There must be hope

[Yusuf Mansur]

One has given up on a people-responsive or enlightened government, as well as on Parliament being the voice of a nation.

The most educated and innovative nation in MENA is being held back by the very institutions that are supposed to work for it as enablers. That is why people had no sympathy for the dissolved Parliament, and do not really seem to care if the current Cabinet simply goes home, for it can hardly see what is wrong, does nothing to alleviate what everybody sees as wrong and, when back from vacation, it springs into the wrong set of policy actions.

For example, the Council of Ministers may now want to push as a temporary law a new piece of legislation that is likely to further stifle an important piece of Jordan’s economic puzzle (the real estate sector), which has been long recognised as the quickest to jumpstart the economy. The draft legislation will make it more difficult for companies to build and borrow (they cannot now, anyway), and whatever gains have been achieved so far will be foregone.

Cries to resuscitate this sector seem to have fallen on deaf ears. The Central Bank is doing nothing and the government formed a committee. The sector’s companies are growing more desperate for credit. The private banks themselves are losing money. Foreigners are buying our real estate assets cheaply.

What next?

If this sector collapses, there will be an economic meltdown. Jordanians hold the majority of their wealth in real estate, lands inherited from great, great grandfathers. This long viewed (rightly or wrongly) coffer and retirement cache will be worthless.

Another example is the Income Tax Law that was rejected by Parliament. I called it the “rich folks’ tax law” and fought it ardently. I believe Parliament made some changes to it, but the government withdrew it and may now pass it unchanged as a temporary law.

A new tax law will not solve Jordan’s problems now. Taxes take a year to have an effect, by which time the economy may recover or worsen. A person who is unemployed cannot and will not pay taxes - this is common sense. An economy that is spiralling downwards in terms of production and productivity cannot be fixed with a tax law. Tax instruments are long- to medium-term instruments.

More recently, Jordan signed a free trade agreement with Turkey, even though the Chamber of Industry, whose board is now dissolved, pending elections, had fought it for the past two years. A study for the chamber (on which this writer worked as well) proved that signing it was equivalent to giving Turkey a signed cheque of $450 million, money that neither the government nor the industrial sector can afford. Even if the study, which was rigorous and withstood analytical criticism, was wrong in estimating the damages, what does a country like Jordan, with a trade deficit with the world, gain from further trade liberalisation with a fast-growing industrial country? If the government wants to fix its revenue structure, because of dwindling income, why is it curtailing customs revenues further by signing another free trade agreement?

The now forgotten public-private partnership so lauded in past years needs to be reinvigorated. Doesn’t Jordan come first?

There is need for a sense of what Jordan is, for recognition of achievements, a desire to improve, a return to competitiveness. There must be hope that an enlightened government will one day march in step with an enlightened leadership and people.

JordanTimes, 8 December 2009