Government's policy statement: remarks on economy

03-01-2021 02:13 PM

Ammon News - Speaking about the government’s response to the economic and financial fallout of the coronavirus crisis, the premier noted that his government launched last month measures and programs at a cost of JD320 million to provide support and protection for sectors, businesses and individuals hard hit by the crisis.

He also said that the government expanded social protection to include an additional 1,000 families and subsidized the wages of 180,000 workers in around 20,000 businesses, in addition to establishing a JD20-million risk fund to help tourist establishments sustain their businesses.

He indicated that the government upped the National Aid Fund’s appropriations to a total of JD250 million for 2021 to enable the fund provide assistance to more than 300,000 needy households.

The prime minister explained that the programs and measures launched by the government to provide social protection and support affected sectors are consistent with its plans to introduce economic and financial structural reforms aimed at improving the business environment and stimulating economic growth.

The government will launch the 2021-2024 executive program which includes a comprehensive approach needed to deal with various the economic, social, financial and political issues in accordance with national priorities in various sectors, Khasawneh said, adding that the program will cover 24 developmental sectors and will be implemented by more than 100 government agencies, ministries, official and civil institutions and private sector institutions.

This program, the prime minister explained, aims to boost the competitiveness of productive sectors, in order to achieve acceptable economic growth rates that contribute to reducing unemployment rates, in addition to increasing the flow of local and foreign investments, increasing national exports, improving the purchasing power of citizens by strengthening social protection, and employing digital economy to enhance economic growth.

The government will work to direct foreign aid toward national priorities related to filling financing gaps and implementing priority development programs and projects in accordance with the Executive Development Program, Khasawneh added.

The prime minister said the coronavirus crisis pushed economic growth in 2020 down to -3 percent, however, he added, the economy is projected to rebound and grow by +2.5 percent, indicating that the government drafted the 2021 budget based on these projections.

The prime minister highlighted the main figures of the 2021 general budget, noting that public revenues are estimated at JD7.8 billion, including JD7.2 in local revenue and JD577 in foreign grants. He indicated that total expenditures are estimated at JD9.9 billion while the post-grant and foreign aid budget deficit is forecast at about JD2 billion.

Khasawneh pointed out that nominal deficit will retreat from 5.7 percent of GDP in 2020 to about 3.7 percent of the projected GDP for 2021, reflecting public finance reforms.

The premier pledged that his government will facilitate and simplify tax and customs procedures, along with improving tax and customs collection, combating tax and customs avoidance and evasion, which, he said, a crime against the homeland and citizens.

He also indicated that the government will address and patch up tax-related distortions and gaps by developing the legislative framework, noting that tenders will be floated for the introduction of the national billing and taxation systems.

The government will activate international cooperation to combat tax evasion by exchanging information and making use of agreements to prevent double taxation, and it will also take the necessary legislative and administrative measures to unify tax administration, in addition to unifying customs administration for all regions of the Kingdom, Khasawneh added.

The prime minister renewed the government’s commitment to reinstating a pay hike to the salaries of public sector employees, which was suspended in mid-2020.

The prime minister explained that weak economic growth is the underlying cause of unemployment, budget deficit and public debt, indicating that propelling growth is not limited to attract foreign capital or improving the business-doing environment, but can by spurred by increasing the productivity of human resources, pursuing an optimal use of knowledge and technology, and enhancing good governance and the rule of law.

"However, at the same time, the government, in light of limited resources and employment prospects, is looking forward to a real partnership with the private sector, and is looking forward to enabling foreign and domestic investment, as key entry points to job creation and employment, and to reduce poverty and unemployment rates," Khasawneh said.

He announced that the government is "seriously" considering establishing a sovereign investment fund, to which the government and foreign investment funds participate, and which is open to Jordanian expatriates, stressing that the proposed fund will be subject to all standards of good governance, oversight and transparency, and all necessary measures to achieve the desired and intended goals of stimulating local and foreign investment in the best way.

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