Omar Al Razzaz Image Credit: AFP

Amman: Jordan’s King Abdullah issued a decree on Thursday forming a new government led by a former World Bank economist and mandated to review a disputed tax system after widespread protests against IMF-driven austerity measures.

Abdullah, a US ally, appointed Omar Al Razzaz, a Harvard-educated economist outside the ranks of the traditional political elite, last week to replace Hani Al Mulki, a business- friendly politician who was dismissed to defuse public anger that led to some of the largest protests in years.

Thousands of Jordanians took to the streets in Amman and in provincial towns earlier this month against a series of tax rises since the start of the year. Protesters called for sacking the government and scrapping a tax bill which unions and civic groups blamed for worsening poverty and unemployment.

Al Razzaz’s 28-member cabinet is dominated by a mix of conservative politicians and Western-leaning techocrats who held sway in previous administrations, including seven women, a copy of the royal decree showed.

Official sources said the government is expected to maintain traditional support for US policies in the region and continue with International Monetary Fund-guided reforms.

Al Razzaz won’t have much time to deliver on promises to rescind a proposed tax increase and implement economic reforms with more consideration for the country’s struggling poor and middle class.

Union leaders who toppled the previous prime minister last week through widespread protests say they will go back to the streets if his successor, Al Razzaz, does not deliver.

Al Razzaz, a former senior World Bank official, faces a tough task: He must defuse public anger at economic policies seen by many as unfair, while introducing reforms that can reduce Jordan’s debt-to-GDP ratio to a level acceptable to international lenders.

He has promised a more inclusive path, but has also tried to lower expectations in recent days in meetings with representatives of unions, political parties and legislators.

“There is no magic stick. There is no painkiller. This is a long path, a difficult path,” he said earlier this week.

“But God willing, the target is clear and the leadership is united with the people in achieving it.”

In any reform efforts, Jordan can count on some good will from allies such as the United States, the European Union and Gulf states. Considered as “too strategic to fail,” Jordan has received generous economic and military aid to ensure its relative stability in a turbulent region.