Jordan Labor Watch - Nadeem Abdel Samad
Civic institutions, economic experts and civil society organizations have held the economic policies imposed by the International Monetary Fund (IMF) responsible for weakening social protection systems, exacerbating social inequalities and increasing poverty in Jordan.
Some felt that the implementation of these policies, and the economic reform programs, have had a negative impact on social indicators such as rates of unemployment, equitable access to healthcare and education, and ultimately led to increased poverty for most Jordanians. In 2018, the poverty rate reached 15.7 percent. This figure is expected to rise to 27 percent by the impact of the COVID-19 pandemic, according to estimations made by the World Bank.
Earlier this year, a policy paper titled "Social Protection Policy in Jordan: Between the Theoretical Framework and the Application on the Ground” was developed by the Phenix Center for Economic Studies. The policy paper examined the social protection system, discussing its development in the past three decades leading up to the outbreak of the COVID-19 pandemic, and examined the potential impact of the pandemic on the future of social protection in Jordan.
The policy paper utilized a systematic review methodological approach through an analysis of existing studies, as well as the collection of primary data through in-depth interviews with stakeholders, experts on social protection, representatives of the private and public sectors, and civil society actors across the Kingdom. The policy paper found that since the implementation of IMF-endorsed economic restructuring programs by the Government, various social protection programmes have been adversely affected - particularly in education and health. Jordan's spending on education, health and employment declined from 25 percent in 2000 to 23 percent in 2010 - despite a population increase of 41.7 percent within those years.
The paper argued that the Jordanian Government’s adoption of these programs with the objective of reducing the national budget deficit led to the marginalization of a large segment of citizens, migrant workers and refugees in Jordan - who were deprived from receiving even a rudimentary coverage under social protection policies.
The paper’s analysis indicated that the IMF's lending terms had been one of the main reasons for the increase in unemployment and poverty between the years of 1990 and 2005, as IMF requirements contributed to reduced spending on social welfare, increased unemployment and the stagnancy of wages.
The paper further highlighted that these factors have contributed to the expansion of the informal labor sector as well as the increased number of informal Jordanian workers. The paper drew a link between increased rates of formality and increased social vulnerability, as informal workers are deprived of the benefits of the social protection system available to workers in the formal labor sector.
Successive Jordanian governments have adopted similar structural adjustment programs, which in application has consisted of lifting government subsidies on basic commodities, reducing government spending, reducing the number of workers in the public sector, and redeveloping government budgets to lack direct support for many social protection programs.
The Jordanian government also implemented policies with the objective of reducing the role of the public sector through liberalization and privatization, opening the market to foreign competition, encouraging foreign exports, increasing dependence on domestic revenues and reducing dependence on foreign aid.
According to the paper, successive IMF and World Bank programmes - which were accompanied by poor government performance, high public debt and continued budget deficits - contributed to a weakened social protection system and increased poverty rates.
Over the decades, Jordan continued to acquiesce to the IMF's economic policy of moving towards more economic liberalization and reduced social protection programs, which have been limited to only the poorest segments of society, without offering practical alternatives. This has further contributed to the impoverishment of more Jordanians, as stated in the paper. The Jordanian government’s failure to implement tax reform programmes to achieve tax justice and to provide funding to support large-scale social protection programs has compounded these challenges.
The increasing percentage of poverty and unemployment strongly indicate that the social protection floor is insufficient, and as such requires further attention and a review of existing social measures.