Jordan Protests Lead to Ouster of Prime Minister Hani Mulki

In an attempt to quell the protests that have rocked one of the Middle East’s most stable countries over the past week, Jordan’s King Abdullah asked the country’s Prime Minister Hani Mulki to resign on Monday.

Hundreds of thousands of Jordanians had taken to the streets in opposition to a proposed tax hike in what became the largest protests the country had seen in years. Jordan has remained a bulwark of peace and stability in a region rocked by armed conflict, but international economists claimed that the country still needed to make serious economic reforms. Jordan is heavily reliant on international aid and has a national debt equal to around 95 percent of its gross domestic product.

The International Monetary Fund suggested that Jordan raise its sales tax and abolish bread subsidies, among other measures to increase tax revenue and slash the budget deficit. But these policies, supported by the pro-business prime minister, were exceptionally unpopular with Jordanians. Some said that the tax hike would disproportionately affect the country’s working middle class.

“Manufacturers of food and other basic products will pay 30 percent income tax instead of 24 percent, and the hardest hit will be the citizens, who will now have to pay tax on family incomes starting at $22,700 instead of $40,000. Individuals will be taxed starting at $11,200 instead of $17,000. The government aims to increase the proportion of taxpayers from 4.5 percent to 10 percent of the population,” Zvi Bar'el, a columnist for the Israeli newspaper Haaretz, wrote in an op-ed.

“This is a step in the right direction but it’s doubtful whether anyone will trust it. Ostensibly these changes are not supposed to raise much resistance since a big segment of the population will still be exempt from income tax, due to low incomes. But this is small consolation to the narrow middle class which will have to contend with a bundle of measures which will now include the income tax, the price hikes which will follow the higher corporate tax and the price hikes set in the budget,” Bar’el continued.

The country’s new political leader will be Omar al-Razzaz, a former World Bank economist and current education minister. The king asked al-Razzaz to form a new government on Monday, but it is unclear whether Jordan will now scrap the planned tax hikes in order to appease the protesters.

Jordanian media, however, reported that lawmakers had asked the king to allow them to hold an exceptional session of parliament. Many of the country’s politicians oppose the tax hikes and are expected to vote against them, while protesters have said that they will not leave the streets unless the bill is killed.