Jordan’s King Abdullah II swears in new government led by ex-World Bank economist

Jordan’s King Abdullah II has sworn in a new government led by the country’s designated new Prime Minister Omar al-Razzaz, mandating the former World Bank economist to review a controversial IMF-backed tax system that has sparked the kingdom’s biggest protests in years.

King Abdullah, a relatively secure US ally in the Middle East, issued the royal decree on Thursday, days after he appointed Razzaz outside the ranks of the traditional political elite, as Jordan’s new premier.

Earlier this month, and shortly after the government announced a fuel prices rise of up to 5.5 percent and a 19 percent hike in electricity prices, thousands of Jordanians began staging growing protests in the capital Amman and in provincial towns to express their dissent against a series of tax rises implemented since January.

The spikes are required by the IMF, from which the cash-strapped country secured a $723-million loan in 2016.

Demonstrators called for ousting the government and throwing out the tax bill, which unions and civic groups blamed for worsening poverty and unemployment.

According to official sources, the newly-formed cabinet is expected to preserve traditional support for US policies in the Middle East and to continue with IMF-guided reforms.

Foreign Minister Ayman Safadi and Interior Minister Samir al Mubadeen, who were also serving in the previous cabinet led by dismissed premier Hani Mulki, kept their posts in Razzaz’s 28-member cabinet, dominated by a mix of conservative politicians and Western-leaning technocrats, including seven women.

“The (economic) challenges we face are the accumulation of decades, in fact …, nearly two decades,” said Razzaz, who was the education minister in the previous administration, at the ceremony.

“This is a government that seeks very clear objectives, with very clear KPIs (Key Performance Indicators) for achievement and we will do that,” the Harvard-educated economist added.

On Monday, the Saudi state media announced that Saudi Arabia, the United Arab Emirates and Kuwait offered a $2.5-billion bailout package to Jordan in a bid to help it in overcoming the current crisis.

The rescue package comprises the bailout in the form of a deposit in the Jordanian Central Bank, World Bank guarantees, and budgetary support over five years.

Jordan’s economy has struggled to grow in the past few years in the face of chronic deficits, as private foreign capital and aid flows have declined.

The country has a public debt of some $35 billion, equivalent to around 90 percent of its gross domestic product.