MPs to hold crunch session on inflation

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Lawmakers in Jordan will hold a special session next month to discuss measures aimed at tackling the skyrocketing costs of living in the kingdom, it was announced on Wednesday.

Around 60 MPs demanded the issue be brought to the table immediately and said must be discussed before any deliberation over the final budget for 2008 is submitted in late January, the Jordan Times daily reported.

The budget includes the phasing out of remaining subsidies on petroleum products and food in a bid to rein in the budget deficit, which runs the risk of creating social unrest following sharp rises in prices of imported wheat and energy products.

Lawmakers are expected to seek guarantees from the government that it will find a way of helping citizens cope with the increase in the cost of fuel and food when subsidies are lifted.

Analysts expect the lifting of subsidies will drastically affect pricings, placing further pressure on struggling low- and middle-income households.

But analysts say the outcome of the session is unlikely to impact the final vote on the budget, in which expenditure has been set at 5.225 billion dinars ($7.36 billion) for 2008, up 13.4% from a readjusted 2007 spending figure.

The government has forecast a budget deficit of 724 million dinars or 5.6% of gross domestic product (GDP).

Hamad Kasasbeh, Jordan’s finance minister, has responded to concerns by announcing a 301 million-dinar social safety net last week, designed to “help beneficiaries cope with the ramifications of lifting subsidies on certain items”.

The programme will also provide for an increase in the salary of civil servants, army personnel, school teachers and other workers to help offset the negative impact of rising prices.

Prime minister Nader Dahabi has vowed to employ special measures to help combat unemployment and to construct homes for low-income citizens.

Recognising the urgency of the issue of rising costs, King Abdullah implored the government to make issues of the economy a top priority in the nest few years.

“Our vision for Jordan’s future is clear and ambitious; its pillar is comprehensive reform and modernisation,” King Abdullah said in speech to the parliament in early December. “This is the duty of all: myself, the government and you, the two houses of parliament,” he said.

MPs will also use the special session, slated for January 8, to address issues regarding day labourers and the construction of economic development zones, designed to attract much needed foreign investment and lower unemployment.

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