Home OpinionComment Jordan’s electric problems


Jordan’s electric problems

The incoming government must tackle energy subsidies

by Riad Al-Khouri

Jordanian Prime Minister Abdullah Ensour's incoming government last week won a vote of confidence in Parliament, securing the approval of 82 out of the Lower House’s 150 deputies. To most observers, the outcome was never in doubt, but, as an ally of the United States, Jordan’s political process must be presented in fairly glowing terms to convince foreign donors that all is well in such a model Arab state. As such, the supposed travails in the new cabinet’s advent were sold to onlookers as an expression of popular will, without the drama of elections elsewhere in the region.

Ensour lost little sleep between his designation in March and last week’s confirmation vote. Yet, the process of seeking confidence was this time presented in better terms than other cabinets’ recent efforts.

In Jordan’s stunted political culture, there may be little room for overt sarcasm, but one catchy expression has entered the local political vocabulary: “one-eleven.” This refers to the 111 deputies — out of an even smaller Lower House than the present body — that voted to grant confidence to the last Jordanian government formed before the “Arab Spring” began in December 2010. The term is one of approbation for kowtowing parliamentarians much more in line with the King’s wishes than that of their citizens. Interestingly, however, Ensour wasn’t part of that 111, having voted as an MP at the time  that he had no-confidence in the government, as well as opposing subsequent governments.

Even so, those hoping for change may be disappointed. Ensour does not claim to be ushering in revolution, and while he has an element of independence, he is to all intents and purposes a regime stalwart. Formerly a cabinet member and vice-premier, he has, especially since 2010, also been part of the loyal opposition — before becoming prime minister himself last year for the first time (this is his second stint in the top job).

An electric problem

Nevertheless, Ensour talks of major reforms and there is certainly a lot to do. Apart from anything else, an acute problem currently worrying many in the country concerns electricity prices: state-run power operations suffer an annual loss of close to $1.8 billion due to subsidized rates. If this deficit is not addressed, “we will find ourselves forced to take harsh measures including scheduled power cuts, a stage we do not want to reach,” Ensour told parliamentarians last week. However, he pledged to consult with deputies before deciding to take the potentially unpopular decision to increase electricity prices, saying that his cabinet "will not make such a move unless we have exhausted all other options."

Although he promised to postpone any such measures till the early summer, this particular question must be settled to pull Jordan back from a potential fiscal cliff. Ensour’s record on such matters is better than most in Amman: he recently pushed through an increase in fuel prices — now absorbed and forgotten by the public, especially as the global oil price has since fallen.

The way out of the electricity pricing issue may involve Ensour making some deft political maneuvers. In particular, he indicated that a cabinet shuffle will come soon — an odd statement during a parliamentary confidence debate on a new government. Ensour went so far as to declare that a shuffled cabinet team with more parliamentarians on board is "inevitable”, noting that he would add deputies to his more-or-less technocratic team before too long.

To be able to achieve reform without facing prolonged street protests, Ensour needs as broad a coalition as possible and there are indications that he may try co-opt those who currently oppose him. The current 18-member government is the smallest in decades, with merged ministries and joint portfolios appearing to signal efficient streamlining and austerity amid the country’s current financial woes.

Later in the year, however, several rebellious MPs could be brought into the government, being granted parts of currently doubled-up ministries in return for loyalty to Ensour on vital issues, including electricity.

If that all sound like the usual horse-trading in the country's divided political system, it’s because it is. But the state of the country's finances make meaningful reforms a necessity.

 

Riad al Khouri, a Jordanian economist who lives and works in the region, is principal of DEA Inc, Washington DC

 

Support our fight for economic liberty &
the freedom of the entrepreneurial mind
DONATE NOW

Riad Al-Khouri

Riad Al-Khouri is Middle East director of GeoEconomica GmbH
--------------------------------------


View all posts by

You may also like