This is quite an interesting story that’s been developing this week. Faris Sharaf, the now former governor of the Central Bank, handed in his resignation earlier this week after only 10 months on the job. Many are saying that his resignation of the ordinarily stable 5-year post was due to his rejection of the current state policy of fiscal appeasement. Unless you’ve been hiding under a rock, you’ve probably witnessed the out-of-control public spending the state has been pursuing in an attempt to quiet down the masses, which now amounts to tens of millions of dinars. While this spending, which to me is the equivalent of paying people off, has made some impact in the short run, it will do little if not exacerbate tensions in the long run – and in Jordan, long run is typically defined as “when the money runs out”.
…bankers and some officials say Sharaf was enraged by an appeasement policy adopted by the government to win over disgruntled public sector employees in the wake of Arab unrest that endangered the countryâ€™s financial and monetary stability.
Bankers say Sharaf, a highly respected financial expert who had senior posts in the banking and financial industry, has increasingly voiced privately his alarm at the governmentâ€™s expansionary fiscal policy…Economists and bankers say Sharaf criticized a fiscal policy that saw government revenue shrinking and unable to cover rising current expenditure for security and a bloated bureaucracy whose salaries eat up most of the countryâ€™s $8.98 billion budget.
…Sharaf was worried policymakersâ€™ efforts to resort to higher levels of domestic borrowing from banks and abroad, to finance growing social needs and the budget deficit, could derail growth and seriously jeopardize the economyâ€™s ability to recover from sharp contraction, bankers close to him said. [source]
A bit of fuel was added to the fire when Faris Sharaf’s mother, Leila Sharaf, resigned from her post in the Senate the very next day, stating that she will not be part of a “corrupted government”. Leila claims her son was “removed” for attempting to combat corruption and also voiced her displeasure over the way her son was “removed” from office, claiming that the bank was surrounded by armed guards who supposedly were there to keep him from entering.
It seems that Faris’s resignation may strike a chord. While he is widely noted for being the right man for the job (a rare feat in Jordanian politics) his reasons for resigning are based largely on assumptions. However, the resignation of his mother, someone whose name still carries significant political weight, seems to validate these assumptions. If true, then Faris needs to speak out.
Jordanian officials who are privy to inner workings of the government and suddenly leave because they either encountered too many obstacles from “the system” or were blocked for trying to “combat corruption”, need to speak out. The public has a right to know, and these institutions need to be exposed and disinfected, not have their issues swept under a rug, never to be heard of again. Give us reasons, give us names, give us cases, give us information. If there’s mismanagement in public expenditure, the people have the right to know. If there is a policy that will have adverse affects on our already fragile economic situation, we’d like to know that too.
While the Central Bank is often ignored in the political spectrum of things, it remains the beating heart of this country, and we have the right to know if it’s arteries are being clogged up. On Sunday, Sharaf said on Twitter that he would explain his move in due time. Let’s hope.
According to Prime Minister Bakhit, the resignation was due to a conflict Sharaf has had with his government. Bakhit claims Sharaf was independent with his decision making and did not believe in the government’s appeasement policy, which Bakhit calls “social security”, and includes investing in the governorates and “opening up factories there”. Bakhit calls Sharaf a “liberal” who essentially does not have any faith in the government’s pursuit of supporting small-to-medium businesses in the governorates, and is someone who has voiced his criticisms of the government in political circles. These are incredibly interesting allegations, which consist of all the right magic words for Jordanians, especially the hardliner East Bankers. It is essentially telling them “we wanted to give you guys more money, but Sharaf is part of the liberal elite who, as you know, never like to give you money in the first place.” It’s a good way to politically burn an official.
I am on the edge of my seat after reading this !!
from what i ve read so far, and i dont know the guy, Fares Sharaf seems like a good guy. i hope he will be able to drop the right domino piece when he can…
It’s interesting how things are developing. What amazes me the most is that Royal Family is involved since Faris Sharaf is a “Shareef”. Let’s see how it will go. Can’t wait!
At least he unlike many others has principles and refuses to kowtow to the government, and he didn’t budge so they try and oust him.
Rumour has it that there were certain elements who got angry at him for sending a case involving an Iraqi investor (under the allegations of money laundering) : You know Jordan Rumours abound!
Faris is hoepfully as good as he seems; however I would not say the same of Leila Sharaf, who has taken some wrong decisions for the sake of a previous, corrupt government. Interestingly the elite and corrupt are turning against each other !!?? it’s like there is war among the mob.
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I heard the reason he resigned was because of the money laundering case that he exposed a while back; apparently someone very powerful and international was connected to the frozen money. But regardless, he was fuming because of the ridiclous monetary policy that this government is following; which will take us to the abyss. Throwing money at unproductive government employees, and knowing that this a running cost for years, is a recipe for disaster. I don’t think people even realize how crazy this is. With a crushing debt and a bureacracy that is literally eating away 80% of our budget, the government is a ticking time bomb. We are also wasting money on lazy bums instead of investing in infrastructure and increase the productiveness of the private sector; which actually brings in tax money and liquidity into the economy. Its a worthwhile to note that Sharaf actually was the first guy who dictated that Banks had to provide SMEs with the same loan rates that they provide their best clients, and Bakheit claims that he is not supportive of SMEs. What complete idiocacy!
Faris Sharaf is not the first to discover mismanagement and corruption, most people already know that,if Faris does not explain what happened everyone will assume anyway he and his family are just part of the corrupt system. It’s time for transparency..
i’m curious to know why he is referred to as the “right man” for the job? from what i understand he is the only person in the history of jordan to hold this position without a PhD in economics. furthermore, he seems to have been parachuted into the bank with very little relevant experience – certainly not enough that would qualify him for being deputy of the bank then for heading it.
it seems to me that his removal was a result that of the same system that caused his appointment. patronage can be a double edge sword.
i’m not saying the process or rationale was right – only that he shouldn’t be seen as a victim in this case.
All respect to all those who post, but no – our GDP is much more than 6 billion. We export more than that 🙂
Faris Sharaf is very shrewd, smart, market savvy, and knew Jordanâ€™s economy well. He was a professional. Not the same, unfortunately, can be said about some of the members of government, members of parliament, or many of the employees of the both the government and private sector. Commenting on someoneâ€™s personal character, or badgering it in this case, when there is a conflict of professional opinion is outrght unjustified, unaccepted, and should be left to unprofessionals not prime ministers.
Up to this conflict, and as a Jordanian, I was all for Bakhit. After this fiasco, I do not think he is appropriate for the job of Prime Minister of Jordan.