Budget Debate Shows Parliament’s Institutional Challenges

King Abdullah gave a speech on Sunday at the Mutah University Graduation. During this speech, one of the subjects that he discussed was domestic politics. He asserted that he wanted Jordan to develop an advanced parliamentary system, a goal which he said would take place over “successive parliamentary cycles.” Furthermore, he claimed that such a system would be “based on a parliamentary, partisan, and programme-based majority in tandem with a parliamentary minority that serves as constructive opposition and shadow government in the Lower House.” He says that he wants this to take place over several electoral cycles, but it is clear after the first few months of the new parliament that he was incorrect in his speech to criticize people who were skeptical about the success of recent political reforms.

But the way that Jordan’s parliament has handled the one of the most important recent political debates—the budget that just passed the lower house of parliament—shows that parliament has not conducted itself in a way indicative of progress. While the primary responsibility for this lack of progress is with the government, critics of its policies bear their share of responsibility as well.

During the debate, only 129 out of 150 MPs participated at the beginning and out of those 129, 37 of them withdrew. It must be noted that 47 MPs signed a memo that said that said the vote was rigged, and a few of them said that the Speaker, had rigged the vote. The leader of the Free Promise Bloc Amjad Majali tried to convince other MPs to withdraw. The end result was that the budget passed with 68 MPs voting in favor of it and 18 voting against it, which means that less than half of the lower house of parliament voted for Jordan’s temporary budget. The events during the debate have made few look good – the government was accused of heavy-handed tactics while its opponents on this vote mostly decided to accuse the Speaker of vote-rigging.

In an advanced parliamentary system this would not be what happened. The government, which would likely consist mostly of MPs, would propose the budget, and the opposition (or at least the largest opposition parties) would be organized into a shadow government (including a leader of the opposition) would potentially present a shadow budget, and the vote would be a key test of Ensour’s government, with the Prime Minister potentially having to resign if the vote was unsuccessful. The government and opposition would also consist of defined political groups or parties. As things stand now, the government engaged in what its opponents say was heavy-handed maneuvering to push it through while the opposition walked out. It is clear from this experience that the fundamental flaws in Jordan’s parliamentary system remain. Although there are steps to improve the system, King Abdullah has not been proactive enough in avoiding this crucial issues.

Could Ensour Lose the Confidence Vote?

The idea has been hinted at recently that the government faces an uphill battle winning the upcoming confidence vote in parliament, but it begs the question: what if Ensour cannot garner enough support to be able to survive a confidence vote? If he loses, whether it results in another Prime Minister being appointed or in an amended policy statement, the outcome will be partly due to factors beyond his control (such as the controversial proposal to reduce electricity price subsidies), but also due to his own seeming unwillingness to deal with parliament in terms that provide the lower house with adequate respect.

On Sundaym the Prime Minister presented his first policy statement to parliamen, and it is likely to receive a cold reception as parliament prepares for a vote of confidence in his government. Several political blocs have voiced their opposition to granting the government a vote of confidence, including the Watan bloc, the Democratic Gathering Bloc, and the Islamic Centrist Party. Particularly sensitive is the issue of electricity prices, with many MPs vowing to oppose the government in this vote unless it pledges that these prices will not be increased.

Ensour has also taken steps that can be seen as high-handed, that make it much less likely that he will receive the backing of MPs. Amer Al Sabaileh writes that reports indicate that ministers were notified of their appointment to the cabinet the day before it was announced. This was after it was already made public that the new cabinet would not include any MPs. This means that the MPs were excluded, were likely not adequately consulted, and the prospective candidates to head many of the ministries were not necessarily informed of their appointments beforehand. The reason for this approach is understandable – the parliament, as has been mentioned before is very fragmented. However, if MPs are ignored by the executive branch on questions such as this then they or their successors will continue to consider themselves to be part of an institution focused on distributing resources rather than passing of legislation and exercising oversight of the executive branch. There is another possibility that should be noted though – it is possible that Ensour excluded MPs in order to obtain their support by promising them appointments to the cabinet following the confidence vote.

If Ensour loses the confidence vote then it is likely that things will return to the drawing board with either an amended policy statement or another candidate for Prime Minister. The paradox that would arise if he loses the confidence vote is that parliament would be exercising its independence from the regime, but—if electricity prices are the main issue—would be doing so because MPs favor maintaining the policies that had been implemented by the regime for the last several decades. There is also another possibility of what might happen – that the regime, seeing that Ensour could lose, might call in the “backup units” – the intelligence agencies and the royal court – to ensure that he is able to survive the vote.

Whatever the scenario – whether Ensour loses, whether he is able to win backing from MPs by appointing some of them to the cabinet, or whether he is able to win through the support of the “backup units” the outcome is not a positive one for Jordan’s reform process.

Jordan’s New Cabinet: 18 ministers, No MPs

The composition of Jordan’s new cabinet was just announced, more than two months after the election. It consists of 19 members including Prime Minister Ensour, none of whom are Members of Parliament, though Ensour has said he would seek to include MPs in the cabinet in the next several months. Of the members of the outgoing cabinet, four of them retained their posts. The list of new Cabinet Ministers is as follows:

  1. Prime Minister and Defence: Abdullah Ensour
  2. Interior and Municipal Affairs: Hussein Majali (new, merged portfolio)
  3. Justice and Prime Ministry Affairs: Ahmad Ziadat (new, merged portfolio)
  4. Foreign Affairs: Nasser Judeh (unchanged)
  5. Trade, Industry, Communications, and Supply: Hatem Halawani (unchanged, merged portfolios)
  6. Finance: Ummaya Tukan (new)
  7. Planning, Tourism, and Antiquities: Ibrahim Saif (new)
  8. Education: Mohammad Wahash (new)
  9. Higher Education and Scientific Research: Amin Mahmud (new)
  10. Water and Agriculture: Hazem Nasser (new, merged portfolio)
  11. Information, Political Development and Parliamentary Affairs: Mohammad Momani (new, merged portfolios)
  12. Health and the Environment: Mjalli Mheilan (new, merged portfolio)
  13. Social Development: Reem Abu Hassan (new)
  14. Housing and Public Works: Walid Masri (new)
  15. Energy: Malek Kabariti (new)
  16. Labour and Transport: Nidal Qatamin (unchanged, merged portfolio)
  17. Islamic Affairs and Awqaf: Mohammad Qudah (new)
  18. Culture: Barakat Awajan (new)
  19. Public Sector Development: Khleif Khawaldeh (unchanged)

The list of Ministers includes nine newcomers and five who have previously served as Ministers, and among the newcomers is one woman, Reem Abu Hassan, who will be serving as Minister of Social Development. The most noteworthy holdover from the previous government is Nasser Judeh, who gains an additional responsiblity for Expatriate Affairs in addition to Foreign Affairs.

This list of cabinet ministers includes many changes in the individuals who are serving in the government but it seems much less likely that it will lead to corresponding changes in policy. Despite the number of changes, many of them, despite their status as first-time ministers have served in other posts within the government. Many of them have served in think tanks, some of which were affiliated with the Jordanian government although others served at think tanks that were independent.

For example, Interior Minister Awad Khliefat (who had been mentioned as a candidate for PM following the election in addition to Ensour) was replaced by Public Security Department Director Hussein Majali. Majali was director of the Public Security Department during protests against the fuel prices, and while those protests were ongoing claimed that two Syrian nationals had been paid to protest to increase the size of crowds. The payments, he said were made by a political party, which does not show an attitude that is favorable to the parties that the government says it wants to encourage.

Finance Minister Ummaya Tukan is another appointee who cannot be considered a newcomer after having served as head of the Central Bank of Jordan from 2001 to 2010. Ibrahim Saif, the new Minister of Planning is one of the more interesting additions, becoming a Minister after several years at the Carnegie Endowment for International Peace. He is the author or coauthor of numerous publications related to the Jordanian economy.

Malik Kabariti will become Minister for Energy, a crucial portfolio as the government considers steps that might be taken regarding electricity prices. Prior to his appointment to the cabinet he was Chairman of the Board at the National Electric Power Company

Interestingly, Reem Abu Hassan, the women’s right’s activist who is the only woman appointed to the cabinet is the daughter-in-law of Ahmed Obeidat, the head of the National Front for Reform, as she is married to his son Thamer. Prior to her appointment she was head of the National Council for Family Affairs, a government-supported think tank.

Mohamed Momani is another Minister who comes from an academic or think tank background, as he is a media figure and academic who joins the cabinet from the Jordan Media Institute, which offers an MA program in journalism. Barakat Ojwan joins the cabinet from private practice as a physician and activist in Maan. His involvement in the cabinet begs an interesting question – given that the cabinet excludes MPs currently does this mean that he would have been excluded as well had he won a national list seat that he ended up losing?

The Ministry of Supplies (under incumbent Minister Hatem Hawalani) was brought back under the new cabinet, and other changes included dividing Education with Higher Education, and combining Higher Education with Scientific Research

The new government faces many challenges, including those such as electricity prices that were left over by the previous government, which may have been one issue that caused the process of making the current cabinet to take such a long time. The way that it addresses these challenges will set a precedent for the future of both the policies that are implemented in Jordan and the way future governments are formed. The process of selecting a cabinet took more than two months this time. Next election, it would be extremely damaging to the Jordanian reform process if these types of delays were to happen again.

Could These Elections Bring Change After All?

On Wednesday, Jordan will hold a general election that has been touted by the regime as a step on the process to reform. What is actually going to happen is uncertain, but there are several different possibilities. One possibility is that the election produces a government that is chosen after token consultations with MPs allied with the government, and nothing will really change. There is also another, more hopeful possibility, which is that the election could lead to reform even if stalling was actually the regime’s original intention.

There is only one thing that seems certain – Prime Minister Ensour will tender his resignation the day after the election, and Jordan will have another new PM. This is likely because Ensour became the target of the protesters anger following the fuel price increases, but he is likely to remain in office as a caretaker while consultations take place, to select a PM who would be approved by a vote of confidence in the Lower House, even if the next PM is not necessarily an MP. It’s not clear who the next PM will be, but King Abdullah said in a recent discussion paper that if there was no clear majority in parliament then there would be consultations will all the relevant parliamentary blocs, and that the new PM would be approved by a vote of confidence in the lower house.

This is potentially a key change – in the current parliament having the PM be chosen by a vote of confidence is not significant immediately due to the election boycotts by much of the opposition. However, boycotts might not necessarily take place in future elections, and having the PM be approved in this manner is something that would be politically very difficult for the regime to reverse without losing further credibility.

What is most uncertain about the election is the makeup of the next parliament. With Islamists and many reformists boycotting, many leftist parties see a chance for political gains. However,  in a recent article on Al-Arabiya, one analyst, Mohamed Abu Rumman said that leftist parties are unlikely to win more than two to three seats in the next parliament. Part of the reason for this is their fragmentation. There are three lists mentioned in the article, including the People’s List and the Ploughmen’s Successor’s List which are all competing against each other for votes.  What is even less clear is the performance of the other parties – including those such as the National Current Party, which is headed by former Speaker Abdul Hadi Al Majali and the United National List which is headed by his relative Ayman Al-Majali, who both have conservative reputations, and could constitute a loyalist bloc in the next parliament.

With the election only two days away, much is uncertain. Perhaps the most important events of this election will be what happens after it takes place.

What the Electricity Price Increase Delay Means for the Election

The government implied once again that it is going to raise electricity prices, it just won’t happen in the next two weeks before the election. The cabinet stated that both price increases and power cuts are likely to happen, but that the decision to change (code word for “raise”) electricity rates would be made by the next cabinet after the election.

The way Jordan Times reports the decision is revealing. Their article about it says that there were two factors in this decision: “the caretaker government’s limited mandate-namely to oversee the January 23 parliamentary elections,” and “the ongoing impact of a decision to slash energy subsidies.” The decision to eliminate fuel subsidies was, of course, made by the caretaker government of Prime Minister Abdullah Ensour. That decision triggered widespread protests across Jordan. Yet when that decision was made the government did not consider it outside the scope of its mandate at the time. So what happened?

It seems to me that this decision is yet another act of stalling by a regime that has mastered the art. The Jordan Times article, along with another one that was published on December 28th, all but announces an impending electricity price increase. So why the delay? Most likely its because the regime doesn’t want people protesting a rate increase by boycotting the election. This way the regime will be able to get through the election and avoid the hard decisions about political reform that much longer.

Where have we seen this before?

A Closer Look at Ensour’s 10,000 Jobs Promise

On December 13th, Prime Minister Ensour announced an “ambitious and real” program to create 10,000 jobs. It’s interesting to note that the regime has broken enough promises that it needs to refer to this program as not only “ambitious” but “real” also, perhaps in order to distinguish it from an imaginary program, such as those reform programs that King Abdullah has mentioned repeatedly over the years.

There’s just one problem with this announcement – it simply isn’t going to happen. 10,000 jobs aren’t going to be created. If you look into the details of the announcement there’s simply no way that the actions Ensour has promised to take are going to create anywhere near that many employment opportunities. From his statement, it seems clear that Ensour’s jobs program has two components, first, the Governorates Development Fund (more on that below), which is intended to develop small or medium-scale projects in governorates throughout Jordan. The second component is the Governorates Executive Program, which has yet to be implemented. A look at the history of the Governorates Development Fund (GDF for short) reveals that it is in fact a prime example of broken promises, stalling, and everything else that has plagued Jordan in recent years.

The GDF since its announcement that has been ill-conceived and incompetently managed. In July 2011, King Abdullah announced its establishment during a visit to Salt. Nothing then happened until December 2011, when King Abdullah said that he would not accept any more delays in launching the fund, despite the fact that there had been a delay of several months and he has spoken of himself before as “the type of person that wants everything done yesterday.” There were still several more months of delays after this meeting.

The clearest description of it comes from the same December 2011 meeting, where Former Prime Minister Awn Khasawneh said that it would have a JD150 million budget, including JD25 million in 2012 and would be funded by both the state and private sector. The fund would support projects throughout Jordan, help citizens develop skills, and provide low-interest loans to participants. It would have been operated by numerous state institutions, which would likely have made further delays and perhaps corruption inevitable. For example, it would have involved the Cities and Villages Development Bank, which was so inefficient that that the government had to seek assistance from the World Bank and the French Development Agency to restructure it.

There were, indeed, more delays as the government abandoned this plan in July 2012 and decided to have JEDCO (Jordan Enterprise Development Corporation) operate the fund. How much has been done since then? The answer is not much when you examine the details. When Ensour said that JD3 million had been contributed, he presented it as part of a jobs program, but in fact he was really discussing the government funding, after more delays, the GDF’s JD 3 million share of JD12 million in projects that JEDCO approved in back in September. Indeed, the additional JD12 million to be contributed to the GDF consists of more projects that had already been endorsed by JEDCO, and the total amount (JD15 million) is short of the JD25 million that the government promised would be spent at the meeting in December 2011.

The government is presenting things that had already been planned for a long time as part of a new jobs program. This is really another attempt to make it seem like things are changing when in fact no reform is being made.

Royal Pardons Do Not Equal Reform or Democracy

Today King Abdullah ordered the release of 116 detainees who were arrested during the protests following the increase in fuel prices last month. The King did not however, pardon 13 inmates who were accused of “criminal conspiracy, vandalism, and illegal detention of people during the wave of riots.”

First of all, what’s with the “illegal detention” charge against some of those still being held? What are the specific accusations against them? Did they hold people while denying them medical care? Did they keep teenagers in custody? It’s in many ways an extremely ironic charge to be made by a regime that has done all of those things since Prime Minister Ensour announced the increase in fuel prices. What’s to say that these people still in detention did what they were accused of doing?

King Abdullah, by issuing this pardon is trying to do two things. First, he wants to appear moderate, willing to reconcile, as though he is making a compassionate gesture to those who (according to his and the regime’s logic only) have erred. Second, he is also trying once again to make a symbolic gesture by issuing a pardon while implementing no real reform. It’s from the same playbook as the decision to eliminate pensions for MPs or to prosecute a former intelligence chief. It’s designed to look good but nothing has really changed.

Jordan’s Economic Crisis

Prime Minister Abdullah Ensour was appointed by the King as a caretaker on October 11th, and will serve only until the upcoming parliamentary elections on January 23rd. That’s 134 days. He is (supposedly) the last PM to be appointed directly by the King, and parliament will chose his successor after the January 23rd elections. Of course, we’ve heard similar promises of reform from the government before, and nothing has really changed – but we will return to that subject later.

During his short time in office, Prime Minister Ensour has been faced with a serious issue: Jordan’s ongoing fuel crisis, caused by the JD2.2 billion (US $3.1 billion) annual bill that the government pays for fuel subsidies – an amount that is larger than Jordan’s budget deficit of JD1.2 billion. The government is considering implementing drastic measures to reduce its subsidy bill – including “alternate driving days” where people with even or odd license plates would be able to drive. Other measures under consideration include reducing expenses on streetlights, limiting the hours of electricity to public buildings, or even rolling blackouts. The bottom line is this – governments don’t do these things as routine measures to reduce power expenditures, they do it when they are desperate.

The central problem is the fact that Jordan’s budget is fundamentally unbalanced. In 2012, the budget consisted of JD6.8 billion ($9.6 billion) in expenditures offset against revenues of JD5.7 billion ($8.1 billion). This leaves a deficit of approximately JD1.1 billion ($1.5 billion). Of the expenditures in the 2012 budget,

This has resulted in a substantial increase in Jordan’s public debt. It is important to remember that these deficit figures are after taking into account grants that have been received by the government from other nations. If grants are not taken into account the deficit rises to JD2.1 billion ($3 billion).

Because of the substantial amount of aid Jordan receives in the form of grants and loans, it is worthwhile to go over the assistance that the country has received recently, this includes, according to the Congressional Research Service report about Jordan released about a month ago:

Grants:

  • Saudi Arabia, UAE, Kuwait, Qatar: $5 billion ($1 billion annually over five years)
  • United States: $460 million (includes $284 million in budget support)
  • European Union: $280 million (over 3 years from 2010-2013)
  • China: $7.9 million (for projects)

Loans:

  • IMF: $2 billion (over 3 years)
  • World Bank: $250 million
  • Japan: $156 million (3 years, low interest)
  • France: $193 million (soft loan)

Other:

Recent deficits have resulted in an increase in Jordan’s public debt. At the end of August, the debt stood at JD15.7 billion ($22.21 billion), up from JD13.4 billion ($18.9 billion). Of this debt, 69.6% (JD10.948 billion or $6.74bn) was domestic while the remaining 30.4% (JD4.771bn or $6.74bn) was external. Major international creditors include the World Bank (JD814.2 million or $1.15 million), the Arab Fund for Economic and Social Development (JD564.2 million or $797.1 million), and the International Monetary Fund (JD276.4 million or $390.5 million).

The makeup of the expenditures in the recent budget underscores the economic crisis that Jordan is facing. Of the JD6.8 billion ($9.6 billion) of expenses, JD1.6 billion ($2.3 billion), or 24% is spent on subsidies, with the remaining JD5.2 billion ($7.3 billion) spent on public sector salaries and other expenses.

Jordan’s must import 84% of its food needs (see footnote on pg. 7 of this CRS report), along with 96% of its energy needs. This leaves the Jordanian economy particularly vulnerable to increases in food or energy prices on the global market, as well as to problems of a more local origin, such as the disruption in gas supplies from Egypt following numerous attacks on the pipeline, which cost an estimated $2 billion, and forced an increase in the price of electricity earlier this year.

As mentioned above, Jordan imports approximately 150,000 barrels of oil per day, meaning that it has to spend approximately $4.03 billion on energy costs annually (it would be $4.68 billion annually, but there is a discount of $65.7 billion due to the reduced price oil imported from Iraq). It is clear that due to its reliance on imports Jordan is vulnerable to price increases on the global market for either food or fuel.
The government has sought to address this by providing subsidies on food and fuel, but the cost of these and other subdies is substantial (JD 1.6 billion or $2.3 billion). With the unrest in Middle East last year that saw revolutions topple authoritarian regimes in Egypt, Tunisia, and Libya, the government sought to reduce discontent by raising spending on subsidies.

However, this situation cannot indefinitely continue. Under the terms of its agreement with the International Monetary Fund, Jordan has committed to eliminating such subsidies, meaning that the present situation cannot indefinitely continue. However, any move to reduce subsidies has caused unrest in the past, and King Abdullah was forced to backtrack on a subsidy reduction. The government has since moved to eliminate such subsidies again, but the Prime Minister has pledged that those making less than JD1000 per month would not be affected by the elimination of subsidies because they would receive cash payments of approximately JD70 annually per person. It is unclear how this situation will play out.

The larger issue here goes deeper than the economy though, as bad as the situation is. The economic situation is very difficult, with high levels of unemployment, particularly among the youth, as well as rampant corruption. With these economic problems people do not want to things like subsidy reductions implemented without them having any say in the matter. Those within the government might see protests following subsidy cuts and assume that those out on the street want the country to go bankrupt, but that just reflects their elitist mentality.

The problem is that people have for a long time been denied any say in the matter. King Abdullah says that Prime Minister Ensour will be the last PM who he appoints, but I am skeptical. If he were committed to democracy he would not be attempting to rush measures like this through. This is just another example of an authoritarian regime flouting the will of the people.