Jordan Times
Friday, February 27, 2004
Senate passes 2004 budget
AMMAN (JT) — The Senate on Thursday unanimously voted in favour of the JD2.76 billion 2004 state budget as referred to it by the Lower House which, on Feb. 19, endorsed the bill by a sweeping majority of 77 MPs out of the 97 deputies, who attended the session.Addressing the senators after the vote, Prime Minister Faisal Fayez pledged to keep up the policy of dialogue, openness and transparency of his government, highlighting the vitality of government-Parliament interaction.
Finance Minister Mohammad Abu Hammour replied to comments made by senators on the draft law, explaining the effects of the regional turbulences on the national economy and the government belt-tightening plans aimed at reducing public expenditure.
Abu Hammour stressed that the government will intensify its efforts this year to increase reliance on local resources.
The finance chief anticipated five per cent growth rate in 2004 based on an eight per cent increase in exports and seven per cent in imports.
The loss of the JD300 million Baghdad oil grant, the sharp drop in exports to Iraq which absorbed 20 per cent of the Kingdom's total exports, and the JD72 million government subsidy on fuel oil have negatively affected the national economy.
As a result, the government was left with no choice but to decide on a package of economic adjustment measures involving a hike in the prices of fuel derivatives and higher sales tax.
In the report presented by the Senate Legal and Economic Committee regarding the draft law, the panel urged the government to take “swift and effective measures to ease the negative effects of regional developments.”
The report highlighted the need for the government to continue its economic and fiscal corrective plans to attain the envisioned growth rate of five per cent, keep inflation rate within the range of three per cent, build up the Kingdom's foreign currency reserves and keep the budget deficit below four per cent,
The committee stressed the need to increase exports and to implement megaproject like the Disi Water Conveyance Project and the Jordan-Syria Wihda Dam.
The committee urged the government to work for easing the foreign debt, addressing the budget deficit and increasing the gross domestic product to five per cent a year until 2007 when Jordan will begin paying its foreign debts.
The highest concern, according to the committee, was the problems of poverty and unemployment.
Jordan should rely less on external sources for oil and electricity, they said.
Foreign aid is expected to total JD427 million, 26 per cent less than last year's JD640 million. Inflation in 2004 is seen at three per cent, a 0.7 per cent rise from last year, due to the high exchange rate in foreign currencies against the dollar.
Current expenditures are projected at JD2.133 billion and domestic revenues at JD1.825 billion.