AMMAN / DUBAI (Reuters) – Jordan's King Abdullah replaced his prime minister on Monday to defuse the biggest protests in years that IMF-backed reform for the poor had called for.
The government's plans to raise taxes have taken thousands of people to the streets of Amman and other parts of Jordan since last week, shattering a United States-led Arab country that has remained stable through years of regional unrest ,
King Abdullah appointed Omar al-Razzaz, a former World Bank economist, to form the new government after accepting the resignation of Hani Mulki, a ministerial source said. Razzaz was Minister of Education in Mulki's government.
While some were celebrating the change of government, the chairman of the Trade Union of Trade Unions said that a strike planned for Wednesday would take place if the draft income tax law was not withdrawn.
Police chief Major General Fadel al-Hamoud said the security forces had detained 60 people for violating the law in protests and wounded 42 security forces, but the protests remained under control.
"Rest assured, Jordan is a safe country, and things are under control," said Major General Hussein Hawatmeh, head of the Gendarmerie security department, along with Hamud at a press conference.
Jordan, which has a peace treaty with Israel, has led years of instability at its borders, including wars in Iraq and Syria and conflicts in the Israeli-occupied West Bank.
But instability has hit the economy of a resource-poor country that is home to nearly 700,000 Syrian refugees. Unemployment among Jordanians is 1
Public anger over government policy has grown since a drastic increase in the general sales tax at the beginning of this year and the abolition of bread subsidies, both measures promoted by the International Monetary Fund.
In one sign, the tax increases could be postponed, the official news agency Petra said, citing the President of Parliament, the legislators were on track to demand the permission of the king to an extraordinary meeting, with the majority want to withdraw the changes.
"Our concern is the draft of the Income Tax Act, the individuals (in the government) do not care if they change, we want to change the government's approach," said Ali al-Abous, head of the Association of Professional Trade Unions ,
Demonstrators who gathered for nocturnal protests near the Cabinet said they would only disband if the government canceled the tax bill it sent to Parliament last month.
TIME FOR "MIDDLE GROUND"
Razzaz is a Harvard-trained economist who has served in both Washington and the World Bank region.
Officials He said he was an opponent of reforms that hurt the poor. His nomination, however, sends a positive message to foreign donors that Jordan will push ahead with the reforms, although they would gradually respond.
"I believe that they have time to change the law, withdraw the law, and create a new one that is more of a middle ground between public demands and what the government wants," said Mufleh Aqel, a well-known lawyer Jordanian banker.
In 2016, the IMF decided to extend the agreement with Jordan for three years to support economic and financial reform to reduce public debt and promote structural reforms.
Jordan has rejected reforms in the past because it feared a social backlash. Until Mulkis government, the lifting of bread subsidies and tax changes were repeatedly suppressed.
Jordan was shaken by unrest in 2012 when the IMF told the government to raise gasoline prices.
Mulki, a business-friendly politician, was appointed in May 2016 and was given the responsibility to revive the sluggish economy and business climate. The tax increases had dropped his popularity sharply.
The protests widened on Saturday after Mulki refused to overturn a corporate and corporate tax bill. He said it was up to Parliament to decide.
The government says it needs more money for public services and argues that the tax changes reduce social inequalities by putting more strain on the main earners. Opponents say a stringent IMF-imposed fiscal consolidation plan has exacerbated the plight of poorer Jordanians and pushed the middle class.
Jordan's economy has been struggling in recent years with the growth of private capital and aid flows in the face of chronic deficits.
Reporting by Suleiman Al-Khalidi in Dubai and Ellen Francis in Amman, written by Tom Perry and Suleiman al-Khalidi; Arrangement by Peter Cooney, Peter Graff and William Maclean