Overcoming Resistance Finance & Development, December 2017, Vol. 54, No. 4
Ibrahim Saif discusses why building consensus is key to successful energy subsidy reform
Ibrahim Saif, former energy and mineral resources minister of Jordan, has been a vocal advocate for energy subsidy reform and for weaning his country off external sources of energy. In 2015, Saif helped craft Jordan’s Vision 2025, a 10-year blueprint for economic and social development that calls for raising the proportion of energy consumption met from local resources and increasing the share of renewables. Saif, who joined the Jordanian government at the tail end of the country’s massive energy subsidy reform, predicts that Jordan will be generating 20 percent of its energy through renewable sources by 2025.
Jordan, a resource-poor oil importer, successfully reformed general fuel subsidies in 2012 after a series of failed attempts. The country’s energy sector faced significant challenges when prices of heavily subsidized energy rose sharply in parallel with increasing public demand. Facing high debt and fiscal pressures, the kingdom decided to remove general fuel subsidies. The country is still working on completing the reform of electricity subsidies.
Saif is a former director of the Center for StrategicStudies at the University of Jordan and has served as secretary general of Jordan’s Economic and Social Council. He has taught at both the University of London and Yale University, where he led courses on the economies of the Middle East. He holds a PhD in economics from the University of London and is currently an advisor to the government of Oman.
In this interview with F&D’s Wafa Amr, Saif discusses his country’s experience with subsidy reform and the promise of renewable energy sources for the region.
F&D: Can you paint a picture of Jordan’s energy situation?
IS: Jordan imports about 95 percent of its energy needs from abroad, with energy imports amounting to about 18 percent of GDP. Put simply, for each dollar we spend, almost a quarter of that goes into energy. It is quite significant, and we are vulnerable. Moreover, Jordan has an energy-intensive economy. With oil prices now lower, the country’s energy import bill is about $5 billion. Roughly 10 percent of the household consumption goes into some form of energy, be it electricity or fuel.
F&D: What prompted Jordan to undertake energy subsidy reform in 2011?
IS: Energy subsidy reform was a response to the...