Government reform efforts began in the early 1990s. Reform efforts were primarily focused on attaining macroeconomic stability and rectifying fiscal imbalances throughout the decade of the 1990s. By 1999, the disciplined reform efforts were successful in sustaining an efficient macroeconomic management policy, which included the gradual reduction of fiscal imbalances, and the implementation of a structural reform agenda.
Despite the success at the macro level, social development remained lagging, as poverty and unemployment remained high, and per capita income witnessed very modest growth. Furthermore, Jordan was faced with a number of other critical challenges such as a high external debt and budget deficit; a chronic water deficit; an unproductive private sector; and ineffective government services. Moreover, the economy remained highly susceptible to external factors.
Reforms were therefore reviewed in 1999 when His Majesty King Abdullah II ascended to the throne, prompting an accelerated pace of reforms. The underlying goal was to accelerate the pace and the launch of new strategies and initiatives in order to effectively enhance the welfare and standards of living of all Jordanians. One of the main initiatives was the launch of the Social and Economic Transformation Program (SETP) in 2002, which gave priority to projects with the most significant impact on the standard of living of all Jordanians. Moreover, SETP provided a main vehicle to channel qualitative public investment according to prioritized developmental needs, helped fuel the legislative reforms, and served as a catalyst to expedite the progress of many projects funded by the private sector. However, there are challenges still facing the economy and new requirements have emerged, which necessitated a rigorous review of the reform agenda for the period (2004-2006).
It is with this background that the Government of Jordan embarked on the next set of reforms. The Social and Economic Development Plan (2004-2006) aims to achieve and sustain GDP growth rates of 6% per annum by the year 2006, and lead to a growth of per capita income of 3.6% by that same year. The Government will also work on reducing poverty and unemployment through enhancing qualitative investment in rural development and introducing programs which aim to empower and enable citizens, especially youth and women, as well as encourage more private investment, in order to create more than 50,000 additional job opportunities annually.
Under the Plan, policy measures will aim at channeling additional qualitative investment into education and technical training from early childhood to adulthood in order to match the output of the educational and training systems with the requirements of both the domestic and international labor markets. Focus will also be made on providing quality basic government services that will effectively translate into a higher standard of living for all citizens, especially for the poor in remote and rural areas.
The Government will therefore continue to channel additional investments to improve the implementation as well as the monitoring and evaluation capacity of the related public institutions to enhance their delivery of services to the public, in addition to engaging the private sector on a wider-scale through the accelerated implementation of large development projects in the areas of water, energy, and infrastructure development.
The new set of reforms under the Plan continues to pay particular attention to rural development and poverty alleviation through sustained long-term economic growth mechanisms, with the aim of improving the productivity of individuals and their communities through the implementation of sustainable enterprise development, and integrated community development projects in each governorate. Moreover, the new set of reforms continues to target judicial, administrative and legislatives reforms.
The Plan was articulated to reflect all projects included in the medium term budgetary framework for the period 2004-2006. The main component of the Plan include: Human Resource Development, Basic Government Services, Rural Development and Poverty Alleviation, and Institutional and Structural Reforms.
Full version of the Social & Economic Development Plan 2004-2006