Jordan is facing considerable economic challenges which require structural reform. The government, however, appears to be attempting to circumvent such reform by prescribing inadequate solutions and temporary measures in an attempt to elicit a quick fix. Perhaps it fears provoking popular outrage in the midst of a dire economic situation, but the haphazard approach has neither limited the public backlash nor provided a sufficient response to Jordan’s economic imbalance.
On May 24, the government announced new electricity rates which were 23% to 125% higher than the rates to date, raising electricity prices to, on average, 89 fils/kWh. In response to the anticipated demonstrations, the government was quick to highlight – and assure Jordanians – that these rates would impact only specific sectors within the country, including banking, telecommunications, water, hotel, ports, large industry (mining) and street lights (municipal).
The government insisted that these increases were fair and would shield citizens and small and medium sized enterprises (SMEs) that would have otherwise been unfairly impacted. It also stressed that the rise in the price of 95-Octane fuel (which it announced almost concurrently) to JD1/litre from JD0.795/litre would similarly target specific sectors and exempt citizens.
These tenuous justifications have barely staved off swelling opposition. Consumers and exempted sectors not immediately impacted by the price hikes will nonetheless almost certainly be affected by the rising prices of commodities and services. Sectors that face the brunt of the price increase will invariably have to cut their own costs and reduce employment.
The public reaction was reminiscent of the 1989 Jordanian uprisings ↑ – April 1989 protests in South Jordan against economic hardships which ultimately caused martial law to be lifted - with the added virtual dimension. Over the past two weeks, Jordanian blogs and social networks have been filled with angry protestations and accusations against government actions. These criticisms further swelled when the government announced additional taxes on alcohol and tobacco, with citizens quipping that the government was taxing their last consolation.
Facilitated by the internet, these protests were widespread, both geographically and demographically. Unlike the 1989 riots, they were not centred in Jordan’s southern governorates but were widespread across the country. Neither were they limited to low earning citizens but rather they transcended income brackets.
Most importantly, they sprang off a yearlong struggle which has been calling for reform and change.
There is no denying that the government has an urgent need to tackle the economic challenges Jordan is facing. Specifically, it needs to rationalise the discrepancy between its costing and pricing of power generation; even after these increases, the price of electricity remains less than half of the National Electricity Company’s (NEPCO) generation cost.
Nonetheless, the price hikes were clearly not perceived by Jordanians as the right approach to deal with these underlying economic issues. Despite their tangible impact, they were actually viewed by many as insufficient, ill-informed or wrongly targeted. Alternative strategies such as the overhauling of the taxation system to introduce tax brackets were immediately put forward and debated in the mainstream media.
The government’s attempt to underplay the impact of these price hikes served simply to fuel resentment against the new policies and feed suspicions of corruption. Jordanian citizens might have been more adaptable to understanding the rationale behind price rises if they were coupled with an effort to achieve a more transparent and just form of governance. In the absence of this, discourse emerging from the protests is likely to continue to reflect a deeply held perception that ending corruption and holding embezzlers accountable will generate far more income for the government than these price hikes ever could.
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