Pinching Piasters When And Where It Counts

With the approved budget expanding by leaps and bounds this year, the deficit is on the rise. The lifting subsidies may end up helping the government save a decent amount of money (close to $1.5 billion according to officials) but then the likely question becomes: what good is all that money if it’s outmatched by expenditure? It’s like a pocket with a hole in it. Government expenditure is considered way too high for a country like Jordan, with the Heritage Foundation’s 2008 Index of Economic Freedom placing government expenditure at nearly 40% of the GDP. Sometimes more spending can be healthy for an economy, as long as its on the right things: education for example. Instead, we have a huge JD301 million “social safety net”, which is primarily a way to avoid any type of criticism, particularly from the poorest people in the country, by issuing handouts. More expenditure on the wrong things.

The idea is also dependent on basic arithmetic. The hope that the lifting of fuel subsidies will save amount “X”, and after subtracting the insignificant amount “Y” that is the social safety net, amount “Z” will be a surplus. It’s an interesting experiment that comes at the cost of the average Jordanian’s pockets. My argument is based on the government’s inability to historically save money, or pinch piasters when and where it counts. In other words, more money will translate to more wasteful spending.

One of the main reasons Jordanians are really feeling the pinch has been due to this over-dependency on subsidies, chiefly fuel subsidies and certain staple commodities. You really can’t help but wonder what the government was doing for well over a decade when it enjoyed cheap oil from Iraq.

Corruption, mismanagement, wasteful spending and inefficiencies of the public sector have put that hole in the pocket and not much will change until that system is repaired. With so many people working in and for the government why are so many ministers, officials, MP’s, Royal Court directors and diplomats still allowed to fill up their gas for free with those absurd coupon books they’re given? Why are people still allowed to spend on what we don’t have? There seems to be way too much wasteful spending for such a small country to handle. Even on the ground realities are very obvious to everyone. Here’s another example.

There is an old joke about the farmer who charges a guy $50 to pull his car out of a muddy hole, telling him it’s the tenth time he’s had to do it today. So the driver says “Wow, when do you have time to plow your land, at night!?”. And the farmer says: “Oh no, nighttime is when I fill the hole with water”.

Every time there’s bad weather in Jordan – and I’ve been told there’s a whole season called “winter” – there seems to be so much damage to infrastructure. Thousands of potholes destroy the roads across the country, especially in Amman. The GAM doesn’t seem to invest enough in their upkeep, because after almost every major storm the exact same potholes show up. They then spend the next few weeks repairing them only to have them come back again. We are literally filling the same holes several times a year, and I’m guessing someone is making some money off it somewhere.

If that’s not a metaphor for wasteful spending, I don’t know what is.


  • EXACTLY the thought I keep having… What ever happened to all the money that was practically poured into the government in the decade or more of highly subsidized oil from neighbouring states.

    But luckily, the government is not a single person, and lets hope newer and more “honest” officials will get the helm … someday!

  • There was a major tunnel constructed close to where I live, it was inaugurated just a month or so ago after being late for like three months.

    After the last snow “storm,” the whole street is just full of holes and cracks and is pretty uneven. Where is the contractor’s responsibility? Why isn’t he brought down to the street and on tv to apologize to tax payers? Why isn’t he put on trial? He probably knows some hot shot and that’s probably how he got the deal in the first place, that hot shot made his money out of it, the contractor made his money out of it, and now our cars are getting broken because of all that corruption.

  • I will say it over and over, it is the ranch mentality. And regarding the free oil, you can ask the kuwaities, they will give you a reason..

    Some new stuff from here and there:
    1-The aqaba free zone sold land to investors for 2500 JDS a dunum, 6 years later it is worth 2 million JDs.
    2-Potash company(Which was sold) pay 90 piasters a dunum as rent.And last year it posted almost 150 million JDs in profit(When it was under govenrment control it posted losses).
    3-The sad story of the phosphate company, which was given away almost for free..
    3-Disi land lords pay 10 piasters a dunum as rent.
    4-The elimination of the fines(half a billion dollars) on iraqi refugees as a “Makromeh”, and who are we to critisize a makromeh!(By the way, and before people start jumping, the refugees themselves shouldn’t pay the fines, it is their corrupt government).

    But hey, don’t you live in peace and harmony? You should kiss the hand that provided this rare commodity for you! (I am being sarcastic, and playing the role saleh gallab and tareg masarwah and baggeyet shellet el sa7eejeh)..


  • We need a much smaller governement. I don’t think people will live any better than they do now but they won’t continue to get screwed continuously. The screweing has reached astronomical levels.

  • Make no mistake about it,The economic problems will never be solved by the so called “free” market economy, I would argue ,it is the Free marketers and their philosophy if you can call that philosophy that contribute to increase in poverty and desperation that our people face.
    the word Safety net doest not even exist in their dictionary and comprehension,only profit ,profit and more profit.

  • mohanned: “I am being sarcastic, and playing the role saleh gallab and tareg masarwah and baggeyet shellet el sa7eejeh)”

    looool that cracked me up good 😀

    Hareega: “The screweing has reached astronomical levels.” man, you are one of the most quotable people i know 😀

    Sam: thanks for the link

    poor arab: i can’t say i agree with you completely, nor do i disagree with you entirely. the economic theory behind the free market is complex and subject to its application. it’s worked much better than its alternative, but when it comes to the third world replication of first world models, there have been tremendous set backs, some of which we’ve seen in jodan.

  • I wanted to ask — how are the wages now in Jordan? Last I heard, a married couple could both work as teachers and STILL be considered below the “poverty” level. What a mess. When we lived there, it seemed like the prices kept going up, but no one’s salary did.

  • “it’s worked much better than its alternative, but when it comes to the third world replication of first world models, there have been tremendous set backs, ”
    Allow me to disagree, which alternative you are talking about,almost the entire the world is capitalist and almost the entire world is miserably poor capitalist Indonesia is miserably poor ,capitalist India is miserable poor as capitalist El Salvador’,as capitalist Thailand’s is misrebly poor and getting poore,or as capitalist Filipene,even capitalist United States is getting poor and miserable, so what is the alternative you are talking about Mr Nassem ?

Your Two Piasters: