
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.







