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.