Tuesday, December 12, 2006

The 2007 budget

One might not know it from their behavior, but parliament has some important work to do. Foremost at this stage is scrutinizing next year’s budget, which was sent to them a couple of weeks ago. Yesterday, the minister of finance discussed the outlines of this document.

The 2007 budget is quite different from the 2006 version. It is worth almost 4.3 billion dinars, with a growth of 9.3% over last year’s budget. The economy is growing at a rate of almost 6%. What is interesting is that this budget saves almost half a billion dinars by eliminating fuel subsidies. Another boost comes from more generous aid from Saudi Arabia, who are kicking in about 400 million dinars to help us out.

So, what is the government planning to do with the nearly 1 billion dinar windfall, after adding growing tax revenues? Fahed Fanek thinks that we should use it to pay down outstanding debts. The government thinks differently.

There is a big jump in running expense spending (3.3 billion up from 2.6 billion), and a more moderate jump in capital spending (988 million up from 843 million). I am having trouble understanding how running expenses are to go up by 700 million dinars after eliminating 450 million dinars in fuel subsidies. I figure that wages are taking up about 300 million dinars of the growth, so the question is where the other 850 million are to be spent.

Many observers are more concerned about the growth in capital expenditures. It is not obvious what the projects will be, as I have not been able to find a full text of the budget yet. In principle, pumping more money into the economy and improving the infrastructure is a welcome development.

This large growth in revenues and expenditures is an important development. How money is spent should reflect the most pressing issues facing society. Thus, adequate funding of health, education, higher education and necessary infrastructure should take precedence over spending for monumental (show) projects. I hope that MP’s will help ensure that the extra money is spent in a wise way.

I feel a sudden bout of depression overwhelming me.


At 9:59 PM, Anonymous Anonymous said...

Most of the extra current spending goes into a black box called "security and military", and so do hundreds of millions of dollars of "military aid" from the US that do not even appear in the budget.

I just hope that all that money is actually going into strengthening our armed forces.

At 10:13 PM, Blogger Khalaf said...

Anon: As best as I can figure out from this table, the military has 1.1 billion dinars earmarked for recurring costs. I don't know what was the number last year, so you might be right.

At 10:16 AM, Anonymous Anonymous said...

Hi Khalaf,
After the hosheh - Now, we all know what they are busy doing in the parliament !

2. You know what I like most about your blog: The picture of the boy on the donkey! Thats the Jordan I like - Very good.


At 11:31 AM, Anonymous Anonymous said...

When will we have a government that will save its people from poverty and suffering? How can they live with themselves knowing that they are responsible for hungry kids whose family cannot afford food, cold families who cannot afford fuel and, and sick people who cannot afford proper healthcare and medication?

I too feel an overwhelming depression every time I learn where the country's money is going.

At 2:04 PM, Anonymous Anonymous said...

I am no economist but the common sense says that when you have extra budget like the money we got from Saudi Arabia and we shy away from oil subsidies the most obvious choice is to reduce deficit but in the budget the deficit has increased. I have better trust in my wife's planning which has saved our household from deficit in 2006 by reducing expenditures and increasing effeciency in prioritizing and even saved some money!

At 7:02 AM, Blogger Khalaf said...

Anon 1: Thanks :)

Anon 2: There is always a debate about how generous governments should be, so as not to encourage welfare dependancy. However, the services that government should provide (health and all types of education) will help people improve their lives.

Batir: Family budgets are different in that they should be managed to fit income. Government always want to justify their insatialble need to collect new taxes.

At 8:08 PM, Anonymous Anonymous said...

Hi Khalaf,

Please send me your email address

Jordan Planet

At 9:39 PM, Anonymous Anonymous said...

I was googling something (I can't remember what it was!) now that I found your blogspot!
Very NICE, indeed.
As I was reading entries and comments, I was thinking "i7na bikheir"!
Well done, Khalaf. Your voices are being heard; maybe not by politicians and executives; but by simple, humble people like ME!
You raise me up.
Kul saneh wintu salmeen.

At 10:26 PM, Blogger Khalaf said...

Hinna: Thank you very much. Comments like yours encourage me to keep on going!


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