AMMAN, June 5, (Agencies): Jordan’s King Abdullah tasked a former World Bank economist on Tuesday with forming a new government and called for broad talks on a planned income tax law that has provoked the country’s biggest protests in years. The king appointed Harvard-educated Omar al-Razzaz after accepting Hani Mulki’s resignation as prime minister, attempting to defuse public anger over IMF-driven reforms. Reports on Monday of Razzaz’s impending appointment did not entirely quell the protests.
About 2,000 people rallied overnight demanding the tax law be withdrawn. Price increases, after a steep rise in general sales tax and the abolition of bread subsidies earlier this year, have brought thousands of people onto the streets of Amman and other parts of Jordan in recent days.
This has shaken the US ally which has remained stable through years of regional turmoil. The king said the new cabinet should review the tax system and immediately start a dialogue over the draft income tax law, which protesters have staunchly opposed. He said political parties, unions and civil society groups must take part in the talks. “Your government’s priority must be to launch the potential of the Jordanian economy … to restore its ability for growth and providing job opportunities,” he said in a letter designating Razzaz.
The monarch, widely seen as a unifying force, addressed the protesters’ demands. He said price rises had placed a burden on Jordanians and called for improving services, blaming regional instability for hampering the sluggish economy.
Razzaz served with the World Bank in both Washington and the Mideast region, and was education minister in the outgoing government. Officials said he had been an opponent of reforms that hurt the poor. His appointment nevertheless sends a message to foreign donors that Jordan will press ahead with reforms, though in a gradual way, they said.
The International Monetary Fund (IMF) approved a three-year arrangement with Jordan in 2016 to support economic and financial reform, aiming to lower public debt and encourage structural change. Mulki’s government said it needed more revenue for public services, arguing that the tax reforms would reduce social disparities by placing a heavier burden on high earners and leaving lower-paid state workers relatively unscathed. But public anger has grown over some of the measures driven by the IMF.
There was also unrest in 2012 when the IMF told the government to lift gasoline prices. Jordan has backed down on reforms in the past, fearing a social backlash. Until Mulki took office, governments had repeatedly pushed back the increase in bread prices and tax changes. Kuwait, meanwhile, voiced willingness to support Jordan economically through increased investments and concessional loans, reports Jordantimes. com.
The message was delivered to His Majesty King Abdullah on Monday by visiting Deputy Prime Minister and Minister of State for Cabinet Affairs Anas Al Saleh . The Kuwaiti official conveyed to His Majesty the greetings of the Amir of Kuwait Sheikh Sabah Al Ahmad Al Sabah, who also affirmed Kuwaits support for Jordan under various circumstances and its constant readiness to support the kingdom in all fields, according to a Royal Court statement. Al Saleh said that Kuwait is currently considering more Kuwaiti investments in the kingdom and extending concessional loans to support growth-stimulating projects.
His Majesty expressed Jordans appreciation for Kuwait’s historically supportive stands led by Sheikh Sabah, stressing the strength of brotherly relations between the two countries and the keenness to elevate them to the highest levels in the service of their common interests. The meeting was attended by the Chief of the Royal Court Fayez Tarawneh, Adviser to His MajestyKing Abdullah and the Director of His Majestys office Manar Dabbas, Adviser to His Majesty for Economic Affairs Mohammad Eses, and the Kuwaiti ambassador in Amman.