Jordan PM wins confidence vote amid tough challenges

Jordan's MPs on Thursday gave their vote of confidence to Prime Minister Fayez Tarawneh, who faces a tough challenge to offset a huge deficit and hold elections to meet reform demands. The vote was 75-31, with four abstentions and 10 MPs absent from the 120-seat lower house of parliament. Tarawneh, who was appointed in April to push through a package of reforms and laws needed to hold general polls this year, has acknowledged that the country's economy was "much worse than I expected." His government, which needed the confidence vote to be able to function, plans to raise commodity prices and taxes as part of an austerity package to avoid a mammoth deficit of around $3 billion in this year's $9.6-billion budget. "The hikes in commodity prices will focus on luxury items. Shouldn't the price of cigars, for example, be raised?," Tarawneh told the MPs before the vote of confidence. He said the government was looking into means to increase in the prices of electricity and some fuel derivatives -- a move seen by economic analysts and the powerful opposition Islamists as "very dangerous" and likely to aggravate political instability in the country. Other austerity measures, which are expected to bring in $425 million to state coffers, include cuts in government spending, a freeze on hiring and a hike in taxes on some banks and mining companies. Tarawneh told legislators the army and security services have postponed "construction projects worth 150 million dinar ($211 million)" to help address the budget deficit. He also warned that the deficit could exacerbate the country's overall debt, raising it to $24.6 billion by the end of this year. The 2012 budget had projected a $1.5-billion deficit -- 4.6 percent of gross domestic product. Jordan has witnessed regular street protests since January 2011 demanding sweeping reforms and tough action against corruption. The Muslim Brotherhood, other political parties and youth groups plan on Friday mark Jordan's independence from British rule, by holding pro-reform demonstrations across the country.