$1.4 billion of privatization in Jordan

Q. How is Jordan's economic reform coming along?

A. For the past few years, we have been undergoing serious reforms, especially since 1998. But it takes time to show - there is a lag. We started seeing the results in 1999. There has been control of fiscal deficit: proper prioritization of what we spend on our investment in capital, capital expenditure in the budget and the rationalizing of our debts.

We are trying to limit our foreign debt and not really rushing to borrow for the sake of borrowing. We have done away with a lot of subsidies and are charging market prices. This year, we have increased prices of petroleum products, electricity, bread and animal feed.

Q. Do you have a specific road map for privatization?

A. Yes. We are moving ahead. After the JTC privatization, we want to sell part of our stake in Jordan Phosphate Mining Company. In addition, we are also discussing selling part of our potash company. We own 51 percent, so we will be selling maybe 25 percent of our potash company. In addition, we have targeted the energy sector. In the first quarter of 2003, we hope to proceed with privatization of the entire energy sector.

Q. How much do you expect to raise through these privatizations?

A. Our target for the coming three to four years is around 1 billion dinars ($1.4 billion). This year and the next year we should do over 400-500 million dinars.

Q. Is the local equity market deep enough?

A. You know in the Jordanian market there is quite a bit of liquidity. Our monetary policy is to sterilize the Jordanian dinars that come onto the market. We have large deposits. The economy is not able to absorb all of these and for monetary purposes, we need to sterilize part of these deposits from banks so as not to push interest rates very low, very quickly. And, I think with the liquidity in the market, I have no problem saying that the shares will be absorbed by the public.

Q. How important are remittances by Jordanians overseas?

A. We have over $2 billion in remittances that come to Jordan annually, and this is plenty. This is 25 percent of GDP. I don't think there is anywhere in the world with as many remittances coming in every year. Part of this money is not just laborers sending money - part of it is what the Jordanians have stashed abroad and are bringing into the country to live on.

They have kept their savings abroad and have returned to the country to invest or to build a house or to send their children to school or to pay for their new cars or to renovate their new homes. But, this money is coming in. I am not worried. We have our 6 billion dinars in deposits in our banking system. I believe that there is enough liquidity and enough investors in Jordan.

Q. What are your biggest concerns about the economy?
A. As a minister of finance, I say never to relax on your budget, you have to keep a prudent fiscal policy. Don't overspend. Keep the deficit under control. We have a foreign debt, which we have been cutting as a percentage of GDP every year, and we have succeeded. But as for the Jordanian economy, I have no worries. Now we are in the take-off stage.

We feel that this growth, that we have come beyond five percent. Hopefully, we shall reach five percent, and then go to six percent. What we really need is sustained growth to be able to fight poverty and unemployment. This is something that we have. We are doing our best, and we want to keep going at five to six percent every year in the coming years. Then we'll have a transformed economy.

Q. Do you think that things will get worse before they get better?

A. We have had the experience of privatization. We have done it when we privatized the railroads. This was a big issue. It was a loss-making institution and overstaffed. We managed to do it without anybody complaining. We compensated some people, some people went on to other jobs and so on.

For example, the phosphates sector has been overstaffed for years. But we have taken away 1,000 jobs at a hefty amount of money, and we have to keep doing that and try to find people other jobs. We now have major vocational training expenditures, and we are giving people almost minimum wage to train to do better jobs. There are not going to be layoffs. We do not take these drastic measures to throw people out on the streets. This is not our policy.

Q. What impact will a war with Iraq have on Jordan?

In the past - in the 1980s and early 1990s - when events happened around us, the country and the economy slowed down. However, now people realize that no matter what happens around us, we have to keep moving. There has been the intifada on the West Bank and it has not crippled the economy at all.

Our people continue their economic activities as much as they can, and the economy keeps moving as though nothing had happened. Our people are not thinking today of what will happen two years hence. If things happen in Iraq, of course, there is going to be some impact on Jordan.

It is stupid to think otherwise, since all our imports are from Iraq and part of it is given to us as a grant at lower prices. We will lose that, of course, and there is going to be an impact on the economy. We will deal with them if these things happen. But we cannot wait and be crippled thinking that something will happen. This is a new mentality in the country: let's keep moving, and deal with it if something happens.