June 7, 2018 / 10:17 AM / a year ago

New Jordan prime minister starts talks on building cabinet amid protests

AMMAN, June 7 (Reuters) - Jordan’s new Prime Minister Omar al-Razzaz started talks with lawmakers on Thursday aiming to build a cabinet to tackle the debt-ridden country’s economic challenges and calm the biggest protests in years.

King Abdullah tasked Razzaz, a former World Bank economist, on Tuesday with heading the government after Hani Mulki resigned to defuse public anger over economic policies in Jordan, a U.S. ally that has mostly escaped years of regional turmoil.

Despite the change in leadership, hundreds pressed ahead with protests overnight, rallying near the Cabinet office with picket signs and flags. Plans to raise more taxes have brought thousands onto the streets since last week.

Harvard-educated Razzaz, who served as education minister, has now started consultations in an effort to pave the way for reviving confidence.

“The priority is to consult with the MPs, senate and unions, first over the draft income tax law,” Razzaz told reporters outside the parliament building after meeting the speaker. “We will hold many meetings and by the end of today, we will be able to reach a clear vision of the future.”

Razzaz hoped this would comfort Jordanians and pledged to listen to them. “We have to take immediate measures to return to the right path,” he added.

Jordan has a large public debt and is pushing consolidation measures mandated by the International Monetary Fund (IMF) including tax rises and subsidy cuts that have weighed on poorer and middle class families.

Jordan will ask the IMF for more time to implement reforms after the wave of protests showed that pushing the country beyond its means risked instability, officials said.

Some big unions went on strike a day earlier to demand the end of the tax bill, though the walkout brought smaller crowds than previous rallies.

Public frustration grew after the end of bread subsidies and a steep hike in the general sales tax this year, under an IMF plan to cut the Arab nation’s $37 billion debt.

The government has said it needs funds for public services and argues that the reforms would reduce social disparities. Protesters accuse the build up of the government’s policies of hitting the poor and squeezing the middle class.

The king, widely seen as a unifying force, has called for a review of the entire tax system and dialogue over the law with political parties, unions and civil society.

His comments suggest the government could shelve the income tax law, which it sent to parliament last month, and slow the pace of price rises. (Editing by Matthew Mpoke Bigg)

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