A petrol station in Amman. The Jordanian government says it will raise petrol prices at the beginning of April. AP
A petrol station in Amman. The Jordanian government says it will raise petrol prices at the beginning of April. AP
A petrol station in Amman. The Jordanian government says it will raise petrol prices at the beginning of April. AP
A petrol station in Amman. The Jordanian government says it will raise petrol prices at the beginning of April. AP

Jordan’s reforms hit by global economic shocks of war in Ukraine


Khaled Yacoub Oweis
  • English
  • Arabic

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Shop owners on the main Prince Mohammad Street of Amman are loitering in the road due to a lack of customers.

It's an eerie sign that global economic fragility, accelerated by the Ukraine war, is reaching a country still struggling to recover from the shock of Covid-19. That crisis hammered the vital tourism industry but worse is to come.

Among the idling workers, one exception is solar panel specialist Ayman Badr.

The heating systems Mr Badr imports from Europe are selling briskly, although winter is not the high season.

Jordan is in severe economic downturn and consumer prices are rising sharply, partly due to the global impact on commodities caused by the Ukraine war. Unemployment is hovering at an official record high of 25 per cent.

Many in the kingdom of 10 million expect to pay more for electricity, and soon.

Subsidies on electricity are to be lifted next week, three years after price increases prompted mass anti-government demonstrations across the kingdom.

Unlike his neighbours, Mr Badr is busy answering phones and meeting customers. He accompanies them to the door and listens to their requests intently.

With a sunless March and this year's unusually long winter in Jordan, Mr Badr has been telling potential buyers that a solar water heater will make little immediate difference.

“People are hoping to save money in the long term” he says.

As much as his business acumen, his swift trade is due to policies of the International Monetary Fund and the Ukraine war.

Authorities were already under financial pressure in Amman. They announced early this year that Jordan would begin lifting electricity subsidies on April 1 ― one of the classic IMF requests to restore fiscal stability.

They did not expect the Ukraine-linked upheaval that raised prices across a range of goods needed by people every day.

Jordan said that as of April 1 petrol prices will also rise, after it refrained from increasing the cost at the pump to match the global fuel price surge in recent weeks.

Subsidies drain government finances

Lifting subsidies is a major component of the kingdom’s commitment to the IMF, which gives Jordan crucial support to cope with a massive public debt.

In return it wants Jordan to eliminate losses at the state-owned electricity monopoly.

Annual losses, which the IMF estimated at one per cent of gross domestic product last year, are adding to a public dept equivalent to 92 per cent of the size of the economy.

Jordanian officials say most people will not be affected because they use little electricity and will not be charged more for each kilowatt per hour as long as their consumption remains low.

Hussein Al Labboun, head of the Energy Regulatory Authority, told state television this week that the money saved will support other "economic sectors".

“The subsidies will be used wisely. They will be lifted on those who do not deserve them among the high income class,” he said.

But only those who are officially recognised as heading a family are allowed to register to maintain their subsidy.

Household pain

For Lina, a mother of two, the electricity bill for her middle-class family sometimes tops $140 a month in winter, despite having a solar water heater.

Come April she expects to be paying more.

“No one understands anything,” she says. “We are being hit by soaring prices from everywhere.”

Since the Russian attack on Ukraine on February 24, prices in Amman for a powdered milk bag rose from $10 to $18.

A kilo of sugar rose from 76 cents to 88 cents and cooking oil rose to $2.50 a litre compared with $1.60. Prices of some vegetables and basic processed cheese rose sharply.

The government indicated that aside from monitoring, there is little it can do.

Prime Minister Bisher Khasawneh said price gougers will receive a “red eye”, calling for “partnership” with the state to “lessen the sting of the current circumstances", in particular "the impact of the Russian-Ukrainian crisis”.

In Jordan, the prime minster is in charge of the daily running of the government while all significant powers are held by the monarch, King Abdullah.

The last time the government implemented major IMF loan conditions, in mid-2018, they consisted of raising fuel and electricity prices, as well as increasing taxes.

Peaceful demonstrations broke out in Amman and other cities, forcing the then-prime minister Hani Mulki to resign.

A crackdown on dissent has intensified since and security forces disbanded the Teacher’s Union, a major participant in the protests.

In the last few days, extra police were stationed near the Prime Ministry in west Amman, site of the largest rallies three years ago.

Coffee troubles

Down the road from Mr Badr’s business is a tiny takeaway coffee shop called Yassin’s.

A nearby cash machine is frequented by cars on their way to the neglected old downtown of Amman, and to the poorer eastern part of the city.

Yassin, the owner of the business, has kept his prices fixed at 75 cents for a cup of pure Arabica coffee, although his costs have risen this year from $77 per 10 kilo bag to $88.

He says he should raise prices by 10 cents a cup to maintain his profit margin but he cannot because he will lose even regular customers.

“People are so strapped for money,” he says.

Official data shows that inflation was 1.3 per cent last year, compared with 0.3 per cent in 2020.

Jordan's programme of economic reforms, however necessary, could now be derailed by the global commodity price crisis.

When the government announced in January that it would lift electricity subsidies, it did not expect to be affected by an economic maelstrom of global proportions.

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1987

1954

1921

1888

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Pharaoh's curse

British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.

Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


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THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

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Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

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Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.” 

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While you're here
Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

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Born: Mukalla, Yemen, 1979

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Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

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The bio

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Updated: March 22, 2022, 9:27 AM`