Jordan eases lockdown, focuses on opening economy
Just as Jordan was among the first countries to react early to the novel coronavirus pandemic by imposing a nationwide lockdown March 18 and enforcing a strict curfew, it is now the first country in the region to ease restrictions and gradually open up its economy.
On April 19, the government ended the lockdown in the southern city of Aqaba but kept strict health precautions in place. The port city of more than 100,000 inhabitants, where no active cases have been recorded for over a month, has been isolated from the rest of the kingdom. The minister of state for media and communications, Amjad Al-Adaileh, also announced that day that the government will ease curfews in Karak, Tafileh and Maan governorates as of April 22, implementing procedures similar to those in Aqaba.
Jordan’s early response to the pandemic set it apart from neighboring countries such as Saudi Arabia, Iraq and Israel, where the numbers of cases are now in the thousands. King Abdullah told the US news program “Face the Nation” on April 19, “We acted quite early on, and that helped us flatten the curve quite, quite well,” according to CBS News. “It seems that we’ve got things under control and within the capabilities of our medical and health establishments,” he added. The king has been heading meetings with top officials through the National Center for Security and Crisis Management on an almost daily basis.
By April 20, Jordan’s total number of confirmed cases had reached 425, with seven fatalities. The kingdom had shut its borders, imposed a lockdown and enforced measures such as social distancing and quarantine for suspected cases. Where there have been coronavirus clusters, such as in the northern governorate of Irbid, the government was quick to isolate the area and impose a full curfew.
But even as the number of new cases has generally been decreasing by the day, the government appears to be ready to maintain a partial curfew in major population centers, such as Amman, during the holy month of Ramadan, which begins next week. The government, which enacted a defense law March 19 to enable it to enforce strict measures and override existing laws, said April 15 that it was easing up the lockdown to allow some businesses to reopen under certain conditions while observing health precautions.
On April 17, Prime Minister Omar Razzaz issued Defense Order No. 9, which outlines a program for protecting businesses, freelance workers and daily wage workers and aims to benefit more than 400,000 households. The program covers Jordanians, Gazans and children of Jordanian women married to non-Jordanians.
The government had adopted a number of economic measures to enable public and private sector employees to receive a certain percentage of their monthly wages while working from home or reporting for work. Under the defense order, the government decided to suspend all increases and allowances for public sector employees until next year, while deducting 10% from salaries exceeding 2,000 Jordanian dinars ($2,800) as a contribution to the treasury. Previous defense orders were criticized by the private sector for failing to provide businesses especially hurt by the shutdown with help from the government.
Business analyst and commentator Salamah al-Dir’awi wrote in Al-Ghad daily April 18 that the government had finally corrected its course by stepping in to help the private sector after making wrong decisions earlier. “The role of the Social Security Corporation at this stage is vital in providing social protection to families that have lost all income and that should be the government’s top priority now,” he said. “Failing to protect these families will have dire social and security consequences for the country,” he added.
But Dir’awi concluded that the government is unable to bear the burden on its own. “The treasury does not have the resources to keep the government running as it faces a $2 billion deficit as result of the crisis,” he said. He cautioned that the government will have a tough time borrowing money externally and will have to rely on local loans.
Jordanians believe that while the government’s measures have been successful in containing the pandemic, the country will be facing an unprecedented economic backlash in the coming weeks. But on April 19, Adaileh dispelled rumors that the government will not be able to pay this month’s salaries. He told a local news portal that the government will be able to meet its financial obligations for the coming two years. He added that the Central Bank’s foreign reserves are estimated at more than $19 billion, which reflects monetary stability.
But such assurances still seem unlikely to placate Jordanians. For one, many fear that the government’s reliance on the Social Security Corporation (SSC) to compensate non-insured Jordanians threatens millions of retirees. “Why should the insured and business owners that have exclusively funded the SSC since its establishment subsidize the non-insured or the business owners that evaded?” business analyst Jawad Abbasi told Al-Monitor. “The government should bear this cost, not the SSC, and it can do that by reducing unnecessary expenses and reviewing its huge pension cost that has plenty of wasteful spending. If it wants to delve into SSC funds, it should borrow these funds at market rates.” he added.
The International Monetary Fund (IMF) estimated, in a report published April 15, that Jordan’s economy will shrink by 3.7% as a result of the COVID-19 crisis; its gross domestic product grew 2% last year. The IMF also estimated that the economy will grow 3.7% in 2021.
The Jordan Times quoted the IMF’s chief of mission to Jordan, Chris Jarvis, on April 17 as saying the fund was ready to provide Jordan with support through its rapid financing instrument. Jarvis expressed confidence in Jordan’s ability to recover, as the government “has already done a lot in terms of structural reforms,” according to the paper. Minister of Finance Mohamad al-Ississ was quoted in the same story as saying the spread of the coronavirus will not stop Jordan’s economic reform process but rather will expedite it. He stressed that the kingdom will continue to service its debt and honor its external obligations. Source