Khaberni - Dr. Ayat Al-Shadhili wrote
In the chessboard of international finance, where the interests of the major nations and cross-continental institutions entangle, the Jordanian economy finds itself a player with high tactical skills, yet it faces strong adversaries and complex regional conditions. Discussing public debt is not just about recounting numbers, but involves a strategic analysis of pivotal decisions that determine the future of generations. This is the essence of the "Debt chess" game that Jordan manages skillfully at times and with great caution at others.
The first thing that catches the eye in this complex game is the enormous size of the challenge; the total public debt exceeds 44 billion Dinars, a figure that imposes a significant burden on the general budget that cannot be overlooked. Nevertheless, it is undeniable that Jordan's financial management has shown remarkable strategic discipline in recent years. The government has succeeded, through its commitment to IMF-supported reform programs, in maintaining a level of financial stability rarely seen in a troubled region. This commitment is not merely compliance with international requirements but a sovereign decision aimed at building international credibility, which is reflected in Jordan's ability to access financing markets on relatively better terms. The declared goal of reducing the debt-to-GDP ratio to 80% by 2028, from a current rate exceeding 90%, is a clear indication of a strategic compass aiming to establish financial sustainability. These are the commendable steps that have enabled the Kingdom to avoid darker financial scenarios.
However, as in any chess game, tactical success does not guarantee strategic victory. The real problem lies not only in the size of the absolute debt but in the structural issue that prevents GDP from growing quickly enough to reduce the ratio. The Jordanian economy continues to suffer from slowdowns in key growth engines, chronic challenges such as high energy costs, weak foreign direct investment in productive sectors, and ongoing pressure on the labor market due to regional conditions. Overreliance on traditional fiscal policy tools, such as indirect taxes or cuts in capital expenditure, may succeed in improving numbers in the short term, but it stifles future growth potential, making the path to reducing debt arduous and risky. This slowdown is the "bishop" that must be sacrificed to save the "king" (economic stability).
Therefore, Jordan's current strategy must go beyond the conventional boxes imposed by international institutions. Creative solutions lie in turning the challenge into a financial lever. Jordan should adopt the "Strategic Debt Transformation" strategy. Instead of merely rescheduling, it could negotiate debt-for-development swaps, where a portion of the external debt is converted into local investments in Jordanian Dinars, allocated to finance green infrastructure projects or vocational education programs that generate real employment opportunities. This serves two purposes: alleviating the burden of hard currency and injecting liquidity aimed at sustainable growth.
In addition, the financial leverage of sovereign assets must be activated. Jordan owns highly valuable strategic assets (such as ports, public service companies, and lands) that can be intelligently used. This does not mean selling, but restructuring their ownership or management through strategic partnerships that generate substantial non-tax revenues. Imagine if a professionally managed, fully transparent Jordanian sovereign fund became capable of generating annual revenues that contribute to debt servicing, instead of relying entirely on the pockets of citizens. This is the bold move that changes the rules of the game and turns "debt chess" from a defensive to a strategic offensive.
The battle of public debt is not a battle of numbers, but a battle of will and vision. Jordan has proven its tactical resilience, but strategic victory requires the boldness to make unconventional decisions. We must realize that every delay in adopting creative solutions is akin to a tactical error on the chessboard. The future of Jordan's economy depends on our ability to transform the burden of debt into a lever for growth, and this requires economic leadership prepared to play outside the familiar rules.
* Analyst in Economics and International Strategies
