Tax hike causes unrest in Jordan
Mass protests over the IMF-driven austerity plan toppled the PM
7 June, 2018Street protests in Jordan continued last week despite the replacement of the country's prime minister and a call by Jordan's King Abdullah for a review of the controversial draft tax law, viewed as unfair to the poor and the middle class. The bill was in line with the IMF-backed austerity measures aimed at reducing the country's $37bn debt. Public resentment has been building since bread subsidies were ended and the general sales tax hiked steeply earlier this year under the IMF-driven plan. Jordan's government, which has seen seven different prime ministers in the last 10 years, has been pursuing economic reforms as part of a $723m three-year line of credit from the IMF. Last time the country, considered as a calm monarchy, was rocked by unrest was in 2012, when the IMF told the government to lift gasoline prices.New PM Omar Razzaz posted the conciliatory message on Twitter last Tuesday saying he will work with different parties on a fair tax system. Razzaz is a Harvard-educated economist who served with the World Bank in both Washington and the region. Despite his promise for reforms, several thousand people marched near the prime minister's office for a seventh straight day on Wednesday. Shops and pharmacies were closed in Jordan's capital as some unions pressed ahead with a strike not only against tax hikes but also against cutting subsidies for bread, fuel prices hike and large corruption. Some businesses in Amman were shut and hospital employees joined the protests.Police blocked the roads to stop the sea of demonstrators with their picket signs from reaching the Cabinet office. Later on Thursday, the official Petra news agency reported that the tax hikes could be shelved, saying that lawmakers asked the king's permission to hold an exceptional session, with a majority demanding the changes be withdrawn. “I believe they have time to amend the law, to withdraw the law and make a new one that is more of a middle ground between the public demands and what the government wants,” Mufleh Aqel, a prominent Jordanian banker, told Reuters. Sandwiched between several geopolitical conflicts and overwhelmed by a burgeoning population of refugees from Syria, Iraq and the occupied Palestinian territories, Jordan already has a 20% poverty rate, and youth unemployment hovers at around 40%. The country, which has a peace treaty with Israel, has navigated years of instability at its borders, which hit its economy. Moreover, Jordan, which is poor in resources, hosts close to 700,000 Syrian refugees. Many analysts note that the turmoil is about more than the IMF's loan programme. According to Dina Rezk, a professor of Middle East Politics at the University of Reading, the recent protests are a symptom of a much more existential problem for Jordan. While a crucial security ally for the West, a beacon of stability in the region and a top recipient of US foreign aid, it is “particularly vulnerable to unrest in Palestine and global austerity initiatives,” Rezk said.