Bloomberg News

Jordan’s King Appoints Prime Minister After Cabinet Resigns

October 17, 2011

(Updates with king’s comment starting in 10th paragraph.)

Oct. 17 (Bloomberg) -- Jordan’s King Abdullah appointed Awn al-Khasawneh, a former judge at the International Court of Justice, as prime minister after accepting the Cabinet’s resignation.

Khasawneh was given the task of forming a new government, the royal court said today in an e-mailed statement. He replaces Marouf Bakhit, a former army general who critics said was slow to implement political and economic changes following protests inspired by a wave of popular uprisings across the Arab world that ousted leaders in Egypt, Tunisia and Libya.

“This was always likely to happen,” David Butter, regional head of the Middle East at the Economist Intelligence Unit, said by telephone from London. “Bakhit is taking the rap for the unsatisfactory scope of constitutional reforms in the country.”

Jordan, one of the smallest economies in the Middle East, relies on foreign investment and grants to support its budget and current-account deficits. The government has increased public salaries and subsidies since pro-reform protests broke out as part of this year’s regional turmoil.

King Abdullah has changed the government twice this year and promised to ease restraints on political parties and allow the formation of governments based on a parliamentary majority, without saying when this could happen.

Central Bank Governor

“This happens quite often in Jordanian politics,” Butter said. “Bakhit had already attracted criticism for the forced resignation of the central bank governor last month.”

Central bank Governor Faris Sharaf resigned and was replaced by his deputy, Mohammad Said Shahin. Bakhit had criticized Sharaf, who wanted the government to rein in spending amid a widening budget deficit, for being a “liberal.”

Jordan’s economy will probably grow 3 percent this year and 3.5 percent in 2012, as the regional political turmoil reduces remittances and foreign investment, Finance Minister Mohammed Abu Hammour said in a Sept. 7 interview. The budget deficit for this year will be about 5.5 percent of output, he said. The International Monetary Fund estimates the economy will grow 2.5 percent in 2011.

Excluding foreign grants, the government had a budget deficit of about 970 million dinars ($1.37 billion) in the first eight months of the year compared with same period last year, according to the Finance Ministry. Jordan’s trade deficit in the first eight months of the year widened 19.7 percent to 4.67 billion dinars, the Department of Statistics said in an e-mailed statement today.

Message of Reform

“Political reform characterizes the current phase in the journey of our beloved Jordan,” Abdullah told the prime minister in his designation letter. “Priority must be given to the completion of legislation and laws that regulate political life, at the forefront of which are the election and political parties laws. These should be agreed upon through an effective and constructive national dialogue with the entire political spectrum and civic institutions, before they are approved through the established constitutional channels.”

The monarch also said an independent commission to oversee the elections must established.

Khasawneh, 61, is a former chief of the royal court and previously served as a legal adviser to the late King Hussein, father of the current monarch. He is a graduate of the U.K.’s University of Cambridge and was vice president of the ICJ from 2006 to 2009.

Jordan’s opposition, made up largely of Islamist groups that oppose peace with Israel as well as members of the communist party, has staged protests this year to demand reform and an end to corruption, inspired by the region’s pro-democracy revolts.

--Editors: Digby Lidstone, Heather Langan, Louis Meixler, Fergal O’Brien

To contact the reporter on this story: Massoud A. Derhally in Beirut, Lebanon at mderhally@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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