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Jordan Austerity Measures
To contain its financial crisis, the Jordanian government
embraced several austerity measures in the late 1980s. It froze the
currency exchange rate and halted the operation of money changers,
who had facilitated the dinar's drop by ignoring official exchange
rates and acting as an open black market. In November 1988, the
government also imposed new import duties of 20 to 30 percent on
most consumer goods and banned a wide array of so-called luxury
imports, including automobiles, refrigerators, cameras,
televisions, telephones, cosmetics, and cigarettes. The ban on
luxury imports was to last for at least one year, but statements by
Jordanian officials indicated that it might last considerably
longer. Taxes and service charges at airports and hotels were
increased, as were work permit fees for guest workers. The
government also adopted an austerity budget that cut both current
expenditure and development investment
(see Jordan - The Budget
, this ch.).
Prime Minister Zaid ar Rifai sought to reassure Jordanians that the
problems were temporary. In a February 1989 interview, he stated
that " the Jordanian economy is active and suffers no troubles at
all. Its troubles are financial, not economic." To the extent that
this was true, however, observers noted that Jordan's successful
growth in the 1970s and early 1980s was likewise more financial
than economic.
Data as of December 1989
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