Jordan Times
Tuesday, February 21, 2006
Gov't committed
to economic reforms — Judeh
AMMAN (Petra) — The government is committed to lifting subsidies on fuel
derivatives and other commodities, Government Spokesperson Nasser Judeh said on
Monday.
Responding to a question at his weekly press conference on whether the
government would follow a plan set by the previous Cabinet and raise the prices
of fuel derivatives as of this March, Judeh said the government had made it
clear during the Lower House discussions over the budget earlier this month that
it was committed to implementing the economic programme.
The government told deputies last week that it plans to reduce subsidies on
fuel, bread, animal fodder and other items as part of a medium-term plan to
reduce public spending.
The revenues generated will be used for development projects, according to the
government.
Judeh told reporters that it is not reasonable for every incoming government to
amend the economic policies set by its predecessors.
“Now there is continuity in policies and an established economic approach,”
Judeh said, adding that a rise in commodity prices and services is expected as a
result of the fuel subsidy removal.
Judeh stopped short of specifying the date when the decision will take effect.
However, Prime Minister Marouf Bakhit told the House, which endorsed the budget
last week, that the government would consult with the Lower House before it
imposes an increase on fuel prices in order to find a mechanism to ease the
pressure on limited income citizens.
Judeh said the government had received directives from His Majesty King Abdullah
to design programmes that go side-by-side with any fuel price hike to ease the
burden on the segments of society directly affected by the price increases.
The government of former premier Adnan Badran set a three-stage plan to
completely lift fuel subsidy by 2007 in order to reduce the budget deficit,
which has been impacted by the rise of international oil prices.
The first hike in fuel prices under this plan was decided in September last year
when prices rose between five and 22 per cent, depending on the type of the
derivative.
According to government figures, the budget deficit for 2006 is JD450 million,
5.4 per cent of GDP.
The budget deficit before grants is JD676 million, 6.9 per cent of GDP.
The government has set a budget of JD3.45 billion for 2006, 43.7 per cent of
GDP, compared to JD3.33 billion, 40.4 per cent of GDP, in 2005.