Jordan Times
Friday, April 9, 2004
'Third Generation of Reforms' will mark next stage of Socio-Economic Transformation Plan
By Rami Abdelrahman
AMMAN — The next stage of the Socio-Economic Transformation Plan will introduce
the ambitious “Third Generation of Reforms,” which deals with educational,
legislative, administrative, financial and judicial amendments in a “modern”
perspective aiming to realise a knowledge-based economy.
The 2004-2006 programme sets a six per cent “real and sustainable” growth rate
target which, according to Planning and International Cooperation Minister
Bassem Awadallah, will raise the average gross domestic product (GDP) per capita
to 3.6 per cent.
In a lecture to University of Jordan students on Thursday, Awadallah said by
2006 the government would achieve more financial stability by controlling the
budget's deficit.
“We are hoping to control spending and increase earnings, so deficit will be
reduced to 2.8 per cent of GDP,” the minister indicated.
“Overall debt will not exceed 78 per cent of the country's GDP by 2006, as the
internal debt will be reduced to 53.4 per cent of GDP, while the external debt
will be cut down to 24.5 of GDP,” he said. During 2003, local and foreign debt
climbed to JD7 billion, representing 101.1 per cent of GDP.
Awadallah stressed that the government will be encouraging domestic savings to
reach seven per cent of GDP by 2006, whereas exports' share of GDP will reach up
to 47 per cent of GDP by then.
“We will also be increasing reliance on domestic monetary resources,” he added,
noting that Jordanian workers' productivity should be increased by 1.2 to 1.5
per cent.
Despite analysts' criticism of the JD peg to the US dollar and its effect on
increasing inflation as the dollar weakens, the minister joined the minister of
finance and the Central Bank governor in their promise to keep the inflation
level as low as two per cent recorded last year.
However, the government will be working on keeping “the positive performance” of
the expenditures balance in the next two years.
“The programme aims at achieving a surplus in the current account by
decelerating the trade balance deficit, keeping the surplus in the services
balance, slowing down the capital account's deficit, attracting more foreign
investments, and working on achieving more debt swaps,” the minister said,
giving no figures in this regard.
Awadallah expressed hopes that the government will be able to build more balance
between economic and human resources, while boosting national efforts to attack
the country's main difficulties hampering development: Poverty and unemployment.
“Women will play a bigger role in the development process, and we will try to
reinforce self-dependence in finding more employment opportunities,” he added,
noting that the plan also includes invigorating the cooperative sector's role in
developing local communities.
For 2004, the plan's available funds amount to JD287.7 million, approximately
JD160 million of which are in additional financing with the balance being the
amount carried forward from 2003.
Awadallah explained that the additional financing will be received from the
United States Agency for International Development (USAID) which will extend
JD133.1 million for the 2004 plan's budget. The Japanese government will provide
JD22 million, while other donors will donate JD4.194 million in grants to help
the plan achieve the 2004 targets.
The plan allocates 34 per cent of the total funds (JD53.55 million) for the
central part of the country, including the Amman Governorate. Northern parts
will take 14 per cent (JD21.84 million), while the impoverished south will take
20 per cent (JD23.422 million).
During the next year, JD244.155 million will be spent on development projects
currently waiting for funding. This allocation will be secured from new
forthcoming grants.
Awadallah said the financial requirements of the plan would reach JD3,094
million throughout the next three years. He expects JD2,245.3 million to be
secured leaving a JD849.6 million gap in finances.