Growing Public Debt and the Interest Rate Control Policy in Jordan

Abstract

This report explores the most prominent features of the public debt problem in Jordan. It looks at the development, composition, and basic elements of the problem in addition to the serious economic and developmental issues that have been developing and branching out since the late eighties, as a result. It reviews the main historical monetary policy decisions and their impact on the structure of public finance and the manner in which the banking sector and successive governments interacted with this issue. This led to the growth of public debt, with priority given to repayment mechanisms over other public spending requirements. The report also focuses on the social impact of these accumulated economic policies and decisions, which led to growing influence of the bank ownership and management class, which turned into a financial oligarchy profiting from the flow of unproductive rents.