Subsidies ended to ease country’s debt
Millions of Jordanians are paying almost double for pita – the classic round Arab flat bread pocket — after the government ended subsides on the staple food.
The cost for a kilogram of white pita jumped 60 percent Saturday, while the cost of large pita nearly doubled. Prices for other types of previously unsubsidized bread are not impacted by the change.
The move is expected to impact low-income families in Jordan. Past increases have sparked protests and riots.
The latest increase is part of Jordan’s 2018 budget law, aimed at easing the country’s debt while increasing the government’s domestic income, in accordance with recommendations from the International Monetary Fund, or IMF.
It also comes at a time when economic expectations in Jordan “are more dismal than they had been this time last year,” Dr. Jawad Anani, Chairman of the Board for the Amman Stock Exchange and former Deputy Prime Minister of Economic Affairs, said in a recent column in The Jordan Times.
“Everybody will pay the non-subsidized price [for bread],” Dr. Anani told The Media Line. “Some will be compensated, but some will not be compensated.”
Only Jordanians earning less than 1,000 Jordanian dinars per month, about $1,400, will be eligible to receive government compensation on a monthly basis, according to Dr. Anani. Before the bread subsidies were cut, they were available to everyone in Jordan.
“Bread has been subsidized [across the region] because it’s the main staple for many people, along with rice, and has this high symbolic value,” Dr. Ferdinand Eibl, a King’s College London lecturer in political economy of the Middle East, told The Media Line.
He said not everyone will get the help, though, because many Jordanians earn a living by more informal means, such as those who are self-employed like street vendors.
“You can make a very good oral argument against what the government did [in cutting the subsidy],” Dr. Anani said, though adding that Jordan’s refugee crisis has put a massive strain on the economy.
An estimated three million people living in Jordan are from neighboring, war-torn countries like Syria. They account for 30 percent of the country’s total population of more than nine million, according to 2016 United Nations estimates.
Mohammad Batah, a spokesperson for the UN World Food Program in Jordan, said in an email to The Media Line that refugees living in camps will not be affected by increased prices. The UN will continue to distribute the same amount of daily bread.
The UN estimates that 21 percent of the more than 650,000 registered Syrian refugees in Jordan live within camps. It is unclear how many unregistered refugees currently reside in the country.
“For the Syrians who are living in the community and for their situation, [the World Food Program] is still looking for options in that regard,” Batah said in the email. “Currently we are in the phase of collecting more comprehensive data and keeping track on how our beneficiaries are being affected.”
A February 2016 report by the World Bank estimated that Syrian refugees cost Jordan the equivalent of more than $2.5 billion per year, or one-fourth of the government’s annual revenue, though the Jordanian government gets billions of dollars in foreign aid due to its refugee presence.
“I don’t deny that the refugees cost the Jordanian government money,” Dr. Eibl said, “but at the end of the day I don’t think it is in Jordan’s interest to be free of refugees.”
(Dina Berliner is a Student Intern in The Media Line’s Press and Policy Student Program)