By Xinhua
Amman : The expected liberalization of petroleum prices, coupled with several other factors, will deal a heavy blow to around 45 percent of Jordanians, the Jordan Times said on Monday.
Participants in a seminar organized by the Freedom Committee of the Engineers’ Association thought that the liberalization of petroleum prices will trigger an unprecedented wave of price increases, which will add to the hardships of 40 to 50 percent of Jordanians, Wasef Azar, former minister of industry and trade and ex-general manager of Jordan Ahli Bank was quoted as saying.
The Jordanian government will lift all subsidies, including the petroleum subsidies, according to the draft 2008 budget endorsed by the Parliament, which may result in price hikes all over the kingdom.
To help the people cope with the ramifications of lifting subsidies, the government announced in December that it will establish a social safety net and raise the salaries of civil servants, army personnel, school teachers, judges, university faculties as well as pensioners to offset the effects of price hikes.
However, some economists and financial experts described the government’s safety net and other cushioning tools as “a dose for tolerance and not as relief for those who will be severely affected by the anticipated increase in prices.”
Wasef Azar even sees the government’s decision to increase wages to offset the price rises as a measure that will negatively affect the economy. As such, the former minister said it is important to raise productivity levels to counter the negative effect of wage hikes.
It is also important for the government to tackle tax evasion and ensure that dues are paid fairly and transparently, in line with financial disclosure regulations, he added.
Mohammad Al Bashir, former president of the Auditors’ Association, also called for overhauling tax regulations and giving income tax more weight than the sales tax. Moreover, he urged the government to cut expenditures and warned against being smug about foreign aid and grants, which could encourage waste, corruption and unnecessary spending.
According to Public Works and Housing Minister Sahl Majali, “maintaining the present subsidies means that the amount allocated for fuel will be between JD 700 million (about 987 million U.S. dollars) and JD 950 million (about 1,339.5 dollars), which is a massive amount that even rich countries can not shoulder.”
He added that if fuel subsidies are not removed, Jordan risks harsh living conditions and economic consequences similar to those in 1989 when the intervention of the World Bank and the International Monetary Fund was necessitated. (1 Jordanian dinar is equivalent to 1.41 dollars)