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Jordan is one the Arab World’s most stable nation states. It is a constitutional monarchy that has long played a balancing act between regional trouble spots due to its precarious position. The King still holds supreme authority although his popularity has varied over time. You either like him, hate him or both. A large part of the population is of Palestinian origin. Up until now the country has survived the turmoil of the Arab Spring. However, amidst a growing economic crisis that can be attributed to the regional turmoil that has or had engulfed Syria and Iraq, Jordan’s neighbors and the influx of Syrian refugees the country witnessed explosive protests.
The protests erupted over a new tax reform law that has since been withdrawn and increased oil and energy prices that were supported by the International Monitory Funds (IMF). The proposed increase has also been dropped, meanwhile Prime Minister Hani al-Mulki resigned on Monday at King Abdullah II’s request and was replaced by former Education Minister Omar al-Razzaz. The Hashemite kingdom’s debt has amounted to $40 billion and its capital Aman has been ranked as the most expensive places in the Arab world to live in.
The reason why Jordan receives so much foreign aid is the role they have played in the mediation of the Palestinian-Israeli conflict. Jordanian King Abdullah II is also recognized by the Palestinian Authority as the custodian of Masjid Aqsa and Jerusalem’s other Islamic sites. As regards to the taxation law it will certainly be regarded as unfair by the majority of Jordan’s citizens. The increase in taxing food staples and budget staples can be attributed to having supplied food and other resources to refugees who have fled from Iraq and Syria. Jordan therefore has a steak in how the conflicts in these two countries have played out or are playing out. The position of regional mediator has also been less relevant to Jordan’s situation as countries such as Saudi Arabia and Israel feel they no longer need a third party to settle their regional disputes.
The bill mainly aims to improve tax collection, curb tax evasion and boost tax revenues, which are expected to increase by 300 million Jordanian dinars ($432 million) annually. In addition, the proportion of income taxpayers in Jordan is expected to rise from 4.5 per cent to 10 per cent once the bill is enacted. The legislation has been resisted by multiple sectors, including professional associations and investors. Earlier in the day, 57 lawmakers out of the 130-seat Lower House of the Jordanian Parliament signed a letter asking the country’s king to fire Mulki. They said the policies of Mulki had pushed “the country to explode”, referring to last week’s unprecedented general strike. (Jordan PM resigns after tax protest, new leader appointed)
If this is to improve the collection of taxes then this would have aimed to improve the conditions of corruption and introduce accountability. However, Mulki’s resignation means that will come under review. Another matter is that the exchange of one prime minister for another doesn’t solve the question of who should take responsibility for the current crisis. In Jordan the prime minister is chosen by the king from among government officials or his royal advisors. This contrasts with Western constitutional monarchies such as Britain where the prime minister is chosen by the majority party in parliament. The lack of support been given by professional associations and investors does not bode well for Jordan’s economic development.
However, the King has been known to be a man of exceptional negotiating skills and exceptional intellect. He will most likely have a trick up his sleeve to make sure he remains on the throne throughout the regional turmoil.