Jordan faces a dual dilemma that is centered on the slowdown in real growth (between 2 per cent and 3 per cent) and the rise in public debt to levels exceeding GDP. This means that any growth below the interest rate on the debt is insufficient to reduce the debt or create jobs. Furthermore, focusing on reducing spending at this stage, rather than improving its quality, is a misguided approach. Debt cannot be reduced through austerity alone; rather, it is achieved by raising real productive growth through innovation, smart public investment, and productive partnerships. Real growth must exceed borrowing costs, and a moderate and sustainable primary surplus must be achieved. Knowing this, one observes that the Prime Minister Jaafar Hassan Cabinet is ushering a shift in the state's economic philosophy, moving from viewing the government as a market corrector to the view that the government is a “market creator” by making Jordan a mission-driven economy.
How does the state transition towards a mission-driven economy? By adopting the following actions. The state defines major national tasks around which it mobilises the public and private sectors, universities, and international finance. These tasks are not 'sectoral projects,' but rather ambitious national challenges that stimulate innovation and create new markets, such as achieving water security and sustainable renewable energy, digitizing government services and education, doubling service and creative exports, and empowering women and youth in the labor market.
Such a pioneering state does not merely fix market failures or see its mission as amending legislation, an endless activity in our economic history, but rather innovates and takes risks to create added value instead of accumulating it. Policies generate real economic and social value, not immediate financial gains, and are based on justice. As a lever for growth through investment in education (every country that has succeeded in achieving development has improved its education system), health (a healthy body is essential for educational development and the production of a sound mind), equality (to stimulate and sustain both demand and productivity), and establishing smart and transparent contractual partnerships between the state and the private sector.
Among these tasks are 'achieving water and energy security' through partnerships in desalination, solar energy, and gas; restructuring procurement agreements; a green investment fund; and legislation to incentivize innovation in efficiency, aiming to reduce water and energy costs by 30 per cent within 10 years. Another task is 'the digital economy and productivity,' aiming to digitize 100 per cent of government and commercial services within five years through digital accelerators, unified payment platforms, technology business incubators, and training 50,000 young people in artificial intelligence and data analytics skills. There is the task of 'developing creative industries and national identity' by doubling the contribution of cultural and creative industries to 10 per cent of GDP, establishing creative zones in Amman and Petra, funding digital and film production, integrating culture and heritage into tourism, and establishing venture capital funds. The 'Women's Participation and Social Justice' mission aims to increase women's participation in the labor market from 15 per cent to 35 per cent by granting tax breaks to companies that support female employment, providing childcare facilities in workplaces, and funding women's projects and cultural transformation campaigns. The 'Export Boost and Regional Growth' mission aims to increase service and industrial exports by 50 per cent within seven years by facilitating trade with neighboring countries, developing logistics and industrial zones, and facilitating export financing. A bold local initiative is needed to support the funding of these activities.
Yes, the state can lead innovation if it directs funding rationally, focusing on national industrial projects such as the electronics industry, as South Korea did; improving technical education as a cornerstone for innovation and high-value jobs, as Finland did after the 1990s crisis by focusing on education and technology; establishing a flexible and highly accountable executive apparatus, as Singapore did; and investing in clean energy and smart tourism, as Portugal did.
As for the macroeconomy, it is essential to redirect fiscal policy spending from current expenditures to high-multiplier investments (smart infrastructure, education, innovation) and achieve a primary surplus. A moderate upward trend (up to 2 per cent of GDP by 2028) without stifling growth, with funding directed towards national projects through national investment funds, partnerships with Arab sovereign wealth funds, and concessional financing from development institutions.
Also, in the macroeconomic and monetary policy sphere, maintaining the exchange rate and credit stability will continue to preserve confidence in the national currency. The approach has served the stability of the entire economy. Targeted financing will be directed towards small and medium-sized productive sectors within specific projects (water, energy, digitalization), and debt instruments will be diversified (green bonds, development sukuk) to attract low-cost, long-term financing.
Institutionally, governance based on transparency and accountability must be adopted through the publication of partnership agreements and performance indicators. Funding should be linked to performance, with support based on a reward system for achievement in each project. The social return on investment (SROI) should be adopted, taking into account the employment of Jordanian workers, poverty reduction, and achievement of sustainable development, rather than focusing solely on accounting returns. The government is not a company, nor is it managed as one, and its income source is taxes, not profit.
Jordan faces a dual dilemma that is centered on the slowdown in real growth (between 2 per cent and 3 per cent) and the rise in public debt to levels exceeding GDP. This means that any growth below the interest rate on the debt is insufficient to reduce the debt or create jobs. Furthermore, focusing on reducing spending at this stage, rather than improving its quality, is a misguided approach. Debt cannot be reduced through austerity alone; rather, it is achieved by raising real productive growth through innovation, smart public investment, and productive partnerships. Real growth must exceed borrowing costs, and a moderate and sustainable primary surplus must be achieved. Knowing this, one observes that the Prime Minister Jaafar Hassan Cabinet is ushering a shift in the state's economic philosophy, moving from viewing the government as a market corrector to the view that the government is a “market creator” by making Jordan a mission-driven economy.
How does the state transition towards a mission-driven economy? By adopting the following actions. The state defines major national tasks around which it mobilises the public and private sectors, universities, and international finance. These tasks are not 'sectoral projects,' but rather ambitious national challenges that stimulate innovation and create new markets, such as achieving water security and sustainable renewable energy, digitizing government services and education, doubling service and creative exports, and empowering women and youth in the labor market.
Such a pioneering state does not merely fix market failures or see its mission as amending legislation, an endless activity in our economic history, but rather innovates and takes risks to create added value instead of accumulating it. Policies generate real economic and social value, not immediate financial gains, and are based on justice. As a lever for growth through investment in education (every country that has succeeded in achieving development has improved its education system), health (a healthy body is essential for educational development and the production of a sound mind), equality (to stimulate and sustain both demand and productivity), and establishing smart and transparent contractual partnerships between the state and the private sector.
Among these tasks are 'achieving water and energy security' through partnerships in desalination, solar energy, and gas; restructuring procurement agreements; a green investment fund; and legislation to incentivize innovation in efficiency, aiming to reduce water and energy costs by 30 per cent within 10 years. Another task is 'the digital economy and productivity,' aiming to digitize 100 per cent of government and commercial services within five years through digital accelerators, unified payment platforms, technology business incubators, and training 50,000 young people in artificial intelligence and data analytics skills. There is the task of 'developing creative industries and national identity' by doubling the contribution of cultural and creative industries to 10 per cent of GDP, establishing creative zones in Amman and Petra, funding digital and film production, integrating culture and heritage into tourism, and establishing venture capital funds. The 'Women's Participation and Social Justice' mission aims to increase women's participation in the labor market from 15 per cent to 35 per cent by granting tax breaks to companies that support female employment, providing childcare facilities in workplaces, and funding women's projects and cultural transformation campaigns. The 'Export Boost and Regional Growth' mission aims to increase service and industrial exports by 50 per cent within seven years by facilitating trade with neighboring countries, developing logistics and industrial zones, and facilitating export financing. A bold local initiative is needed to support the funding of these activities.
Yes, the state can lead innovation if it directs funding rationally, focusing on national industrial projects such as the electronics industry, as South Korea did; improving technical education as a cornerstone for innovation and high-value jobs, as Finland did after the 1990s crisis by focusing on education and technology; establishing a flexible and highly accountable executive apparatus, as Singapore did; and investing in clean energy and smart tourism, as Portugal did.
As for the macroeconomy, it is essential to redirect fiscal policy spending from current expenditures to high-multiplier investments (smart infrastructure, education, innovation) and achieve a primary surplus. A moderate upward trend (up to 2 per cent of GDP by 2028) without stifling growth, with funding directed towards national projects through national investment funds, partnerships with Arab sovereign wealth funds, and concessional financing from development institutions.
Also, in the macroeconomic and monetary policy sphere, maintaining the exchange rate and credit stability will continue to preserve confidence in the national currency. The approach has served the stability of the entire economy. Targeted financing will be directed towards small and medium-sized productive sectors within specific projects (water, energy, digitalization), and debt instruments will be diversified (green bonds, development sukuk) to attract low-cost, long-term financing.
Institutionally, governance based on transparency and accountability must be adopted through the publication of partnership agreements and performance indicators. Funding should be linked to performance, with support based on a reward system for achievement in each project. The social return on investment (SROI) should be adopted, taking into account the employment of Jordanian workers, poverty reduction, and achievement of sustainable development, rather than focusing solely on accounting returns. The government is not a company, nor is it managed as one, and its income source is taxes, not profit.
Jordan faces a dual dilemma that is centered on the slowdown in real growth (between 2 per cent and 3 per cent) and the rise in public debt to levels exceeding GDP. This means that any growth below the interest rate on the debt is insufficient to reduce the debt or create jobs. Furthermore, focusing on reducing spending at this stage, rather than improving its quality, is a misguided approach. Debt cannot be reduced through austerity alone; rather, it is achieved by raising real productive growth through innovation, smart public investment, and productive partnerships. Real growth must exceed borrowing costs, and a moderate and sustainable primary surplus must be achieved. Knowing this, one observes that the Prime Minister Jaafar Hassan Cabinet is ushering a shift in the state's economic philosophy, moving from viewing the government as a market corrector to the view that the government is a “market creator” by making Jordan a mission-driven economy.
How does the state transition towards a mission-driven economy? By adopting the following actions. The state defines major national tasks around which it mobilises the public and private sectors, universities, and international finance. These tasks are not 'sectoral projects,' but rather ambitious national challenges that stimulate innovation and create new markets, such as achieving water security and sustainable renewable energy, digitizing government services and education, doubling service and creative exports, and empowering women and youth in the labor market.
Such a pioneering state does not merely fix market failures or see its mission as amending legislation, an endless activity in our economic history, but rather innovates and takes risks to create added value instead of accumulating it. Policies generate real economic and social value, not immediate financial gains, and are based on justice. As a lever for growth through investment in education (every country that has succeeded in achieving development has improved its education system), health (a healthy body is essential for educational development and the production of a sound mind), equality (to stimulate and sustain both demand and productivity), and establishing smart and transparent contractual partnerships between the state and the private sector.
Among these tasks are 'achieving water and energy security' through partnerships in desalination, solar energy, and gas; restructuring procurement agreements; a green investment fund; and legislation to incentivize innovation in efficiency, aiming to reduce water and energy costs by 30 per cent within 10 years. Another task is 'the digital economy and productivity,' aiming to digitize 100 per cent of government and commercial services within five years through digital accelerators, unified payment platforms, technology business incubators, and training 50,000 young people in artificial intelligence and data analytics skills. There is the task of 'developing creative industries and national identity' by doubling the contribution of cultural and creative industries to 10 per cent of GDP, establishing creative zones in Amman and Petra, funding digital and film production, integrating culture and heritage into tourism, and establishing venture capital funds. The 'Women's Participation and Social Justice' mission aims to increase women's participation in the labor market from 15 per cent to 35 per cent by granting tax breaks to companies that support female employment, providing childcare facilities in workplaces, and funding women's projects and cultural transformation campaigns. The 'Export Boost and Regional Growth' mission aims to increase service and industrial exports by 50 per cent within seven years by facilitating trade with neighboring countries, developing logistics and industrial zones, and facilitating export financing. A bold local initiative is needed to support the funding of these activities.
Yes, the state can lead innovation if it directs funding rationally, focusing on national industrial projects such as the electronics industry, as South Korea did; improving technical education as a cornerstone for innovation and high-value jobs, as Finland did after the 1990s crisis by focusing on education and technology; establishing a flexible and highly accountable executive apparatus, as Singapore did; and investing in clean energy and smart tourism, as Portugal did.
As for the macroeconomy, it is essential to redirect fiscal policy spending from current expenditures to high-multiplier investments (smart infrastructure, education, innovation) and achieve a primary surplus. A moderate upward trend (up to 2 per cent of GDP by 2028) without stifling growth, with funding directed towards national projects through national investment funds, partnerships with Arab sovereign wealth funds, and concessional financing from development institutions.
Also, in the macroeconomic and monetary policy sphere, maintaining the exchange rate and credit stability will continue to preserve confidence in the national currency. The approach has served the stability of the entire economy. Targeted financing will be directed towards small and medium-sized productive sectors within specific projects (water, energy, digitalization), and debt instruments will be diversified (green bonds, development sukuk) to attract low-cost, long-term financing.
Institutionally, governance based on transparency and accountability must be adopted through the publication of partnership agreements and performance indicators. Funding should be linked to performance, with support based on a reward system for achievement in each project. The social return on investment (SROI) should be adopted, taking into account the employment of Jordanian workers, poverty reduction, and achievement of sustainable development, rather than focusing solely on accounting returns. The government is not a company, nor is it managed as one, and its income source is taxes, not profit.
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