Arab Bank Chairman Abdul Hamid Shoman has expressed his concerns over Jordan’s rising energy bills and political instability that are having a negative impact on investors’ confidence in the Hashemite Kingdom’s economy.
Speaking at the Euromoney Jordan Conference in Amman on Tuesday, the Arab Bank chief blamed the country’s fiscal budget deficit and public spending for the increase in public debt which rose 7% to JRD14.3bn ($20.2bn) during Q1 of 2011.
Shoman urged the public and the private sectors to work together to combat poverty and alleviate unemployment in Jordan. “We are witnessing challenging times and the government cannot do it alone,” he said while adding that about 30,000 jobs are needed annually.
Jordan is one of the smallest economies in the Middle East and imports more than 90% of its oil. The kingdom is heavily reliant on foreign investment and grants to supplement its budget income and deficits.
The kingdom’s energy supply has become increasingly expensive after it was forced to switch to more expensive fuels such as diesel. Jordan’s natural gas pipeline coming from Egypt has been hit by saboteurs operating in the Sinai peninsula several times during the last year.
Uprisings in neighbouring Egypt, Syria and the wider region has forced the government to increase public-sector salaries and subsidies. Many political observers believe the government is trying to maintain the status quo after taking cue from the ousting of longstanding leaders in Tunisia, Egypt, Libya and Yemen.
King Abdullah has changed three prime ministers since protests began in February last year and has promised sweeping political reforms.