Jordan's King Abdullah expected to ask PM to resign - political sources

 

FILE PHOTO: Jordan's Prime Minister Hani Mulki speaks to the media after the swearing-in ceremony for the new cabinet at the Royal Palace in Amman, Jordan, June 1, 2016. REUTERS/Muhammad Hamed/File Photo

 

AMMAN (Reuters) - Jordan's King Abdullah was expected on Monday to ask Prime Minister Hani Mulki to resign in a bid to soothe widespread anger over economic policies that sparked the largest protests in several years, political sources said.

 

The dismissal of Mulki was demanded in a series of protests against IMF-backed tax increases that have shaken the kingdom. The sources said King Abdullah had ordered Mulki for an audience in his palace later on Monday.

 

Mulki imposed steep IMF-mandated tax hikes early this year to cut rising public debt. The increases have hit the incomes of ordinary Jordanians, causing his popularity to plummet.

 

(Reporting by Suleiman Al-Khalidi)

 

-- © Copyright Reuters 2018-06-04

Here's the situation:

IMF approved in 2016 a three-year extended ambitious program of long delayed structural reforms to cut public debt to 77% of GDP from a record 96% by 2021.

The debt is at least in part due to successive governments adopting an expansionist fiscal policy characterized by job creation in the bloated public sector, and by lavish subsidies for bread and other staple goods.

https://www.reuters.com/article/us-jordan-economy-reforms/jordan-unveils-major-imf-guided-tax-hikes-to-reduce-public-debt-idUSKBN1F42Q9

Perhaps if the PM starts with downsizing the government (it was the Cabinet that approved the tax increases, likely to protect their own bureaucratic domains), following next year with some incremental tax changes such eliminating certain sales tax exemptions for nonessential items and limiting sales tax increases to 1% against the current 4-8% versus the raise to an across the board 10%, the population might be somewhat mollified for the short term. \

Jordon will still probably miss its IMF target but if some good faith effort is shown by the government, the IMF will likely give an extension to reduce debt (I'd ask for another three years arguing that defeat of ISIS will be more economic stability to the region and better prosperity for Jordan).

 

 

The main consideration would be keeping the political situation stable. Hence the PM being called for talks, and quite possibly replaced. Balancing between keeping the economy afloat and avoiding social unrest is tricky, far from certain the replacement PM will be able to dramatically alter things. Although, as stated above, even a show of "good faith" would probably be enough.

 

IMO, the IMF will be go easy on Jordan anyway. Doubt there's much interest in yet another ME mess, and that's something that's always bubbling under the surface in Jordan. The country also hosting many, many refugees from various regional conflicts plays a part as well - with regard to the economy, social unrest and the desirability of avoiding things going south.

 

So many countries not living within their means with ballooning over-sized populations that feel so entitled to things now and that they have a right to a free existence with the world owing them everything. People used to have to work hard to get anything. The way things are now is simply unsustainable and unrealistic. 

1 hour ago, Srikcir said:

to cut public debt to 77% of GDP from a record 96% by 2021

a bit of a grin for me when I look at the top three:

Japan 253%

Italy 131%

USA 105%