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    06-Sep-2022

Individualizing Public goods in Jordan - By Yusuf Mansur, The Jordan Times

 

 

The writer is CEO of the Envision Consulting Group and former minister of state for economic affairs.
 
The middle class in most countries supports economic development through its demand for public goods and by requiring government accountability to promote an improved welfare state, and thus reduce inequality and poverty.
 
 
 
In Jordan, instead of demanding better spending by the government on public goods, the middle class, encompassing 30 percent of Jordanians, seemed to have individualized (made private) the demand for public goods. In other words, as the numbers show, the middle class opted to replace the government in the provision of such goods.
 
A public good is a product that an individual can consume without reducing its availability to others, and from which no one is excluded. Examples of public goods include roads, police and army protection, primary education, clean air, etc. Typically, public goods are provided by governments through capital expenditures, and they are not profit. On the other hand, individualizing public goods means that individuals opt to provide these goods or services themselves.
 
Many of the services that are typically delivered by the government in Jordan are being provided by the market system through individual spending. For example, 33 percent of children go to private schools, while 67 percent are enrolled in public schools. In terms of higher education, 344,796 students were enrolled in universities in Jordan in 2020–2021, 27.5 percent of tertiary education students are enrolled at the 17 private universities, and the remainder at the 10 public universities.
 
The public health care system shows another departure from public to private supply. Of the 122 hospitals in Jordan, 72 are private, 33 are governmental, 15 are military and two are university hospitals. Clearly, the number of private hospitals far outweighs that of public hospitals. Complaints regarding the public healthcare system and attacks on staff at these hospitals may be additional evidence of the level of public frustration and lack of trust in the system.
 
How about drinking water? According to a study conducted by the Jordanian-German Water Program, around 80 percent of the central region’s residents buy bottled water, which seems to be widely spread. According to the Ministry of Health, there are 32 water bottling factories, 542 local water purification plants, and five mineral water bottling plants.
Many of the services that are typically delivered by the government in Jordan are being provided by the market system through individual spending.
What about public transport? It is true that the government provides adequate roads, but public transport on these roads is mainly provided by the private sector. The number of registered vehicles, as reported in December 2020, stood at 1,728,144. Since there are restrictions on vehicle ownership by non-Jordanians, one can surmise that there is a vehicle for every five Jordanians, which is the average household size.
 
Furthermore, year-on-year, there was a 3.25 percent increase in 2020 over the number of vehicles in 2019 (1,673,759). Note that the rate of increase is higher than the population growth rate in 2020, which was 1 percent. This is simply because the rate of increase is commensurate with the rate of entry of youth into the job market, not the population growth rate.
 
Among the negative impacts of such individualization of public transport is the stress on the environment through carbon emissions, and the balance of payments deficit — in June 2022 alone, Jordan imported 8,148 vehicles, valued at JD105 million, and JD10 million in spare parts.
 
What about electricity generated by photovoltaic cells? In 2019, around 15 percent of all households in Jordan were equipped with solar-based water heating systems. Had there been more incentives and fewer restrictions, the number would have easily risen to more than 30 percent.
 
In almost each of these public or semi-public goods, the ratio is close to 30 percent, which is also the percentage of the middle class. Could this mean that the middle class of Jordan has got tired of requesting the government to improve its services and opted instead to individualizing such public goods? Does it also mean that there is a lack of satisfaction or trust in government services? The numbers do support such conclusions.
 
 
Yusuf Mansur is CEO of the Envision Consulting Group and former minister of state for economic affairs.
 
 

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