Thursday, April 27, 2006

Are the reformists back?

The appointment of Bassem Awadallah as the director of the king's office has led to some speculation as to what this means. Awadallah is largely considered to be one of the architects of economic liberalization and reform in the country. This program took a double hit in the last year, with the parliament forcing Awadallah's resignation from the post of finance minister under Adnan Badran, and a disgraceful repudiation of a series of "reform laws" passed by Badran and rejected by parliament. The National Agenda designed to codify "reform" is in a semi-coma.

Of course, reform means different things to different people. The reform associated with Awadallah and Marwan Muasher and their group seems to have been designed to help large businesses at the expense of the lower and middle classes. The paradigm advocated by Ronald Reagan (Reaganomics: called voodoo economics by George H.W. Bush) is of dubious theoretical or empirical merit. Did it work better in Jordan than in the US?

The macroeconomic data show that the economy has grown well through the last few years. Success at the macro level has not "trickled down" to most people. Businesses that took advantage of tax incentives and easing of bureaucratic requirements have not done what they are supposed to do. This is to employ large numbers of people at reasonable wages. Businesses complain that university graduates don't have "the required skills", and use that as an excuse. In reality, the types of businesses that have taken advantages of the new climate are not labor intensive.

The trend towards "microfinancing" is really an admission of failure. It's as if to say "we can't create jobs, but here are a couple of thousand dinars to open a grocery store". I'm not saying that microfinance is bad, but its effectiveness is questionable.

Back to the point. What does the return of Awadallah mean? Fahed Khitan thinks that the king wants to reinvigorate the reform movement through the office given to Awadallah. Moreover, he hints that the king might not be happy with the pace of reform, and that the reform program is the king's program, no matter what influential people in the public sector, parliament, political classes or public figures think. This is in complete contrast to Nahid Hattar's analysis of the king's letter earlier this month. At the time, Hattar said that this means that the king has repudiated the liberal economic program of the past few years.

So, which is it? Well, the director of the king's office has no constitutional role. No matter what his intentions, the only influence Awadallah will have will be derived from him speaking for the king. I doubt that he will be an effective lobbyist for the king, especially since he and his program are so controversial in the first place. Why would deputies be more impressed with him now than they were when he was appointed finance minister? There seems to be a personal relationship between the king and Awadallah, and the king wanted to give him a job which would not require anybody's approval. The reformists are not back. Yet.


At 10:35 PM, Blogger Hatem Abunimeh said...

Some analysts suggest that he was put in that spot so that he can be groomed to be the next in line for the prime minister position. Who knows!

At 4:51 AM, Anonymous Anonymous said...

Hatem and Khalaf,

In a post I scribbled a couple of days ago, I avoided speculating who the next prime minister of Jordan will be. I tend to think what Hatem said holds a great degree of truth. I am only sure that the current prime minister (and his team) have performed their duty and it is about time a new Jordanian government is introduced.

It seems that the latest argument regarding Hamas is being used (or intended?) to capitalize on a general sense of dissatisfaction for the current prime minister following the increase in gas prices. Hence the thought of appointing a rather controversial figure like Awadallah may become arguably more welcomed by PMs or the public (if the public opinion holds significant weight).

At 6:37 AM, Blogger Khalaf said...

Hatem and Jameed: I agree that this is a possibility. I would venture to say that Awadallah as prime minister would have a difficult time succeeding. He has everybody antagonized even before starting, I can't see people letting him push his "reform" program without a fight.


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