Thursday, December 27, 2007

Waiting for shit to hit the fan

According to plans, the New Year will witness final lifting of subsidies on fuel. The 2008 budget carries no provisions for subsidies, and the government is promising to spend 300 million dinars on a “social safety net”, which includes a pay raise for government workers to offset the expected effects.

According to reports, the pay raises will be in the ball park of 30 dinars for people making less than 300 dinars per month, and lower amounts for people who make more. On the other hand, the minister of energy expects that the cylinder of liquefied petroleum gas, which is currently sold at 4.75 dinars will go up to a whopping 9.90 dinars when the subsidies are lifted. If a family is using LPG for heating, it can easily use 6 cylinders per month, effectively wiping out the pay raise in a single blow. Of course, LPG is only one commodity of many that will become more expensive.

The current pricing scheme (as far as anybody can tell) overprices gasoline and uses to surplus to lower the costs of other products such as diesel and kerosene. The previous government tried to impose a “quality tax” on gasoline, but the parliament refused. I read today that the government will try this again. It is not clear whether the point is to use the money to continue subsidizing diesel and LPG or just to raise money. The government sometimes imposes taxes for a specific purpose and then decides to pocket the money instead (like the University Fees Tax).

Anyway, most people are pessimistic, and expect a massive wave of inflation that will be difficult for poorer people to handle. Surprisingly, nobody thinks that a special parliamentary session to discuss inflation will lead to anything useful. I wonder why.

So we are in a wait and see mode. Everybody expects a lower standard of living, the question is how much lower, and how will society cope?

Wednesday, December 26, 2007

Parliament rejects the new traffic law

There has been a lot of grumbling about this law, and it is not surprising that the parliament decided to reject it out of hand. The discussions on the issue in the parliament centered on the constitutionality of how it was passed, the level of fines, giving policemen a cut of the fines, and the definition of what a “driver” is (it classified sheepherders as drivers).

Anyway, the legislation is now in the senate, where they may either uphold the rejection, modify the law, ratify the legislation (in which case it has to be sent back to the lower house) or shelve the issue, in which case the law will stay in force as a temporary law. Some legislators worried that this is what the senate might do. When the lower house rejected the income tax law almost two years ago, it looked like the senate wanted to keep the law enforced by not taking up the issue. Pressure from the press and the people forced them to eventually reject the legislation. Abdlkarim Kabariti, who spearheaded the rejection in the senate, was rewarded by not being re appointed in the current makeup.

This time it looks like the senate will have to deal with this issue promptly. In an extraordinary move, the head of the PSD (police) has issued orders not to enforce the law until the parliament ratifies it. So, the law is on the books but the police are refusing to enforce it.

Anyway, there is a whole suite of problems related to the traffic situation in the country. These include poor pedestrian behavior (on whom there is no legal burden to take care of him/her self), lax enforcement of existing legislation, forgiving social attitudes towards reckless drivers and bad roads. Any serious attempt to improve the traffic situation should take all of these factors into account. Poor driving should not turn into just another cash cow for the government.

Tuesday, December 18, 2007


The parliament has finally given their vote of confidence to Nader Dahabi’s government. They gave him a record 97 (out of 110) yes votes. This has been called a “golden confidence” vote, in an allusion to the PM’s last name, which means golden.

Now, the farcical nature of the number of votes in favor of the government would not have been so annoying had it not be preceded by a week of discussions and posturing on the issue. During this week, we heard all sorts of valid and invalid complaints about this and former governments, public freedom and participation laws, economic policy and the nature of the makeup of the cabinet. A newbie or a naïve person would have concluded that the government is in trouble. A more experienced observer would have known that it is all for show, and would have predicted such a result.

It is understandable that MP’s want to show off their oratory to their constituents, and to implicitly suggest that they know what is going on. After doing that, the next logical step would be to vote in a matter consistent with your rhetoric. Why did the MP’s treat Dahabi and his cabinet as if they are the long awaited saviors? On the other hand, why didn’t they just shut up in the first place?

The executive branch still holds inordinate power in the country. Deputies who want to show results to their constituents do not want to get on the wrong side of the government. Constituents are only looking for small gains anyway. Getting a soldier hired, a teacher transferred, a school or a health clinic built. In a more perfect system, deputies would not have a role in minutiae of administration, and they would earmark money in the budget for schools and clinics without needing to appease cabinet members. The voters treat the parliament with cynicism, the parliament treats the government with cynicism, the parliament treats the government with cynicism and the press is attempting to take the whole thing seriously, and with a straight face.

Rami Khouri has an excellent article on the political situation on the country (thanks Mohanned). It boils down to this: Nobody thinks that it is worth it to tinker with the system. I suggest reading the whole thing.

Anyway, for all the MP’s who may read this, I say: Shut up. Attend the sessions and committee meetings. Do your job. Be fair and enlightened. I will like you better that way.

Did I mention shut up?

Tuesday, December 11, 2007

Pay raises

In his presentation to parliament prior to the upcoming confidence vote, the PM, Nader Dahabi vowed to raise salaries of public sector workers and retirees. This is part of a compensation program in exchange for lifting subsidies on fuel derivatives, which is planned for the next fiscal year.

This pay raise is due to cost over 300 million dinars. Assuming that 300,000 military, security and civil employees and retirees benefit from it, then the average salary will go up by about 1000 dinars per year, or a little more than 80 dinars per month. Presumably, private sector employers will be asked (nicely) to raise their salaries by similar amounts.

This is a rather generous raise compared to previous salary adjustments. The government has taken to token raises of 5 and 10 dinars per month in the last few years, which did little to compensate for the effect of inflation on salaries. The last time fuel prices were raised, the government resorted to a cash payout gimmick, ostensibly to help out the poor. As might be expected, the mechanism was inefficient and demeaning, and did little to actually improve the well-being of the people it was supposed to help.

Obviously, some are concerned that increased liquidity will actually fuel inflation by increasing demand. While this is a concern, much of the inflation is not caused by local economic conditions, but driven by increased costs of imports.

On the other hand, a recent survey by the department of statistics shows that the average difference between income and spending for Jordanian families results in a deficit of about 1300 dinars per year. With the expected wave of inflation caused by lifting of subsidies, even this raise will do little to fill the existing gap. Until this gap is filled, it is doubtful that the increased liquidity will be a significant factor in driving inflation.

One also worries that the scale of this raise is a prelude to a massive increase in fuel prices, which may dwarf the effects to this pay raise. This is what remains to be seen.

Thursday, December 06, 2007

The temporary traffic law

In the final days before leaving office, Marouf Bakhit’s cabinet issued a temporary traffic law. Ostensibly, it is meant to toughen punishments on traffic violations. However, it might be yet another gambit to collect more money, as Hilmi Asmar (Addustour) concludes.

According to the constitution, temporary laws can be issued only under dire situations when parliament is not in session. There has been no massive increase in traffic violations, accidents or fatalities. There was nothing “urgent” that could not have waited until parliament convened. If this issue was so urgent, why wasn’t it presented to the previous parliament?

The media initially concentrated on the tougher punishments, largely in the form of (much) higher fines. It turns out that there is more to it. Whole classes of vehicles that used to register as private vehicles now have to register as commercial vehicles, requiring (of course) much higher registration fees. Gas distributors are threatening to raise prices, and manufacturing companies are implicitly threatening to let go of workers who need to be transported from distant areas. It is not obvious why the new registration rules will lower traffic accidents.

Traffic violations are a significant problem in Jordan, and there is nothing wrong with punishing reckless drivers. However, not all fatalities are from reckless drivers. Often, pedestrians are reckless, and drivers run into them because they shoot into traffic from behind blind spots or in areas where it is impossible to slow down. In these areas, pedestrian bridges are often built to solve the problem. Pedestrians insist on ignoring them, endangering themselves and other people using the road. In case they have an accident, the law always places blame on the driver, no matter what the circumstance.

Therefore, if the true intention was to lower deaths on the road, it would have been useful to reevaluate the law whereby a driver is held to blame even if somebody jumps off of a building onto his parked car. Of course, how can the government milk people that way?

Adnan Badran tried a similar gimmick of passing four laws unconstitutionally before leaving office. At the time, the parliament swiftly rejected these laws out of hand. Let’s hope the new parliament has the same inclinations.

Sunday, December 02, 2007

Fools rush in...

Abdulhadi Majali has been elected yet again as the speaker of the house. This time, the seat was contested by Falak Jama’ani, who is in her second term in the parliament. Heavyweights such as Abdelrauf Rawabdeh and Sa’ad Hayel Surour haven’t even bothered to try in the last couple of years. Instead, they got Mamdouh Abbadi to be elected as the speaker’s deputy in exchange for their support of Abdulhadi. Falak insisted on running. As they say, fools rush in where angels fear to tread. She was beaten 80 to 21.

That adds up to one hundred and one. What about the other nine, you may ask. Eight ballot papers had no name and the ninth was for Khalil Atieh, who wasn’t running.

Now, I understand that sometimes one is faced with life-changing decisions, and it is difficult to make a choice. But for the life of me, what is so complicated about this one? I mean, if a deputy can’t make a simple decision like choosing he he/she wants to be as a speaker, then what the hell are they doing there in the first place? What is going to happen when they are faced with the budget, the new income tax law, and other, important, issues? Simply put in a blank piece of paper? I have a better suggestion: GO HOME!