2013
Jordan Parliamentary Elections
15
Economic Challenges
In Jordan, economic issues can quickly affect the political discourse when citizens are exposed to
economic shocks. The most serious example occurred in November 2012, when Jordanians rioted
in response to the government’s decision to raise prices on basic petroleum products.
The
domestic economic environment remains fragile, and coupled with the slow democratic reform
process could still be the cause of future unrest.
An official unemployment rate of 12.5 percent
high levels of poverty, multi-year budget shortfalls
and economic pressures stemming from the flow of refugees from Syria have put Jordan in dire
economic straits. With few natural resources and a small industrial base, primary contributors to the
economy include tourism, expatriate worker remittances and the service sector. In addition, Jordan
is heavily dependent on aid from abroad. In 2012, the government expected to receive $2.6 billion
in foreign assistance from multiple donors, most notably the Gulf countries, the European Union
and the U.S. It should be noted that this level of aid is lower than in the previous years, adding to
the general economic woes of the country. Jordan’s debt has also increased noticeably in the past
three years due to higher electricity, gas and other energy prices in international markets, reaching
$18.9 billion in 2011. This brought the debt to gross domestic product (GDP) ratio up to 72
percent, exceeding the 60 percent legally permissible in the constitution.
Jordan’s budget deficit in
2012 was nearly eight percent of GDP, a dramatic increase over the 5.7 percent deficit in 2011.
In order to address the country’s growing deficit, the government signed a deal with the
International Monetary Fund (IMF) in August 2012. The agreement mandates a reduction in public
spending, specifically on subsidies, in exchange for a bill of economic health from the IMF which
will enable Jordan to borrow money on international markets. In a controversial decision connected
to the IMF conditions, the Jordanian government lifted subsidies on oil derivatives in November
2012, raising the prices on a range of fuel products.
Prime Minister Abdullah Ensour justified the
harsh measures, saying that the state was headed for a budget shortfall of up to U.S. $3.5 billion in
2012, mostly as a result of high oil prices and disruption of Egyptian gas supplies. The upside of the
difficult decision was that, if the government will be able to stick to a fiscal reform program largely
focused on removing energy subsidies and reducing budget deficits, the IMF predicted that Jordan’s
economy could be stabilized by 2015 with a projected growth rate of 4.5 percent.
Demographic Breakdown
Jordan’s demographics present unique challenges to political representation for Palestinian-
Jordanians, youth, women and minority groups. In particular, the status of Palestinian-Jordanian
representation in parliament is especially sensitive, given their history in the country.
5
Reuters
. “One dead in Jordan riots, more protests planned” 15 November 2012.
6
The Jordan Times.
“Unemployment figures inaccurate — Katamine” 18 March 2013.
.
7
Petra News.
“PM: Government to refrain from any surprise decision on fuel subsidy, open to all opinions” 11 March
2012. <
>.
8
The Jordan Times.
“IMF top official optimistic about Jordan economic trajectory” 21 March 2013.
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