Jordan’s King Abdullah decided this week to cancel his overseas trip after realizing that his kingdom is quaking. Estimates are that more than 200,000 citizens demonstrated across the country on Saturday, following tens of thousands who had demonstrated on Thursday and Friday in solidarity with the general strike called on Wednesday by 33 workers’ organizations. Tens of thousands of people clogged social network websites with slogans such as “don’t touch my salary”, “a government of thieves” and “don’t steal our rights.” Posters were stuck on gas station pumps, saying: “Brother, I don’t want to prevent you from filling up but I urge you to boycott all gas stations for three days.”
It’s hard to remember the last time such widespread demonstrations and strikes took place in Jordan. Even during the second intifada, when thousands took to the streets protesting against Israel, these were shows of solidarity which subsided quickly. The last time demonstrations on an economic backdrop threatened the stability of the regime was in 1989, when demonstrators, whose numbers were relatively small, demanded the removal of Prime Minister Zaid al-Rifai, the cancellation of the state of emergency, the enactment of democratic reforms as well as, naturally, the cancellation of harsh economic measures which included the end of subsidies and price hikes. King Hussein acceded to nearly all these demands.
Circumstances have changed but King Abdullah is facing one of the most critical junctures of his rule. Since the approval of the budget in January, public fury has spilled into the streets and onto websites. The imposition of a sales tax on 165 items, including basic products, the increase in the price of fuel, electricity and water, a 20 percent spike in the tax on tobacco and the 9 percent increase in the price of public transportation were meant to meet the demands of the International Monetary Fund which had given Jordan a loan, and to reduce the extent of public debt, which now stands at more than $40 billion. The public finds it difficult to accept the economic explanations in view of the deep bureaucratic corruption and the huge gaps between the elites that are close to the royal court and those needing to work at two or three jobs (assuming one can find them) in order to make ends meet.
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Since then the unrest has not ceased, as it turned out that the budget bill was only the first step in a series of measures. The new and upsetting surprise is an income tax bill, initiated by Prime Minister Hani al-Mulki and now awaiting approval by parliament. The bill calls for a 40 percent corporate tax, a rise from the current 35 percent. Manufacturers of food and other basic products will pay 30 percent income tax instead of 24 percent, and the hardest hit will be the citizens, who will now have to pay tax on family incomes starting at $22,700 instead of $40,000. Individuals will be taxed starting at $11,200 instead of $17,000. The government aims to increase the proportion of taxpayers from 4.5 percent to 10 percent of the population. The new bill also stipulates that tax violations will now be criminalized, rather than defined as misdemeanors. Tax offenders will now face prison terms and exceptionally high fines.
This is a step in the right direction but it’s doubtful whether anyone will trust it. Ostensibly these changes are not supposed to raise much resistance since a big segment of the population will still be exempt from income tax, due to low incomes. But this is small consolation to the narrow middle class which will have to contend with a bundle of measures which will now include the income tax, the price hikes which will follow the higher corporate tax and the price hikes set in the budget. The income tax law is still waiting for approval by parliament but chambers of commerce have already reported a 20 percent slump in purchases during Ramadan, in comparison to last year.
One cannot assess if and when the thread linking the regime to the public will be broken. King Abdullah rushed to freeze the fuel hike and he’s expected to make some changes in the new tax bill. There are expectations that he will reshuffle his cabinet with even the Prime Minister possibly being removed. These are the usual moves, undertaken by the king several times in the past even though he promised when assuming the throne that his governments would last their full term. Abdullah is realizing, as did his father, that in having to choose between painful reforms that evoke social unrest and the dismissal of a government, the latter is the preferred option.
It would not be far-fetched to assume that wealthy Arab states and the American administration will come to his rescue and support him financially. Jordan is a strategically important country in the circle of pro-Western Arab states, an important brick in the fortified wall against Iran. But when cries against the regime and not only against the Prime Minister are heard during demonstrations, with calls for removing the king, a larger outburst could prove to be a surprise, taking a dangerous political turn. King Abdullah has proven during his 19 years’ reign that he knows how to handle crises and keep his kingdom afloat, but this time the waterline may not suffice to placate the public, which is also funding more than a million refugees, who have raised unemployment levels to over 18 percent.