Jordan cuts water subsidies to tackle 'chronic financial deficit'

Jordanian authorities have cut subsidies on municipal water, officials said on Monday, following sharp rises in electricity prices last year.

The kingdom, which is among the most indebted in the world relative to the size of its economy, is under an International Monetary Fund programme aimed primarily at raising state revenue to help deal with its $56 billion debt.

Water Ministry spokesman Omar Salameh said that the reduction in subsidies will take effect on January 1 of next year.

Mr Salameh said that those who consume the least water, defined as six cubic metres a month or less, will remain “protected”.

“Their bills will not go up,” Mr Salameh told The National, estimating that they comprise 29 per cent of municipal water consumers.

Under the current charges, municipal water, which is used by households and businesses, is subsidised at 82 per cent of its cost per cubic metre, regardless of consumption.

On January 1, subsidies on bills of more than six cubic metres a month will be reduced the more consumption increases and will be removed completely on consumption of 42 cubic metres a month or more.

Lina, an administrator in a cancer hospital, says that her family of seven, who live in a residential building with a garden, consume about 45 cubic metres a month, meaning that their water bill will almost double to $110 a month.

She says that she is now looking into buying a drip irrigation system to water the garden.

“My son takes half an hour showers as he listens to music in the bathroom, and the dishwashing machine is on two times a day when it is not full,” says Lina.

“This will have to stop.”

Municipal use consumes 48 per cent of Jordan's water supplies, compared with 49 per cent for farming and 3 per cent for industry. Many households and businesses resort to tanking water because of the scarcity of state supply.

The new water charges, however, do not extend to the farming sector, which receives large de facto water subsidies, although it accounts for less than five per cent of the gross domestic product.

Farmers in Jordan receive free water or pay a few cents per cubic metre for it. Illegal wells are also common, contributing to the depletion of some aquifers.

But agricultural land owners, especially those who belong to clans or tribes, are a bedrock of Jordan's political system, making any move to raise their costs difficult, although the authorities started a campaign to curb water theft last year, in response to pressure from western donors.

The prices of basic services are also a sensitive issue in Jordan. Income per person was $4,201 last year, according to the World Bank. This level is $100 less than in Egypt, where the currency had undergone devaluation.

In December 2022, demonstrations and riots broke out in the Jordanian southern governorate of Maan after sharp rises in fuel prices, leading to the death of four security personnel. The rise followed the removal of subsidies on electricity in the same year.

A government white paper recently said Jordan’s spending on water is in a “chronic financial deficit”, with revenue that “rarely even covers the cost of operation and maintenance”.

“It is essential to improve the financial capacity of the sector to enable enhanced service standards and quality,” the paper said.