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International Monetary Fund (IMF)

Jordan’s PM resigns after days of anti-austerity protests

Prices increases and a new income tax law angered many and made Amman the most expensive capital city ion the Arab world

PUBLISHED : Monday, 04 June, 2018, 9:59pm
UPDATED : Monday, 04 June, 2018, 10:25pm

Jordanian Prime Minister Hani Mulki resigned on Monday after days of anti-austerity protests by citizens suffering from high unemployment and repeated prices increases.

Mulki was summoned by King Abdullah II after the capital Amman and several other cities were rocked by protests that drew thousands of people.

“Prime Minister Hani Mulki submitted his resignation to the king this afternoon during a meeting at the Husseiniyeh Palace and the king accepted the resignation,” a government source said, adding that the king asked Education Minister Omar al-Razzaz to form a new government.

The rallying cries by demonstrators for Mulki to step down came after the government adopted a draft income tax law and announced price increases based on recommendations by the International Monetary Fund.

Protesters had vowed not to “kneel” and earned support from trade unions as well as a majority of MPs opposed to the new tax.

On Saturday Mulki met trade union representatives who demanded the income tax law be revoked, but they failed to reach an agreement.

According to official estimates, 18.5 per cent of the population is unemployed, while 20 per cent are on the brink of poverty.

The premier’s meeting with the king came hours after around 5,000 people gathered outside Mulki’s office in Amman, on the fifth consecutive day of protests.

Jordan, a mostly desert kingdom with few resources, has seen prices of several basic goods and services like bread, fuel and electricity steadily rise over the past year.

The Economist Intelligence Unit earlier this year ranked Jordan’s capital as one of the most expensive in the Arab world.

Last month the government adopted a draft income tax law, yet to be approved by parliament, aimed at increasing taxes on employees by at least five per cent and on companies by between 20 and 40 per cent. And last week it announced a new price increase for electricity and fuel, before revoking it under orders from the king following protests.

James Dorsey, a Middle East analyst, warned that the prime minister’s departure may not be enough to satisfy protesters.

“Jordanians may this time round not be pacified by cosmetic measures like Mulki’s resignation and the temporary rescinding of price and tax increases,” said Dorsey, a senior fellow at Singapore’s S. Rajaratnam School of International Studies.

The IMF loan, intended to support economic and financial reforms, has the long-term objective of reducing Jordan’s public debt from about 94 per cent of GDP to 77 per cent by 2021.

Mulki had formed his government just over two years ago in May 2016.