Finance Minister of the year, MENA 2008
GlobalMarkets, is part of the Delinian Group, DELINIAN (GLOBALCAPITAL) LIMITED, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 15236213
Copyright © DELINIAN (GLOBALCAPITAL) LIMITED and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Polls and Awards

Finance Minister of the year, MENA 2008

Hamed Kasasbeh, Jordan

The difficulties facing Hamad Kasasbeh, Jordan’s finance minister, in the last year have been complex and challenging. He has had to control inflation while reducing long-standing subsidies, maintain budgetary discipline while oil prices have remained high and renegotiate the country’s debt to the international community.

But Kasasbeh has addressed the difficulties of modernizing a poor and emerging economy with a professional efficiency and political sensitivity that has impressed independent analysts and other foreign observers.

This year’s IMF appraisal acknowledged the policy challenges facing Jordan but also praised the sustained growth rate, the determination to tighten fiscal policy, the structural reforms which “will help sustain strong macroeconomic performance” and the initiatives to reduce public debt.

Kasasbeh, has been at the heart of Jordan’s economic and financial sector for many years, working as secretary-general at the finance ministry from 2003 until his appointment as minister more than a year ago. Regarded as a skilled technocrat with sound political judgement and considerable modesty, he is given much of the credit for steering through and winning acceptance for the economic reforms of the last five years.

At the top of the list of achievements has been his ability to steer through reforms which lifted universal subsidies on fuel and basic foodstuffs and replaced them with much more targeted support. His success in piloting through changes that had previously seemed impossible could also act as an example for other high subsidy, low-income countries in the region – and they have earned him the respect of international economic analysts.

“In the face of rising food and oil prices, he has managed to remove at a politically acceptable pace overall subsidies while balancing social and fiscal pressures. By providing support through increases in wages, pensions and social spending to the most needy, he has ensured that those who need support receive it while allowing prices to rise,” says Farouk Soussa, head of Standard & Poor’s sovereign ratings team for the Middle East.

Scrapping these subsidies will, says the finance ministry, reduce public spending by some $287 million this year – a vital saving at a time when there are other pressures that are making it harder to continue the strategy of reducing the budget deficit.

Arguably the toughest current challenge is dealing with inflation, which is being driven up to around 10% by higher oil and food prices. Most of these products have to be imported – and Jordan has been particularly hit by the ending of subsidies from oil imports from neighbouring states like Saudi Arabia.

In Kasasbeh’s opinion, inflation is the most important challenge facing Jordan, closely followed by the budget deficit. “There is a relationship between the two,” he says. Jordan’s position has been further strengthened by the support of the international community, demonstrated by the successful agreement earlier this year for a Paris Club debt buyback.

In March Kasasbeh finalized this $2.4 billion buyback operation, which covered all previously rescheduled non-concessional debt, which was retired through a payment to Paris Club creditors. The operation involved a principal face value reduction of 11%, with revenue for the operation covered by privatization revenues and external grants.The agreement reduces Jordan’s debt burden, reducing external debt from 46% of GDP to 28%, sends a positive signal to investors, makes a saving in the external debt servicing equivalent to 1.25% of GDP and reduces the non-dollar share of external debt. 

Gift this article