to ask the king’s permission to hold an exceptional session, with a majority demanding the changes be withdrawn.
Jordan, a mostly desert kingdom with few resources, has seen prices of several basic goods and services like bread, fuel and electricity steadily rise over the past year.
The rise in global commodity prices and the ongoing expense of housing refugees from conflicts in neighbouring Syria and Iraq has stretched the nation’s finances.
Jordan’s King Abdullah yesterday asked Omar Razzaz, a former World Bank economist, to form a new government after Hani Mulki resigned as prime minister following the country’s biggest protests in years, a ministerial source said.
The move appeared aimed at defusing popular anger over planned tax hikes that have brought thousands of people onto the streets in the capital Amman and other parts of Jordan since last week. Razzaz was education minister in Mulki’s government. Mulki resigned from his post as Jordan’s prime minister in a meeting with the king yesterday, an official source said.
Razzaz is a Harvard-educated economist who served with the World Bank in both Washington and the region. He has been an opponent of free market reforms that hurt the poor, and is expected to take a gradual approach to policy changes. Officials say his appointment sends a positive message to foreign donors that Jordan will continue with a tough three-year IMF plan of reforms to reduce spiralling public debt.
Political outsider
Officials who have worked with Razzaz say he has proven to be a capable administrator in a string of posts in recent years where he worked also on reforming the state pension fund, and he hails from outside the country’s traditional political class.
Thousands of Jordanians have been protesting in the capital and other provincial towns for days. Jordan, a staunch US ally, that has remained stable through years of turmoil in the region, has been left shaken by the protests.
Police chief Major General Fadel Al Hamoud said security forces had detained 60 people for breaking the law during the protests and 42 security force members had been injured, but protests remained under control. “Rest assured, Jordan is a safe and secure country, and things are under control,” said Major General Hussain Hawatmeh, head of the Gendarmerie security department, appearing along with Hamoud at a news conference. Public anger has grown over government policies since a steep general sales tax hike earlier this year and the abolition of bread subsidies, both measures driven by the International Monetary Fund.
In a sign the tax hikes could be shelved, the Petra news agency, citing the speaker of parliament, said lawmakers were on course to ask the king’s permission to hold an exceptional session, with a majority demanding the changes be withdrawn.
Mulki, a business-friendly politician, was appointed in May 2016 and given the responsibility of reviving a sluggish economy and business sentiment hit by regional turmoil. The tax increases have caused his popularity to plummet.
The protests, the biggest in Jordan in years, widened on Saturday after Mulki refused to scrap a bill increasing personal and corporate taxes, saying it was up to parliament to decide.
Demonstrators who converged near the Cabinet office said they would disband only if the government rescinded the tax bill it sent to parliament last month. “The government has made us penniless ... they have left us with no more money in our pockets,” chanted protesters.
Unions representing tens of thousands of employees in both the public and private sectors have also called for a general strike tomorrow after their demands for the bill to be scrapped were rejected by the government. The government says it needs more funds for public services and argues that the tax changes reduce social disparities by placing a heavier burden on high earners. Opponents say a tough IMF-imposed fiscal consolidation plan has worsened the plight of poorer Jordanians and squeezed the middle class.
Jordan’s economy has struggled to grow in the past few years in the face of chronic deficits, as private foreign capital and aid
In a sign the tax hikes could be shelved, lawmakers were on course to ask the king’s permission to hold an exceptional session, with a majority demanding the changes be withdrawn.
flows have declined. Protesters also criticise politicians for squandering public funds and corruption. “Our demands are legitimate. No, no to corruption,” chanted the demonstrators urging King Abdullah, who is seen as a unifying force, to intervene and crack down on official graft. Jordan’s overall public debt rose to 94 per cent of gross domestic product this year, from 95.3 per cent in 2017. Economic growth should reach 2.2 per cent in 2018, which is not enough to address unemployment that is at its highest in 20 years.
of GDP is Jordan’s overall public debt this year
expected economic growth in Jordan this year