Self Censored: The King of all Solutions

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Self Censored: The King of all Solutions

March 15, 2010 View Comments

Self Censored: The King of all Solutions

Self Censored: A new weekly 7iber series.

Written by Musa Alshuqairi.

In a recent daily column Jordan’s most prominent financial analyst/commentator suggested that the real solutions needed to reduce Jordan’s record budget deficit must be “surgical” solutions. These surgical solutions come from Fahed al-Fanek as a call for the government to step away from its duties in:

Securing employment for its citizens by not only suspending employment in the public sector including health and education (because afterall public schools and hospitals are not seriously understaffed!) but by terminating the jobs of some of those currently drawing paychecks from the government (because if they were qualified in the first place they will find better jobs!!).
Subsidizing any kind of product or services, as he argues that a government suffering from massive deficit threatening the economic stability and debt cannot offer to pay for “private services” and all they can provide is public services like security and infra structure.

It is still debatable whether these measures would be enough. Take for example the cooking gas debate: reports suggest that the treasury is “bleeding” 6-7 million dinars a year to keep the cooking gas container at a fixed price despite the fluctuations in oil prices. The total cost of subsidising a product that is simply essential to lower and middle class citizens does not exceed 60-70 million dinars – or simply a mere 5-6 percent of the 1.5 billion deficit.

Following the above advice that conventional methods are not going to be enough, here are three suggested resources that we can dip into that could cut up a much higher percentage of the deficit – without having to fire 40,000 public sector employees making 250 dinars a month to save a few millions here and there:

- The Royal Second private plane: $250,000,000+ source.
In 2008, the Royal Jordanian welcomed a brand new Airbus A340-642 to its fleet. The A340-600 is a 380 to 419-passenger long-range aircraft. It is the longest Airbus airliner in operation and the most expensive one in its A340 range. The 250 million dollar cost is for the standard model and not for the royally-tricked out one, which according to some planes fan’s forums could fetch up to 350 million. With the excessive amount of traveling (to discuss economic projects that never materialise or spread the insightful message that the region needs peace now), one can’t argue with the need of a private plane.

But the other private-customised A340-200 (also long-range, wide-body with 239-261 passengers) was not that bad. It is only a 2001 model and was formerly used by the Sultan of Brunei, plus it is reportedly laying in storage right now ($45-60 million). Maybe treating oneself to such a exorbitant toy (without even factoring in the operational costs) sounded like a good idea when the visionary economic plan has not failed miserably yet (maybe those financial advisors knew what they were talking about when they said “tsk”), but in the current situation it has a feel like a homeless man investing in a 3500-dinar suit. Being one of only two private A340-642s ever made (the other owned by the Saudi SAAD airways), there will be no shortage in potential buyers.

- The Royal Automobile collection: $100,000,000
How hard would it be to find some fanatic Gulf-based prince who would be happy to pay that sum for one of the most exclusive car collections in the world. (Or in Jordanian government speak: How hard would it be to introduce a strategic partner to invest in making the Royal Automobile Museum a global phenomenon and a world-famous attraction). The car collection has no sentimental value, and it is not like Jordan will be auctioning off Petra. Actually, after selling off Aqaba, the phosphate and potash mining companies, al-Abdali, potentially Dabuq and the sole oil refinery…., giving up a bunch of over-priced meaningless cars should not be a big deal. If anything, the museum is a testimony of the Jordanian people’s legacy who managed to afford to finance the assembly of such a collection by a man who once had to sell his tricycle, then pay an entrance fee to happily look at it. Imagine the level of appreciation that the Jordanian citizens will hold for the late king if they realize how he managed to help them out of their financial crisis even postmortem. So just contact a corrupt sub-Saharan African dictator, Jay Leno, Mohammad bin Sulayyem or the Hariri offspring who is into cars and make him an offer he can’t refuse.

The Royal subsidy: 24,000,000-61,000,000
If the government is too broke to support the population’s basic needs, then the population in return is too drained to fund the luxurious lifestyle that is not remotely proportional to the country’s means and resources. Ordering the government to violate the parliament-approved tightly-crafted budget laws every now and then for publicity stunts in the form of charitable donations of 50 dinars becomes even more absurd when it is collected back within months by multiple folds through new taxes and price hikes. Instead, relieving the budget of the 23-27 million burden in the form of a personal stipend and palace expenses ( (with a potential 37-42 million dinars saving in the form of staff expenses (ie. the court)) for one or two years is a genuine initiative that would be felt by every Jordanian. It is not like anyone is asking for a full disclosure of the value of the crown jewels (yet) but maybe dipping in those “personal” funds in such tough times is the least the people who have contributed to that wealth are owed.

These are not semi-sarcastic suggestions (like say, auctioning off the one-and-done collection of Haute Couture gowns or the Marcos-esque shoe collection) and they are not even drastic measures that could affect the stability of the regime (like say, reconsidering the military share which sucks up to 50 per cent of the whole budget that is dispersed in the form of unearned benefits to high ranked officers whose minimum contribution is evident by the average waist size of all red collar officers).

These are nothing more than effective actions that will give the impression that we are all aware that we are unfortunately not a rich state and set the example that we should not feel entitled to the lifestyle of one.

[Editor's note: The leading photograph was changed to more accurately reflect the article and discussion. Also, a link was added as a source for the Airbus A340's price.]

Iman

As a first step, the Jordanian monarchy could make public all financial records of state expenditures. Queen Elizabeth II does it.

http://www.royal.gov.uk/pdf/annual%20report%200...
aseel

I totally agree with you, and i think that the Jordanian society as a whole is adopting a similar lifestyle, more or less, depending on each person's economy. We have become so concerned with the exterior, what appears to be, and have forgotten to solve the real problems, we have forgotten what it means to be modest, to be content with what we have. This is why we will never become a self-sufficient society.
Sufian

Great job Mousa, until we all point out the bullshit that is happening in this country, it will never change!
Gadir

Haha true but you cant blame him, he comes from a city in the South renowned for Jameed making. But you didnt answer my question regarding the plane is it for the Royal Jordanian or the family.
Musa

Gadir,
The whole issue of the army, its role, and its budget is an issue for another debate that we can start soon. Of course, as long as we stay objective and avoid empty patriotic rhetoric while "jaishana jaish alwatan" plays in the background.
Thanks for the link.
Here are links to a picture of the one he has just replaced:
http://www.watanynews.com/thumbnail.php?file=67...
The assumption that all high-ranked officers are out of shape as a result of minimal duties and activities was based on an unscientific conclusion relying on a mere observation. Although I insist that the chances of a huge belly increases exponentially at the sight of a red collar, hopefully, there would be an internal study that would gauge the fitness level at the top order and hence prove me wrong.
Gadir

To Mr. Musa

While I appreciate, your insight into the ways to preserve the jobs of people in the public sector and subsidies on cooking oil. I didnt get your first point is the new plane for the Royal Jordanian or the Royal family. If it was for the latter I would agree with you.

The second point is un-realistic and doesnt change alot in any way. It is un-realistic because not only as one of the comments states it has a sentimental value but I dont think anyone would buy it. Most of them were presents given by friends and leaders. If your friend bought you a book for your birthday, when you friend is King Fahed of Saudi Arabia or Sheikh Zayid he gives you a car. Away from that its not a solution as many agree and you put it in there for the rhetoric.

The Third solution, while you started off talking about the courts budget, I couldnt see how attacking the Military as an institution has to do with any of this. Which revealed more than a real concern for the average Jordanian but bigotry against one of the last preserved Institutions of the Jordanian state. I assure you that the officers and soldeirs are under paid and they are the ones taking the negative effects of the bad economic policies. Any patriotic Jordanian would know that the first and foremost resource of Jordan is its security and that in the area we live in a large military budget is a given. We are not bordered by scandanivian countries, do not fool yourself. Saying something like half of the budget is taken up by the military is inaccurate when you know that 1/2 of the United States assistance goes to the military and that this is a fixed plan. We cannot go and tell the U.S. we want the whole 600 million for civlian purposes.

To reply to your rhetoric with some of mine, I bet you the red-collar officers could out-run you and most of your fat blogger friends. Leave your out-dated sarcasim to the Kuwaitis, here is a link for the cheif of staff whos waistline is that of an impoverished African kid :

http://petra.gov.jo/Temp/Images/Original/News-1...

note: he is the one on the right, the one on the left is Kuwaiti.
Med-student

Yes but did you know the the son of our Chief of Mohammed Zaben Staff has a son studying Medecine in Romania on a scholarship paid by the Army, an uneducated brat that has failed Med-School and was banned from enterying Romania because of doubtful condut, after several attempts the Visa Ban was Removed by the Romanians as a courtesy Gesture to Jordan...This guy walks now among Jordanian and Plaestinian cooleagues(we barely finance our own tution fees students...) as if he is the son of the Chief of Staff the U.S army...

Yes the writer of this article is right the military institution is totally unproductive and corrupt as all Jordanin public institutions are
Yasmine

Even if we come up with ways to generate more domestic income, it will probably go to the wrong people –those who don’t need it nor deserve it-.

Let me quote Sweeney Todd" there are two kinds of me in the entire whole human race, there are two kinds of men and only two. There's the one staying put in his proper place and the one with his foot in the other one's face," in our case that is somewhat true.

While several officials were charged for spending silly amounts of the State's money in Britain and other nations, our beloved officials find their posts a great opportunity to score big-sadly- leaving the poor people (who I doubt they know or recognize) to face the world on their own.

Where are all those international aids? Where is the Domestic income of commerce, tourism and other sectors? The embezzlement from the Ministry of Agriculture case proves that corruption exists at large…
Guest

Dear MAHA
i would like to thank you for you comment which shows intellect but lacks genuinity and
ethical backgrounds in certain parts of it. I totally agree on what you said about the governmental
employees and ex-employees , and the drilling and the fashion taste of our queen ..etc .but come to think
about it its the rich people and the middle class who actually pay taxes and all other kind of governmental
revenues now i know that that's exactly what the situation is supposed to be , but you missed a bog part of it
which is that in Jordan there is a huge portion of the society esp living in other cities who actually gets
a free ride for life on ammanize expense like take for exp. a guy who finish tawjehi then joins the army
works there for till he is 32 the he retires and start getting pension without till the day he dies, to make things worse
he gets married on 23 and start providing the country with an endless supply of babies since they cost him nothing but little
now when his kid are of school age they go to public school which i don't argue is their right , but within a couple of years they
reach college of course with a 70% average now since his father who dedicated his life for our country in the army or public position ( 10 years )
he will get in bi mak3ad jaish aw abnaa2 ishi min hal ashyaa2 ,,,then the cycle goes on and on !so a guy who gave nothing in life to his country
is the main reason why the social security system is falling apart and our country is stuck with a huge deficit !
about the car and gas suggestion i think it doesn't make any sense since we already pay more than fuel actually cost the government
it does not make any sense that a Jordanian middle class person with an income of 1000 JD A MONTH with a whole family to support
has to pay more for gas than a stupid drunk red neck in Texas with no one to support ....just the idea of you wanting the rich to pay more
and not enjoy life make Jordan a grim place to live in ... people who worked hard in their life are entitled to get what they want
after 30 years of working their asses off even if its a big ass fuel eater ! its called capitalism isn't that what our government want Jordan to become!
so in conclusion just lets dump the stupid people of our society and focus on Amman ! it hurts i know but it is the truth !
peace
ajnabi

you seem to be implying that the middle-class work harder than the rest in Jordan. bizarre.
ma7moodjo

hahaha i dont know if you are just being sarcastic or you are serious ... hell yea the middle class of amman and zarqa to some extend are the ones who are taking the fall for the ignorance of our society !!!
Maha

The above "effective actions" and surgical solutions are just like liposuction, the government is very fat and a liposuction will definitely make it look better, but it's only a matter of time before it's fat again since it has not changed its diet and habits.

Selling off assets to reduce liabilities will not help and is never a long term strategy, the government needs to generate more revenue from the right sources and drastically reduce it's expenses everywhere not just the royal court's expenses.Yes it's inconsiderate when the queen of a starving country is the ultimate royal fashionista, but those expenses are marginal peanuts compared to the government's waste of money and resources. consider the following:
-the lifetime benefits package and exclusions anyone who has held a title in government for a year gets.
-the outrageous waste of time and money when they drill up a street 3 times for 3 separate reasons, or building a bridge that contributes nothing to the none existing traffic problem on a rural street.
-Rich people in jordan don't pay enough taxes and everyone has a was6a to get out of taxes, fines, and penalties. If citizens pay their fines and penalties government generates revenue and there are less repeat offenders.
-luxury taxes could generate good revenue, guess what? when you have 6 million people and 6 million cell phones that's a luxury, tax talking!!
-if you can afford smoking, you are not too poor to be taxed, tax tobacco and stop covering expensive cancer treatments bi i3fa2at min el diwan, if you smoke and get cancer you are asking for it, pay for your own treatment or die.
-encouraging foreign investment doesn't mean giving corporations everything for free,benefits upfront and selling the country left and right. The QIZ companies employ the minimum number of Jordanians and are really sweat shops full of Asians, how do they benefit the economy?

All the above are just small examples of what needs to be done...diet and exercise for life.

Regarding the cooking gas as an example it will be a very stupid thing to stop this subsidy as a budget cut, it won't make much of a difference and it will hurt the poorest of the people. the government's focus should be on increasing gasoline prices, if you can afford 6000 CC car you can afford its gas, but what if you drive a government car, or have a special custom free license, in either case pay the bill you should've made a smarter choice when u got the car, the reality is that the revenue generated from gasoline taxes will be offset by a big expense since the government will turn out to have the fatest gasoline bill. at which point they should consider fuel economic hybrid cars instead of gas gusling SUVs Or maybe reduce their ridiculous fleet. If the government wasn't the biggest gasoline consumer it would have raised prices a long time ago.
zeidinio

7iber has grown up !! congratulations my friends. Wonderful piece.
Musa

Mahmoud,
Here is a the link to the General Budget Department, followed by the link to the details of the budget laws over the past five years. You will notice that 23-27 million number used for the royal cut is a little conservative and does not take into account the expenses for the main harbor of corruption in this country known as the court.
http://www.gbd.gov.jo/ar/
http://www.gbd.gov.jo/ar/pages.php?menu_id=153&...
As for the planes here is the airbus 2008 price list:
www.airbus.com.c.footprint.net/.../media_object...

Eyas,
The assets of the royal family ARE and should be an issue for questioning - especially when you factor in their modest background documented in various stories since the first prince, and Jordan's limited resources. Unless king Hussein was a successful business man (or won the lottery) and we never found out.
Eyas

They are an issue for questioning, indeed, and I think a healthy population and a healthy relationship between the vast majority of the people and the leadership requires scrutinization, accountability, and openness, agreed. However, from your phrasing I see you suggest that you are almost entirely certain that the monarchy - at some point or another - did acquire assets/funds in a "wrong" way. And truth is, there is a wealth of possibilities, not so much different from how Nuquls may have become rich, or whoever else. Especially at the early times of the kingdom, I can think of many instances of time in which the king's weak position, combined with jordan's centrality to some countries, motivated them to directly support the monarchy's position. I'm not trying to argue either way, I'm just trying to balance the assertions out, and saying we know nothing unless something is said and proven.
ma7moodjo

Musa i really appreciate your fresh take on this subject, but with each comment am getting a feeling that there is more to it than what you say , and its fine you can be against the monarchy its your choice but if you keep giving those remarks some people will use that to under appreciate the article, by playing patriotism card !! your criticism is welcomed but you syncretism is a bit over the top . yes its fucked up that everything in jordan is shady and concealed and that you can't know anything about our beloved monarchy or prime minster or even parliament members or even small employees in the middle of gods know where in ramtha ! but its just the way things are i don't think its any of my business or right to be honest to know how much money the king has or how much money he spends daily or how many dress HRM buys in a week , but on the other hand i think its my full right to see our monarchy showing us that they feel what we are feeling and going through and understanding our circumstances i mean i know the king will never worry about his car gas but i would like him to show that he cares about how the rest of us deal with that.. just with him turning down the bling bling for a while or the endless black cars of the court that every little boy who has a dad who works there or is remotely related to the royal family or some1 who works there uses as their boy toys running red lights and closing streets and tailing cars with the dim in your eyes.... that just makes you feel that you are being used by them ! which is not true....
am sure we're gonna talk abt this for a while :P
cheers
boog3ee

Giving this a second read i am sorry to say that it is sounding more and more, well, at best, irresponsible!
While Al Fanek's idea's seem to fall short of solving the problem these idea's dont even begin to address it! liquidizing assets wont solve the problem of high running costs of a country, at best it may postpone facing concequences but it doesnt solve anything... that of course if we assume that the numbers mentioned in this article are correct.
rimasaifi

question answered at the editors note
ma7moodjo

wow man ... finally i find someone with a good point !!! so u are against the lifestyle of our monarchy economically speaking setting aside politics ... and man yes it is stupid how governmental jobs have been a way our government" with the knowledge and blessing of our rulers " used to lower unemployment and make the economical picture of our country seem bright to the naive !!! now just out of curiosity can you man send us the references to those numbers i really want to know how you got to know about these things ... usually petra does not include the shopping spree bill of the court in their articles about the trip "to discuss the plans of enhancing the economic cooperation between the two countries"!!
peace and thanks for a daring article!
Musa

Eyas,
Regarding the economic deals, it is evident that most the time the Petra-templated press releases using the term "discussed the plans of enhancing the economic cooperation between the two countries" is just a tired cliche poorly attempting to justify the never-ending world tours. A frequently-used example is the annual pilgrimage to Brunei where despite three trips over the past three years we have not seen any sort of Brunei-based investments in Aqaba or elsewhere. Besides a few hotels and a few sweat shops there has not been a slew of foreign investors flocking to the country. Of course the current status of Jordanian economy is the glaring evidence that these economic deals are beyond futile.

Describing the museum as a "a fluid source of continuous revenue" is a failed attempt at humour on your part, given that the entrance to the museum is free and that the royal museum law (118/2007) specifies that the museum is funded by a share from the budget allotted for the Royal Court in addition to the revenue it generates - which clearly means that simply maintaining the museum is another burden on the budget.

Without getting too economically immersed in assets versus spending - and especially that you seemed to completely miss my analogy of crown jewels - the point that you may have missed is that the royal lifestyle (starting with the last ruler and expanding under the current) does not proportionate to the country's resources. And the "assets" that have been collected belong to the people.

Mahmoud,
Regarding Fahd al-Fanek's argument I do agree with some of his points - with some reservations of course. You simply cannot run a mixed system of capitalism and socialism - with an open market yet with heavy government involvement. HOWEVER, the regime has historically used employment in the public sector (and more evidently in the army) as a tool for buying allegiances. It is just unfair and unrealistic to try to reverse that overnight by dumping tens of thousands of employees. PLUS, where is that private sector that is going to absorb those people? If the government will not take the responsibility of securing the employment for its citizens, that means that it is not qualified to preside over a functioning state. Finally, I would have loved to see al-Fanek make that same argument but in regards to the budget-draining army (and that's a whole different story there.) At the end of the day keep in mind that it will take laying off 80,000 employees making 250JDs to save the same amount of money that is reserved for operational costs of the royal palaces.

Ramsey,
I just downloaded a few pictures of old Rolls-Royces, a BMW M1, a few Ferrari's and a gullwing Mercedes and I felt absolutely nothing.

For more on spending you can visit
Eyas

Regarding your response,

For entrance to the museum, my knowledge (from experience dated a few years ago), is that it is only free to Jordanian citizens, and that tourists are asked to pay a sum of money (5 JDs if I remember correctly). Others might argue that public spaces (just like parks, etc) are good, but I won't venture there to begin with (since I agree, we're not in the financial position that allows us to think about this now anyways).

As for the crown reference, my response was actually to the comment you wrote in parenthesies "(yet)", which I felt indicated that, at some point, something such as the crown or other illiquid assets should be questions, and thats why I said I disagree.

On the royal lifestyle, I did not miss your point, and I actually tried voicing such acknowledgement to your point in my first paragraph (or two), however, I think any scrutinization should be with things that are being bought/spent right now, if any.
Eyas

All in all, I would very much welcome if those in power, and our royal family were to take their own measurements. I.e. to mirror the situation of the government's finance or the people. Certainly.

As other people said, its a very daring piece, and I'm glad you wrote it anyways. That said, I do have a few comments on the matter.

First, when it comes to the second private jet, I wholeheartedly agree and I would be very happy to see something done about this. I'm also looking forward to see if any sort of authority would maybe say something about this, or if anyone would note a comment like this and decide to take action.

However, on what you say about foreign investment, I think thats an unfair statement. Many economic deals are not only talked about, but are signed and go into action. And many of these pay off. Yes ago we erased (around third?) a good portion of our national debt. But that's out-dated. Even now, many of the economic deals we try to achieve (and do, in many cases) attract foreign investment, especially in places such as Aqaba, etc. I am not here to argue that our economic benefits exceed the running costs of a private jet (though I'd venture to guess they do), but saying attempts to economic deals are futile is very inaccurate.

On the automobile collection, here is where I disagree the most. The museum we currently have is a fluid source of continuous revenue; selling the collection completely, as bog3ee indirectly points out, is all good for this year, but doesn't help at all this next year. And asking a gulf prince to buy it and invest, I can't see how different it'd be. The collection is a local attraction, and tourists in the area would often go around, I cannot see it becoming anything bigger, and at the same time I don't think getting rid of it is a smart solution either.

In general, I think criticism of the monarchy, regardless of how harsh it is, can be beneficial, so long as it makes sense. If you can point out on the *spending* of the monarchy (i.e. expand on the royal subsidy, etc.), that'd be very welcome. But talking about how much illiquid assets are worth is pointless. Ask anyone in debt, and chances are they have enough in assets to get out of debt and then some, but selling these assets, or getting rid of the continuous revenue they generate, is harmful.

Things like how much the crown's jewels cost are rather pointless, its a sum that has been paid 60 or so years ago, at a different price, by a different person, at a different budget, and is now being preserved. So please, as you continue with your daring piece in future weeks at 7iber, venture more into spending, and not so much in assets, as they are quite meaningless. (Inheriting a million dollar land plot does not make me rich.) Instead, I'd be excited to see you focus on spending, etc.
moi

excellent piece. very gald to see jordanians speaking out like this. it's about time.
ma7moodjo

dude .... first of all if the new censorship act work i think you are already bi bait 5altak :P
now for real i do agree with what you just said !!! i mean if the top of the pyramid set example maybe some other officials will feel the heat and start actually saving money !!! and not to be an asshole but mr. fanks ideas are quiet good as well i think we have had enough army personnels and governmental employees ino a5laag !! as if our government is not bureaucratic as it is !!
plus i once read on the internet that the whole of the german government in all the federations and cities use only 7000 governmental car while in jordan the number is abt 20000 and am not sure abt the numbers but i think thats alot of gas that comes out of our pockets !!
keep up the good work man
boog3ee

All this sounds good and dandy! and would probably be considered a very nice gesture. Now i am no economist or expert in the budget, but a question presents itself at this point: what about next year's budget?
faridafarouk

Great piece! powerful and daring! I think addressing such issues is one way of bringing about changes and what better way is there than on 7iber, we need more people to be upfront and speak out by offering valid and realistic solutions that are "effective solutions" as Musa put it.
ramseytesdell

even if the cars are worth that much, i do think they have some sentimental value.
rimasaifi

Intresting
Mohanned

I don't know,but I never liked bond movies ;)
ma7moodjo

we can get BOND to win us some money with poker ... we'll finance his trip to VEGAS and make him wear a jordan 1st shirt... or petra shirt :P " here's a publicity stunt "
and before you all think am joking .... i think this is our best choice ! i mean that way no body will sell cars, or plans or any other basic life requirement :P , and we don't have to pay our asses off ! its a win win situation !