Executive Summary

This report provides an assessment of fiscal transparency practices in Jordan in relation to the requirements of the IMF Code of Good Practices on Fiscal Transparency based on discussions with the authorities and other organizations, the authorities’ response to the IMF fiscal transparency questionnaire, and other sources of information (see IMF Manual on Fiscal Transparency for further explanation http://www.imf.org/external/np/fad/trans/manual/).

In recent years, Jordan has made important progress toward greater fiscal transparency. In particular, the authorities have introduced a debt target to anchor the medium-term fiscal framework, enhanced the coverage, timeliness, and periodicity of the budget and fiscal reports, and undertaken reforms related to the budget classification and treasury management, which have contributed to improving transparency in several areas of the code.

However, Jordan fails to meet several requirements of the IMF Code of Fiscal Transparency. Though there are some important exceptions to this, in order to approach international good practices for fiscal transparency, a broad and sustained effort will be required.

The legislative basis for fiscal management in Jordan is quite comprehensive, but there are weaknesses in enforcement of the legislation The structure of the government, and the role of different government bodies, are quite clearly defined in law, but the definition of government is not fully consistent with the Government Finance Statistics (GFS) format and excludes many important government activities. The framework for budget preparation, execution and reporting has improved in recent years, but still fails to meet many requirements of the code. Fiscal data on central government (CG) operations are often available within the government and are systematically compiled and disseminated to the public. However, mechanisms for ensuring fiscal data quality, as well as arrangements for external scrutiny of the budget process, need to be improved.

In the short term, the authorities should focus on completion of ongoing reform efforts. An operational macrofiscal unit in the ministry of finance (MOF), a revised budget classification and a functional treasury single account (TSA) will greatly improve the transparency of budget preparation, execution and reporting. A second short-term priority should be simple measures to improve the availability of information and independent assurances of integrity, largely through more systematic management of existing information and processes. In addition, the budget preparation and execution process should be strengthened, including through the establishment of a medium-term budget framework. In the medium term, the authorities face three main challenges: i) to clarify the boundaries of the government and the broader public sector from the rest of the economy to ensure appropriate accountability in the design and implementation of fiscal policy; ii) to improve the transparency of fiscal policy to facilitate legislative and public debate on fiscal policy objectives; and iii) to put in place mechanisms to provide further assurances of the integrity of fiscal information.