Jordan- Study launched to improve use of public finances

24 Jan 2012

(MENAFN – Jordan Times) The Ministry of Finance and the USAID-funded Fiscal Reform II Project on Monday launched a study that seeks to improve the use of public finances.

According to USAID representative Ruba Jaradat, the Public Expenditure Perspectives study was prepared by a group of Jordanian and American experts, who offered recommendations to enhance the path of government spending in order to achieve fiscal sustainability.

The report identified several areas where the government can improve the quality of spending, reduce inefficiency and save scarce public resources, the authors said.

It compares Jordan with countries at similar income levels, highlighting that the challenge for the country is to reduce fiscal pressures and to achieve higher economic growth rates to be beyond its peers.

The experts warned in the report that if policy makers fail to take serious and immediate actions to avert fiscal risks, the Kingdom may fall further behind.

Among the recommendations included in the study, the team of experts suggested reducing spending on education by reducing the surplus in the numbers of teachers and school buildings.

Regarding the health sector, the study recommended the need to reduce budget costs for health by raising co-payments, increasing insurance premiums, particularly for high-level employees, better managing pharmaceuticals, rationalising tertiary care facilities across private and public sectors, and reducing bed vacancy.

“Reduce non-revenue water through efficient management of water loss,” the experts suggested, stressing that the Ministry of Finance should monitor all finances of the entire water sector in a bid to control the government’s medium-term debt strategy.

The report also urged policy makers to phase out the tax exemptions on income from exports as well as other exemptions as such measures proved to be counterproductive.

The launch of the study was attended by Public Sector Development Minister Khleif Al Khawaldeh and several government officials.