February 25, 2018 / 3:23 PM / in 6 months

Jordan PM reshuffles cabinet to soothe anger over poor economy

AMMAN (Reuters) - Jordan’s Prime Minister Hani Mulki reshuffled his cabinet on Sunday and appointed the king’s chief of staff as his special deputy for economic affairs in an apparent bid to soothe widespread anger over rising hardship and flagging growth.

Jordan's Prime Minister Hani Mulki speaks to the media after the swearing-in ceremony for the new cabinet at the Royal Palace in Amman, Jordan, June 1, 2016. REUTERS/Muhammad Hamed/Files

Mulki’s reshuffle, his sixth since coming to power in May 2016, comes three days after hundreds of protesters in the city of Salt, 30 km (18 miles) west of the capital Amman, demanded his resignation and called for the king to force the government to roll back price increases and end high-level corruption.

The monarch later issued a royal decree approving the appointment of Major General Fadel al Hamoud as new police chief in a shakeup that two officials tied to the events in Salt city and recent law and order lapses.

Earlier this month Mulki avoided a vote of no-confidence in parliament after deputies sought to bring down the government over the price hikes that raised taxes on most consumer and food items and some fuel items. This was followed by a doubling of the prices of subsidised bread.

Jafar Hassan, chief of staff of the office of Jordan’s King Abdullah, takes up the post of deputy Prime Minister for economic affairs, a role that had been left vacant in Mulki’s previous cabinet.

Hassan, a former Harvard educated planning minister, will be leading a ministerial team overseeing a tough three-year program agreed with the International Monetary Fund of long delayed structural reforms to cut public debt to 77 percent of GDP by 2021 from 94 percent now.

Earlier this year, Mulki imposed steep IMF-mandated tax hikes to cut rising public debt that have hit the incomes of ordinary Jordanians, causing his popularity to plummet.

Finance Minister Omar Malhas kept his job in the reshuffle.

Ayman Safadi, a long-time adviser to the royal family, who took up the post for the first time early last year and has been leading the kingdom’s talks with Washington over its Middle East policy, remains as foreign minister.

Politicians and economists say the tough fiscal consolidation plan and the price hikes are worsening the plight of poorer Jordanians.

Removing subsidies has triggered civil unrest in the past. Unlike previous hikes, only a few scattered protests have taken place, but slogans carried by demonstrators in the rally in Salt were the most critical so far.

“We will wage an intifada (uprising) until prices go down. There are limits to our patience,” protesters chanted. Some indirectly blamed the monarch. On Friday the authorities sent gendarmerie reinforcements to Salt.

The government has said cash transfers to low income citizens have mitigated the impact of price rises.

In recent years Jordan’s economic growth has been hit by regional conflicts weighing on investor sentiment and as consumer demand generated by Syrian refugees staying in Jordan has receded, according to the IMF.

Real GDP growth was revised downwards to two percent in 2017 about one percent lower than anticipated at the start of the IMF program, and was expected to hover around three percent, almost half the levels it attained a decade ago.

Reporting by Suleiman al-Khalidi; Editing by Raissa Kasolowsky, William Maclean

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