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Does US aid contribute to solving Jordan’s economic problems? .. An expert answers

Amman Today

publish date 2022-09-24 09:31:14

Amman – Compass

Economic expert Hossam Ayesh said in his statements to “compass“The Jordanian-American memorandum of understanding comes in the context of the Jordanian-American relations that have been going on for about sixty to seventy years, and in all these years, the American military, economic, and even food and other aid has been continuous and constant, and its value has been increasing period after time.

Ayesh pointed out that “in all cases, this did not lead to things being better compared to what we want or expect, but at the same time it cannot be denied that it contributed either to financing the budget deficit or to guaranteeing loans or aid in the form of loans that Jordan obtained from what was He lowers interest rates and that was considered a kind of aid.”

“Not to mention the continuous aid according to the agreements, the last of which was one billion and 450 million dollars over the next seven years, which is the highest value compared to the past years or periods,” as he put it.

Ayesh added: On this basis, this aid plays a role in alleviating the budget deficit and plays a role in debt relief, and the term “mitigation” is important, but it does not prevent the budget deficit and does not prevent the continuation of obtaining debt for reasons related to the way we run our economy and our economic model. .

He pointed out: An economic model whose spending is much higher than its revenues, including the aid provided to it, and therefore this reflects a budget deficit, and this deficit continues and grows even after grants and aid, and this is important, meaning the deficit in the current budget before grants and aid with independent institutions with the government’s deficit approaching Three billion dinars after aid and grants, approaching 2 billion dinars, slightly less than one billion and 800 million.

He stressed that “this deficit, with the presence of this aid, is financed by obtaining debt. I mean that the aid that reaches Jordan from the United States, the Gulf countries, or the European countries will not stop the budget deficit, reduce it, prevent it, or reduce the access to debt; But it eases a little bit at times, because Jordan enjoys special treatment, whether from the World Bank, the International Fund, or the various countries of the world that are satisfied with Jordan’s regional and local policies, and the image that it appears and presents as a model for other Arab countries.”

economic and military aid

In his interview with Al-Basala, Ayesh explained: This is in the general context. As for the issue of US aid, there is no doubt that it is economic in the large part, and military in the other part, and some of it is provided directly to the public budget, and some of it goes as appropriations to obtain new weapons, meaning that Jordan funds access to weapons and some third party supplies through USAID, the American Development Agency, which provides it through various civil society institutions, carrying out its activities in the fields of energy, water, youth, education, women, democracy and human rights..etc.

However, he added: “It is therefore very difficult to say that this volume of aid is cumulative, and we are talking about a period for it to reach ten billion, but on the ground annually it amounts to less than one and a half billion dollars. Unfortunately, Jordan’s needs are greater and its expenditures are increasing, as expressed by the general budget.”

He stressed that “every year expenditures rise, but the aid remains constant, and it may have an effect in the first year, but in subsequent years and with the increase in expenditures, which are expenditures that need a comprehensive review as we review and as the government is strict in obtaining its revenues during what it says is the prevention of evasion. And tax avoidance, to be precise, has to be strict in how it spends and allocates it.”

Ayesh said: Because it is not permissible for this large gap between expenditures and revenues to remain and turn into debts, and debts are transformed at their high costs in the 2022 budget. The allocations for interests are one billion and 420 million, which is higher than the allocations of the Ministry of Education, or the Ministry of Health, or the Ministry of Social Development and Social Protection, and higher. From any allocations to any Jordanian ministry.

He stressed by saying: This is, in my opinion, something that affects the outcome on services, reduces them and reduces their quality, or rather prevents the real expansion of service provision, or even control of the budget deficit, which constantly turns into debt.

Raise the slogan of self-reliance

On the paradox between the continuous aid and debts that Jordan receives and raising the slogan of self-reliance, Ayesh stressed that there is a misleading in terms of meaning, saying: Our Jordanian economy is based on consumption equations more than productivity, and any economy that increases or decreases in consumption to production, its exports and imports express In addition, our imports are two and a half times our exports, which means that we consume more than we produce, and this is a clear equation.

He pointed out that “this does not mean that we reduce consumption, but rather that we increase and improve production, and this requires different policies and programs, this is on the one hand, and on the other hand, when you think of raising the slogan of self-reliance is completely different from what the government says about the meaning of this slogan. “.

He said that the government, for it, is self-reliance, meaning the volume of revenues relative to expenditures, how much it covers the revenues from the expenditures, and the revenues it obtains from taxes, fees, and costs paid by the people and the economy, which are 8.1 billion dinars, local revenues for 2022 with aid are 8.9 billion dinars, and these Calculate how much it covers from current expenses.

Ayesh pointed out that the government says that the revenues cover the expenses for this year, and they said that it has improved and increased from previous years or the past two years, that it will reach 85% to cover current expenses, and self-reliance means how much the government will get revenues to cover current expenses, and the remaining 15% need to Aid or debt, not to mention capital expenditures, which would not be covered by such a slogan raised by the government.

In his statements to Al-Basala, the economist concluded: “Therefore, the slogan of self-reliance is a misleading slogan in terms of the meaning we understand. The government understands this meaning that the amount of revenue it obtains in order to cover its expenses and nothing more.”

American support to meet exceptional challenges

Deputy Prime Minister and Minister of Foreign Affairs and Expatriate Affairs Ayman Safadi and US Secretary of State Anthony Blinken signed a new memorandum of understanding on the Jordanian-US strategic relations that frames the financial aid that the United States intends to provide to Jordan for the next seven years.

This is the fourth memorandum between the two countries, according to which the United States will provide $1.45 billion in aid annually, starting from fiscal year 2023 and ending in fiscal year 2029, after extensive talks held by the two ministers on ways to strengthen the strategic partnership between them.

US President Joe Biden had announced the US intention to sign this initiative during the summit meeting that King Abdullah II held with President Biden on the sidelines of the Jeddah Summit for Security and Development last July.

A joint statement, issued after the signing of the memorandum at the US State Department in Washington, said that the memorandum of understanding, as a unique bilateral instrument, represents an American commitment to supporting Jordan’s stability and reflects the strategic partnership between the two countries.


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Jordan News

Source : اخبار الاردن

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