AMMAN: Jordan's prime minister announced a surprise pay raise for civil servants and expansion of a state subsidy program Thursday. It follows a government announcement last week of a $125 million package of partial subsidies for fuel and staple products like sugar and rice. Speaking at a special parliamentary session focused on ways to alleviate the burden of the poor, Rifai put the price tag on the additional subsidies and raises at $425 million in 2011. The new package includes a raise for civil servants and an increase in pensions for retired military and civilian personnel as of Jan. 1, Rifai said. He also said it expands the current subsidies to cover livestock and liquefied gas used for heating and cooking. “The rising prices of foodstuffs and fuel is not a Jordanian government decision,” he said. “It's the result of a global increase in prices.” Jordan is saddled by a foreign debt, which swelled by $4 billion to $15 billion last year, an inflation which jumped by 1.5 percent to 6.1 percent last month, unemployment and poverty – estimated at 12 percent and 25 percent respectively. “The problem we face is accumulative and caused by an unprecedented deficit,” Rifai said, referring to a record budget deficit of $2.1 billion, which the government had planned to reduce by 30 percent this year. Meanwhile, in Washington, unemployment in the Arab world is an “increasingly urgent” issue. “We do see economic pressure building in the region,” said David Hawley, an IMF spokesman. “Addressing the question of high unemployment is a long-standing but increasingly urgent economic challenge.” “While the region's oil importing countries have only seen a relatively mild slowdown in growth last year, to the equivalent of about four-and-a-half percent, this growth rate is below the level required to create sufficient jobs to absorb new entrants to the labor market.”
