International American Council

International American Council
Middle East and North Africa

Jordan combating budget deficit with power price hikes

The Hashemite Kingdom of Jordan is attempting to deal with a $2 billion fiscal budget deficit by raising the prices of its electric power in reaction to Egypt’s faltering reliability in energy production.

Historically, Jordan has acquired some 80 percent of its electricity from Egyptian natural gas, but various attacks on the pipelines have led to the Jordanian government taking drastic measures, raising the price of electricity by 15 percent.

Between the increased costs of energy, the decision to double taxes on cell phones earlier this year, decreased trade avenues through Syria, and the never-ceasing influx of refugees from Syria, the economic situation for ordinary Jordanians is becoming less and less stable, and many are worried that the raised prices will be what causes Jordanian citizens to lash out. “People, including government employees, will resort to strikes and protests and the government will be forced to borrow more or impose more taxes,” says Yusuf Mansur, former head of Jordan’s Agency for Economic Development.

Jordan has been anxiously watched for signs of increased civil strife since it became one of the primary destinations for refugees from the Syrian civil war a few years ago. With its internal grievances piling up and the external stressor of refugees refusing to let up, many believe that if widespread violence would erupt any time in Jordan, it would erupt now.

Indeed, some violence did erupt last Friday in Amman, with a brawl involving 20 men leaving 2 dead and 8 injured. A spokesperson for Amman’s police force, Amer Sartawi, dismissed the brawl as merely being the work of known thugs working to settle a personal score.

However, this brawl may not be just an isolated incident in a large metropolitan area, but rather a symptom of discontent and violence brewing across Jordan. Jordan’s monarch, Abdullah Hashimi, made a speech earlier this summer in which he took special care to denounce violence, and particularly tribal violence, as un-Jordanian. In addition to brawls like the one seen in Amman on Friday and tribal violence, violence centered at universities and along the border with Syria have both increased recently. Along with the influx of Syrian refugees are Jordanian militants who have not been in their home countries for years, but who are returning from fighting abroad with new revolutionary fervor, which may stir up similar fervor in the Jordanian citizens they will rejoin.

The origin of the violence stretching across so many centers of Jordanian society is the strained economy, which the aforementioned energy price raises were designed by the government to help, but which may hurt ordinary Jordanians in the short term. Some are worried that the damaged economy will not heal in time to temper the violence, leading to the violence becoming even more legitimized and widespread.

As Musa Shtewi, head of the Center for Strategic Studies at the University of Jordan, says, “People see violence on a daily basis, in the news and they see how countries resort to violence to resolve their disputes, giving it legitimacy.”

By Laura Gates 

Source: Al Arabiya, Wall Street Journal, Bloomberg

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