Jordan: 'Gov't might lift subsidies' |
|
Text Size 
AMMAN - The government has not yet decided to lift subsidy on gas cylinders, pending a final decision on a bundle of austerity and other measures designed to address a challenging budget deficit.
Speaking separately to The Jordan Times on condition of anonymity yesterday, two senior government officials did not rule out resorting to the "budget assumptions", which entail "painful and unpopular decisions", but insisted such decisions have not been taken yet and will be studied thoroughly before the Cabinet finalises its plan.
They agreed that "the country is facing harsh economic conditions as the state budget deficit has reached an unprecedented figure."
The deficit hit JD1.5 billion in 2009 and is projected at JD685 million in 2010.
Several local press reports said the government would lift subsidies on cooking gas and other tax-exempted essential items to balance the state finances.
"These are not decisions yet; they are simply budget assumptions that we are considering," one of the two officials pointed out.
On Wednesday, Prime Minister Samir Rifai said during a speech delivered at the Columbia University Middle East Research Centre that tough budgetary challenges are currently facing the government and difficult choices need to be made in order to manage the budget and address citizens' "urgent quality of life needs".
Over the past week, the government took decisions to raise the special tax on cellular phone calls from 4 per cent to 8 per cent and increase taxes on tobacco products and alcoholic beverages.
Tayseer Smadi, CEO of the Islamic International Arab Bank, told The Jordan Times yesterday that the government has no other option but to reconsider taxation and subsidy policies.
"The national debt crossed the red line after it topped 60 per cent of the GDP and the budget deficit reached unprecedented limits, up to more than a billion. This represents a serious threat to the local financial and economic situation and the government has to react fast before its too late," said Smadi, who is also a former planning and international cooperation minister.
"There will be a negative impact on the public's living standards for sure. But it is a step that has to be taken so that all share the responsibility," he noted.
The economist said the government, in light of the difficult economic conditions it is facing, has to focus on quality measures rather than quantity when taking decisions, adding that tax policies have to be implemented in a way that ensures equality and justice, taking into account national interests as a top priority.
Salameh Darawi, an economist and a columnist at Al Arab Al Yawm, said that the budget revenues were based on assumptions, or scenarios based on raising taxes on citizens and repealing of tax exemptions on essential items. He said such measures are expected to bring more than JD70 million in revenues.
Darawi added that an additional JD50 million is expected to be generated if the government decided to double the special tax on octane 90- and 95-octane gas, noting that 80 per cent of the Kingdom's production of these fuels is consumed by the citizens.
"The government would be unable to overcome the consequences of the growing deficit without resorting to the pockets of citizens in the short term," he said.
Spending control policies require the government to take decisions such as integration of ministries and bodies of like-work, abiding by the allocated funds in the budget and should carefully consider floating tenders for new projects, the economist said, adding that the ministries and various government departments have to rearrange the scale of spending priorities within the financial limits.
By Hani Hazaimeh © Jordan Times 2010
x
DISCLAIMER
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Community Comments (0) - 
Comment on this article 
Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
Loading ...
Zawya Comment Policy:
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
Community Buzz
Stories
Companies
Most viewed companies by Community in the last 24 hrs
| Company Name | Country | Industry |
| Consolidated Contractors Company | Overseas | Construction and Design |
| Saudi Binladin Group | Saudi Arabia | Construction and Design |
| Saudi Telecom | Saudi Arabia | Telecommunications Services |
| Saudi Electricity Company | Saudi Arabia | Electric Utilities |
| Dubai Electricity and Water Authority | UAE | Electric Utilities |
| Hyundai Engineering and Construction Company - Saudi Arabia | Saudi Arabia | Construction and Design |
| National Oil Corporation - Libya | Libya | Oil |
| Ministry of Health - Saudi Arabia | Saudi Arabia | Ministries and Municipalities |
| Roads and Transport Authority - Dubai | UAE | Regulatory and Administrative Bodies |
| Maroc Télécom | Morocco | Telecommunications Services |
Projects
Most viewed projects by Community in the last 24 hrs
| Project Name | Country | Sector |
| ADNOC/ConocoPhillips - Sour Gas Fields Development - Shah Field | UAE | Oil and Gas |
| ENEC - Nuclear Power Plant | UAE | Power and Water |
| Takreer - Ruwais Refinery Expansion | UAE | Oil and Gas |
| SATORP - Jubail Refinery and Petrochemical Complex | Saudi Arabia | Oil and Gas |
| Aramco/Dow Chemical - Ras Tanura Integrated Refinery and Petrochemicals Complex | Saudi Arabia | Oil and Gas |
| Abu Dhabi Ports Company - Khalifa Port and Industrial Zone (KPIZ) | UAE | Infrastructure |
| IGD - Gasco - Habshan 5 Gas Processing Plant | UAE | Oil and Gas |
| Abu Dhabi DOT - Abu Dhabi Metro | UAE | Infrastructure |
| Emirates Aluminium (EMAL) - Smelter Complex - Phase 1 | UAE | Industry |
| Qatar Foundation - Sidra Medical and Research Center | Qatar | Real Estate |