Jordan launches new financial safety net for tens of thousands of families

They will receive financial aid and full health insurance under the National Strategy for Social Protection

Prime Minister Omar Razzaz's government has announced measures to help citizens cope with increased costs during Ramadan. Reuters

Tens of thousands of Jordanian families will receive financial aid and full health insurance under a new wide-ranging social safety net launched by the Jordanian government on Wednesday.

The government unveiled the National Strategy for Social Protection 2019-2015, a targeted social support programme of financial and in-kind assistance to remove barriers to employment and education in a country where one million citizens are now under the poverty level.

The social safety net, which aims to “break the cycle of poverty," is a signature policy touted by Prime Minister Omar Razzaz, a former World Bank economist, and comes as the government continues unpopular austerity measures.

The social net involves two-dozen ministries and government institutions and covers various sectors, including early education, solar energy, health insurance and improved secondary and tertiary care for disadvantaged Jordanians.

Billing the strategy as part of the government’s “humane state” approach, Mr Razzaz echoed his letter of designation by King Abdullah in which the monarch urged the government to improve services in the face of rising taxes and form such a safety net.

“A nation’s progress is measured by how it treats its most vulnerable; therefore a social safety net must be provided to support our poor,” King Abdullah wrote to Mr Razzaz on his designation in June 2018.

A main pillar of support is the provision of direct cash assistance to 25,000 families across the country that will begin as of Thursday. This marks a continuation of the government’s supplementary aid programme, which has encompassed 85,000 families since late last year.

Through the Ministry of Energy and Ministry of Social Development, the government will provide small solar power projects to provide electricity to 5,000 vulnerable families whose energy costs consume a large portion of their household income.

In the realm of transport, the new social safety programme will provide transportation to the workplace and school for 10,000 vulnerable families.

Another 50,000 families will benefit from an improved school nutrition programme, where instead of biscuits and milk, schools will employ local organisations to provide full meals to students.

Officials say the safety net is an “umbrella approach” to ensure all entities are cooperating to avoid duplication.  Rather than simply handouts, multiple ministers present at the launch stressed that the programme is centred on “empowerment” of Jordanian citizens to continue their education and enter the workforce.

The programme comes after nearly a year of reviewing the sources of poverty and obstacles to Jordanians’ access to education and employment, with intense scrutiny of the effectiveness of previous government assistance.

One of the findings was that among the top 10 per cent of income-earners in Jordan, 5 per cent were receiving financial or in-kind support from the government and 6 per cent of those among the 90th percentile.

Meanwhile, of the poorest 10 per cent of Jordanians, only 22 per cent of the families were receiving government assistance.

Families under the poverty line have an average of 7 persons per household, compared to an average of 4.5 for middle class and 4 for upper class Jordanian households, their findings revealed, meaning that limited income is stretched even further, requiring greater government support.

In the lowest tenth percentile of Jordanian households live on an income of JD240 (Dh1,230), compared to an average of JD400-JD471 (Dh2,070-Dh2440) for the upper 50th percentile and above.

“Spending more money doesn’t necessarily achieve good results,” said Mohamad Eses, minister of planning and international cooperation and state minister of economic affairs, in unveiling the programme. “But if we spend funds correctly and wisely, we will get the right results.”

Another major pillar of the safety net is employment. According to Mr Eses, the government has zeroed in on increasing women’s participation in the workforce, noting that at 15 per cent, Jordan is home to one of the lowest rates of women’s economic participation in the world.

“The best way to improve the situation of a household is to secure additional income by having an additional person in that household working,” said Mr Eses, noting that the safety net is set on removing the largest obstacle to women in the workplace- lack of transportation.

The plan also seeks to improve the conditions in various sectors such as agriculture, manufacturing and services in the private sector to encourage Jordanians to enter these fields and lessen the reliance on foreign workers.

In 2003, 90 per cent of all workers in the country are Jordanian, currently 60 per cent – 6 out of 10 workers – are Jordanian.

Meanwhile, by providing free health insurance to 25,000 families, the safety net aims to raise the percentage of Jordanians covered under health insurance from 71 per cent currently to 80 per cent by the end of the year, according to Health Minister Saad Jaber.

The focus on healthcare comes out of recognition that healthcare costs are a burden on many households, with Mr Razzaz noting that “if one uninsured person gets ill, a middle-class family can fall into poverty”.

The government aims to increase the rate of healthcare coverage to 90 per cent by 2025 by adding additional families, and by 2030 to have “universal healthcare coverage for all Jordanians”.

It is believed that the safety net will cost JD100 million (Dh500 million), with the bulk coming from the government budget and the remaining from Unicef and outside donors.

Officials say the strategy comes as part of a recognition that amid financial difficulties worldwide, funding for development and humanitarian organisations working in Jordan is drying up – requiring the government to do more, with less.

Amman hopes that by achieving tangible results with its “empowerment” social development approach this year, it can attract international donors and widen its programmes by 2020.

The safety protection programme comes as the government navigates a debt crisis and continues austerity measures to comply with a $723 million (Dh2.6 billion) IMF loan a year after nationwide protests over taxes brought down the previous government.

According to government statistics released in April, 15.7 per cent of citizens, some 1 million Jordanians, are under the poverty line. Unemployment stands at a near-record 18.7 per cent nationwide.