The government yesterday announced that there will be no new hike in oil prices and decided to delay any potential increase till after the end of the winter season prompting the resignation of Deputy Prime Minister and Minister of Finance Ziad Fariz.
Mr. Fariz who was described by some parliament members as the "World Bank's son" pressed for price rises to save the state’s finances. When his call fell dead on the government's ears he had no choice but to submit his resignation. Apparently he did not want his name to be associated with the financial disasters that will follow the government's popular decision.
In numbers, the 2007 budget deficit was earlier forecast to reach JD 385 million($600 million) but with the price of oil in the international market jumping to over $70 per barrel and yesterday decision to delay any hike in prices till the end of the winter season the deficit is expected to rise to JD710 million(over $1 billion)this year! This deficit is expected to be covered by new loans that future generations have to deal with them at one point.
In a defense for the government's decision, the 7% inflation rate is a little bit high and the poor class in the country with the upcoming cold season, Ramadan holy month and the start of the new school year is in a financially strained place and might not be able to survive a new hike in oil prices. However, since it is the upper and middle classes members who consume most of the oil bill in this country , then I believe that there could have been a better decision to help the poor class without hurting the economy.
Instead, the the government who suffered lately of a series of embarrassments that started with the water and shawarma poisoning, a tensed political atmosphere especially with the IAF and finally the fishy municipal elections seem to be more concerned on scoring some points in its approval rating over doing the right thing.
12 comments:
It is the rich and the middle class members who consume the oil bill. That is funny because i do not think that we have a middle class in Jordan these days. it is either you are rich or poor.
Anon, the talk about the disapperance of the middle class has been going on for the last thirty years. Actually, the middle class is growing in Jordan. Most families even ten years could not afford buying cars or owning their own houses which is not the case today.
The main reason the government change it's decision because they don;t want to see a repeat of 1989 popular bread revolt that swept the country.
As far as some Arab reports saying he did resigned because he OPPOSES the bill!
I don know otherwise he is "World Bank's son"
Whatever he try to do as "World Bank's son" how he press for price rise if he had no support for his bill?
So who are the other members who support him and for what bases they justify this bill?
Anyway as common practice to the countries that are heavily relay on IMF this practice common as conditioned with loans taken any governmental support for services or food to their nation.
This not just in Jordan its any where. Sadly to say the people who will suffer from it and the aid money will be in the government hand, how wisely they use that money that the question.
BTW, is it Jordan get her oil from Saudis and Iraq with less prices than international quota?
Thanks
Say
US subsidies to cotton producers are contributing to mass poverty in some of the world’s poorest countries, according to a report published today by the international development agency Oxfam.
Government support to the 25,000 domestic cotton producers in the US totals $3.9 billion annually, more than three times the US foreign assistance to Africa’s 500 million people.
http://www.oxfam.org/en/news/pressreleases2002/pr020927_cotton.htm
Shifaa did you the above?
This in US the support their farmers against others, in our countries we instructed to do the opposite? Why?
Say
Say,
Apparantely, all the other members in the cabinet sided with delaying the hike in price and for obvious reasons. It is popular to stand with the poor and the ordinary citizens.
Regarding the oil. After the departure of Saddam we do not get any free oil or any prefered treatmen from Iraq so the kingdom pays top dollars for the barrel. They are negotiating a 10% prefered treatment with the Iraqi government but who knows what will come out of that deal.
Regarding the USA. Jordan does not have the financial capacity to support its farmers or citizens. If we have then I am for it.
Alardoni Alhur,
I am not sure if that was the main reason to delay the hike. It might play a role though.
لحكومة الاردنية تستعد للتزود بالنفط العراقي وكميات اضافية من الغاز المصري
http://www.kuna.net.kw/home/Story.aspx?Language=ar&DSNO=1013821
Shifaa,
the real problem is that the price of every thing else will go up following the hike in the oil price. THat is the real disastor.
# العراق سيصدر 100 الف برميل نفط يوميا للاردن
http://www.nahrain.com/
Shifaa, I think you miss my point here, what I meant is while US supporting her farmers/companies which I believe the right thing I have no problem with that, in same time IMF which US have final say and control main polices for it is indorsing its loan to countries like Jordan and other poor countries in Africa to lift off their support even very small comparing to their striving economy.
Say
وكان وزير الطاقة والثروة المعدنية الدكتور خالد الشريدة اعلن ان الحكومة ستباشر نقل النفط العراقي من كركوك من خلال صهاريج الشركة العراقية - الاردنية للنقل البري في غضون ايام.
واكد مسؤولون وخبراء ان اسطول الصهاريج الخاصة بنقل نفط كركوك ومنطقة التحميل والتفريغ للكميات الموردة على جاهزية عالية لبدء عمليات النقل من الجانب العراقي.
واستبعد مصدر مسؤول ان تحقق المملكة وفرا جراء استيراد النفط العراقي باسعار تفضيلية مشيرا الى انه سيغطي جزءا من الدعم المقدر للمحروقات.
وقال المصدر الذي طلب عدم نشر اسمه ان متوسط كلفة برميل النفط بلغ خلال النصف الاول من العام الحالي 70 دولارا ما يعني ان الخزينة تكبدت فرق السعر المذكور عن المقدر في الموازنة عند 60 دولارا كدعم للمحروقات بقيمة 180 مليون دولار خلال الفترة ذاتها.
وحال عدم وجود مخصص لدعم المحروقات في الموازنة دون ظهور مقدار الدعم المقدم خلال النصف الاول من العام الحالي الا ان الخزينة ستتحمل فروقات السعر بحسب المصدر على اعتبار ان كلفة كل دولار زيادة على سعر برميل النفط عن مستوى السعر التعادلي تحمل الخزينة 36 مليون دولار سنويا.
(النهاية)
م ي / غ س
كونا261054 جمت اغو 07
http://www.kuna.net.kw/home/Story.aspx?Language=ar&DSNO=1014449
say
It is simple calculation, the government used to get oil for free or half price (Average $8 a Barrel) and used to sell it for the poor people of Jordan for $8 for every 20 liter back then (price of the whole barrel). The barrel of oil produces 100 liter gas and another 90 liter between get fuel and engine oil and asphalt. The point is they used to make a lot of money no one knows where this money went????????
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