King Abdullah II of Jordan has decided to cancel his trip abroad this week after realizing that a political earthquake is threatening his rule. It is estimated that more than 200,000 Jordanians rallied across the country on Saturday, after tens of thousands had demonstrated on Thursday and Friday in solidarity with a Wednesday general strike by 33 unions.
The last time economic protests threatened the stability of the Jordanian crown was in 1989, with demands to fire Prime Minister Zeid a-Rifa’I, institute democratic reforms, and renew the abolished subsidies on essential consumer products. King Hussein acquiesced to almost all those demands.
Now Hussein’s heir is facing the most critical periods of his reign, which started in January, with a new state budget that raised the people’s ire and was expressed online and in the streets.
The new budget imposes a VAT on 165 products, including basic ones. It also increases in the price of fuel, electricity and water, with a 20% tax increase on tobacco and a 9% increase on public transportation. The hikes were intended to meet the requirements of an International Monetary Fund loan, which expect Jordan to cut down its national debt of $40 billion.
Then there was the new income tax bill of Prime Minister Hani al-Mulqi, which is awaiting parliamentary approval, but more likely will be killed under the popular protests. The new income tax raised the amount levied on businesses to 40% from 35%, with manufacturers of food and other basic products pay 30% instead of 24%. Individuals will start paying income tax at $22,700 per family – down from $40,000, and at $11,200 per single individual, down from $17,000. Overall, the government announced its goal of raising the number of taxpayers from 4.5% to 10% of the population. It also made failure to pay taxes a criminal offense punishable by time in jail and high fines.
The two Houses of Parliament on Sunday recommended that Abdullah convene an extraordinary session to bring an end to the “income tax crisis.” Jordan’s News Agency, Petra, quoted House Speaker Atef Tarawneh who noted that the number of MPs who reject the income tax bill had risen to 90. He added that voting down the law is the right move to defuse the nationwide protests that have been ongoing on a nightly basis since Thursday in Amman and several other locations.
With unemployment in Jordan at 18%, the king is truly between the rock and the hard place. His first response was his go-to move over the past 19 years since taking the throne: he fired the prime minister. But that did not do the trick, and observers are beginning to suggest that even if the king suspends all the injurious innovations of the new budget, it may be too late to push the protest genie back into the bottle. The protesters have already been heard to call for the removal of not just the PM, but the king as well.
With more than a million Syrian refugees in camps throughout his country, with a rise in poverty, and with the ongoing civil war at his country’s border with Syria – King Abdullah II has every reason to be worried.