At the end of 2016, a $5 billion dollar foreign aid package expired and now Jordan’s economy is seeing the consequences. In an effort to reduce the Jordanian budget deficit of 827 million Jordanian dollars, or $1.2 billion, the Jordanian government approved the 2017 budget which seeks to raise $643 million in taxes and tariffs on food items, fuel, commodities, and services. This budget is in response to an agreement with the International Monetary Fund (IMF) that provided Jordan with access to $700 million in loans. In reaction to the newly approved budget and rising prices and taxes, public opinion of Jordan’s government has begun to turn largely unfavorable as protests have erupted across Jordan in recent weeks, ranging from the southern cities of Karak, Salt, Madaba, and Tafilah. The protesters are calling for the resignation of the Prime Minister Hani Mulki, saying “We are suffocated by the government’s continuous approach to solving economic conditions by turning to people’s pockets.”
A possible way to improve these economic issues without being too drastic would be for the Jordanian government to issue taxes on a more moderate level or to issue them with small increases over time. This would allow for the citizens of Jordan to properly prepare to pay the taxes, or it is possible that they would not even notice the new taxes if they’re increased slowly over time. Economically speaking there are a plethora of ways to bring about a decline in unemployment, such as lowering the minimum wage, increasing education and training for jobs, as well as cutting interest rates. Any of these, and a variety of other options, would help to increase employment in Jordan. There are also alternatives to reducing the budget deficit, mainly cutting government spending an areas that could survive without as much money being given to them.
Given the economic collapse of Venezuela within the past year and the subsequent protests, the government of Jordan must be cautious whilst attempting to combat the budget defecit and other economic issues, including an unemployment rate that is around 15.8 percent. If they continue to place taxes on their citizens without considering the possible consequences, there could be a massive public outcry in the form of protests and violence similar to those in Venezuela. Thus, the Jordanian government should consider alternatives to taxes in order to improve their economic situation, as this is indeed a delicate area.