Economic Research Forum (ERF)

Social protection in Jordan: towards collaborative implementation

Jordan has an ambitious national strategy for social protection, adopted in 2019. But as this column explains, implementing it has not been easy in the context of economic challenges, the global pandemic and geopolitical instability. Achieving transformative social protection requires a new social contract, citizen engagement and effective support from the international donor community.

In a nutshell

The unprecedented labour crisis confronting Jordan and the MENA region as whole underscores the urgent need for a new social contract, which includes the basic laws and constructions that define the relationship between the state and labour.

Employers and state actors must find a collaborative way to allow employees to be involved more in decision-making processes; in return, the employees themselves must recognise negotiation outcomes and develop realistic expectations.

Development partners should focus on improved collaboration among themselves to provide answers to the critical question on how aid to Jordan can assist in implementing the existing strategies and numerous reform efforts.

Social protection is a vital ingredient for a country’s permanence, which, when operational, protects people against economic and social distress and shocks that occur throughout their lifecycle.

In Jordan, the importance of social protection was confirmed through the government’s adoption of the Jordan National Social Protection Strategy (JNSPS) in 2019. The strategy is structured around three pillars: first, decent work and social security; second, social assistance; and third, social services (JNSPS, 2019).

Research has shown that social protection systems can help individuals and families to look beyond survival, providing incentives for them to make investments in human capital and assets (Devereux and Sabates-Wheeler, 2004; Devereux, 2016; Röth et al, 2017). In the long term, comprehensive social protection can support pro-poor growth, increase labour productivity, promote equality and, ultimately, guarantee universal basic rights (UN, 2012; ILO, 2012).

The JNSPS articulated this through the government’s ambition to break the inter-generational cycle of poverty and to provide a ‘social protection floor’ in the context of the country’s vision and policy for a state of solidarity, production and justice (JNSPS, 2019).

But moving into an implementation phase has not been easy. To begin with, the implementation phase of any strategy or policy is often the most challenging stage in the policy cycle. There can be various contributors to this, often including overly optimistic expectations, governance structures, and inefficient and often impulsive modes of collaboration (Hudson et al, 2019).

But in the Jordanian context, there have been additional factors over the past years including substantial increase of the population (although projected to decrease – ILO, 2016), a prolonged decline in economic activity, an increase in unemployment levels and rising public debt. And since the publication of the strategy, like the rest of the world, Jordan has been affected by a series of severe and mutually reinforcing shocks — the Covid-19 pandemic, the war in Ukraine and instability among its neighbouring countries – plus another protracted refugee reality that the country must address.

These shocks have added another layer to the complexity of the situation, and highlighted that the existing structure of the social protection system was overly stretched in response to the layers of crisis, and considering that most social assistance programmes in the country over the past decades have been reactive and (ex-post) shock responsive (Kawar et al, 2022).

Towards transformative social protection

It has been argued that Jordan needs to shift towards transformative social protection programming (Kawar et al, 2022), entailing an explicit extension of social protection to arenas such as equity, empowerment and economic, social and cultural rights, rather than confining its scope to targeted income and consumption transfers (Devereux and Sabates-Wheeler, 2004).

But how could such a shift take place? To begin with, several technical outlooks and viewpoints have been published over the years about grasping and reconstructing the economic and fiscal situation in Jordan (World Bank, 2022; Harrigan and El-Said, 2010; Anani, 1987).

Most views ultimately boil down to prudent macroeconomic management to contain and reduce the deficit and debt, setting financially realistic long-term strategic planning, expenditure switching so that public revenues are spent transparently on areas with high social returns focusing on the reduction in poverty and vulnerability (Kawar et al, 2022), in addition to recent call for integrating climate concerns in public investments (World Bank, 2022), which is in line with a global momentum to address global climate targets.

As for the architecture of the social protection system in particular, the JNSPS, in addition to numerous research output, provides the needed insights on addressing the challenges, and presents pathways towards sustainable social protection systems (ILO, 2016; Kawar et al, 2022; Alhawarin and Selwaness, 2019; JNSPS, 2019). It is very clear that Jordan does not need to start from scratch, but rather continue its path in the social protection agenda.

But while the enabling ingredients are all there, some catalysts are needed in the process. Presented below are three areas that would merit more in-depth examination, and are urgent to build on when tackling the usual (and new) challenges that Jordan will face. Relating in particular to the social protection agenda, these points (although not exhaustive) could prove effective to help in moving beyond strategies into collaborative implementation of the social protection agenda.

Social contract

To start with: the social contract. The old social contract of Jordan (which is similar in other MENA countries) stipulated the distribution of income to citizens through the provision of guaranteed public jobs, subsidies, transfers, free healthcare and education, housing and privileges, which also came at the expense of a lack of political participation and transparency in politics, administration and the judiciary.

In the past couple of decades, several aspects of this social contract have come into question. This was largely due to significant fiscal deficits and public sector retrenchment. The idea that the government as an employer of first and last resort now longer held true, and new generations of educated young people, embarked on the beginning of their careers only to find themselves part of a growing unemployed generation.

In addition, the skills that they had accumulated were only modestly suited to the private sector, which was also not growing rapidly enough to absorb them – while the areas that were witnessing fast growth were exhibiting severe skill mismatches between graduates and what the labour market needed.

The unprecedented labour crisis confronting Jordan and the region as whole underscores the urgent need for a new social contract, which includes the basic laws and constructions that define the relationship between the state and labour. Such a contract must comprise policies that promote the role of the private sector, support trade, and increase foreign investment, but also integrate workers into the formal sector, protect their rights and ensure that workers participate in the benefits of economic growth.

Citizen engagement

This leads to the next issue, which relates to citizen engagement through trade unions. Citizen engagement is a means to empower citizens and enable them to participate in public decisions constructively and effectively.

According to the ITUC Global Rights Index 2018, the MENA region was once again the worst in the world for the treatment of workers and violations of rights. While Jordan fared much better than its counterparts in the region, its standing still indicated that there is regular interference in collective labour rights and that there are deficiencies in laws and/or certain practices that make frequent violations possible (ITUC, 2018).

The main task of trade unions is to represent employees’ interests and communicate negotiation outcomes to workers in order to help bring about a properly functioning labour market. Both of these roles are essential when it comes to getting a new social contract off the ground, but the issue is not straightforward.

The engagement of trade unions must be seen from the broader perspective of the region, where unions find themselves in an extremely difficult position. This can be explained by the corporatist legacy from the times of Arab socialism, when unions largely functioned as compliant mass organisations in the service of government agendas.

On the other hand, the concept of trade unions is a highly political one in the region. In a context very different from Western multi-party democracy, unions offer a legal framework for political organisation, even in the face of a state of emergency, a ban on meetings and controlled press freedoms.

So, the question becomes: how can unions refocus on their main priority, which is to represent workers’ interests and communicate negotiation outcomes in order to help bring about a properly functioning labour market.

Both of these roles are essential when it comes to getting a new social contract off the ground. Employers and state actors must therefore find a collaborative way to allow employees to be more involved in decision-making processes. In return, the employees themselves must recognise negotiation outcomes and develop realistic expectations, especially with regard to the jobs available in the public sector and how the market seems to be evolving.

International support

The third issue pertains to international aid, and particularly how to create a constructive international cooperation environment to achieve national priority outcomes. When it comes to donor coordination, Jordan is perhaps one of the countries that fares better that many – see, for example, the Jordan Response Plan, which was first established to coordinate aid for Syrian refugees.

But despite several advances on many fronts, donor coordination in Jordan remains ineffectual  (Dhingra, 2022; Culbertson et al, 2016), specifically where it is needed the most: in the implementation phase of strategies (whose ultimate goal is to build robust economic sectors, empower social services and reduce reliance on aid). Common pretexts such as weak national coordination and lack of capacity should not be considered as sufficient justifications for uncoordinated donor-driven approaches.

In 2021, the total volume of foreign aid, including grants and soft loans contracted to Jordan amounted to $4.416 billion, of which 42.4% was in the form of regular grants, 40.8% in loans, and 16.9% directed to the Syrian crisis response plan (Jordan Times, 2022). Strengthening Social Protection systems and programmes has been progressively an important component of many aid packages. Most recently a £7 million pledge by the UK government to provide direct financial support to the government of Jordan for 2022 and 2023, to strengthen social protection in Jordan (ILO, 2023).

Donor collaboration is fundamental to support the government in improving the scale and efficiency of its overall priority outcomes and intended impact on social protection. There are many prescriptions on how to do that on a larger scale (Unsworth, 2016), and many argue that in Jordan where much ground work has been done, donors can do better in the collective role that they play within the country.

Reorganising, synergising and collaborating can be the fastest and most resource efficient way to improve outcomes, and one area to start with is in addressing the critical impasse of how Jordan can move beyond existing strategies and numerous reform initiatives into a phase of collaborative implementation.

Further reading

Alhawarin, I, and I Selwaness (2019) ‘The Challenges of Social Security Coverage and Early Retirement in Jordan’, in C Kraftt and R Assad (eds) The Jordanian Labour Market: Between Fragility and Resilience, Oxford University Press.

Anani, J (1987) Adjustment and Development: The Case of Jordan, International Monetary Fund: Adjustment Policies and Development Strategies in the Arab World.

Culbertson, S, O Oliker, B Baruch and I Blum (2016) ‘An Overview of Coordination in Jordan and Lebanon, in Culbertson et al, Rethinking Coordination of Services to Refugees in Urban Areas: Managing the Crisis in Jordan and Lebanon.

Devereux, S (2016) ‘Social Protection and Safety Nets in the Middle East and North Africa’, IDS Research Report 80 – in collaboration with the World Food Program .

Devereux, S, and R Sabates-Wheeler (2004) ‘Transformative social protection’ (Vol. 232), Institute of Development Studies.

Dhingra, R (2022) ‘Coordination in practice or performance? The political economy of refugee aid coordination in Jordan’, Journal of Refugee Studies 35(4): 1472-91.

Harrigan, JR, and H El-Said (2010) ‘The economic impact of IMF and World Bank programs in the Middle East and North Africa: A case study of Jordan, Egypt, Morocco and Tunisia, 1983-2004’,Review of Middle East Economics and Finance 6(2): 1-25.

Hudson, B, D Hunter and S Peckham (2019) ‘Policy failure and the policy-implementation gap: can policy support programs help?’, Policy Design and Practice 2(1): 1-14.

ILO (2012) Social protection floor for a fair and inclusive globalization, International Labour Organization.

ILO (2016) Establishing a Social Protection Floor in Jordan, Regional Office for the Arab States – Public Finance, Actuarial and Statistical Branch.

ITUC (2018) 2018 ITUC Global Rights Index, International Trade Union Confederation.

JNSPS (2019) Jordan National Social Protection Strategy 2019-2025, Government of Jordan.

Jordan Times (2022) ‘US, World Bank top list of foreign aid donors to Jordan, contributing $8.5billion’, 23 May.

Kawar, M, Z Nimeh and T Kool (2022) ‘From protection to transformation: Understanding the landscape of formal social protection in Jordan’, ERF Working Paper No. 1590.

Nimeh, Z (2017) ‘Arriving at a Framework of Social Protection’, UNU-MERIT Working Papers .

Röth, H, Z Nimeh and J Hagen-Zanker (2017) A mapping of social protection and humanitarian assistance programmes in Jordan, ODI.

UN (2012) Social protection: A development priority in the post-2015 UN development agenda, United Nations System Task Team on the Post-2015 UN Development Agenda.

Unsworth, S (2016) ‘It’s the politics! Can donors rise to the challenge?’, A Governance Practitioner’s Notebook, 47.

World Bank (2022a) Jordan: Performance and Learning Review for the Country Partnership Framework for the Period FY17-FY22 (English).

World Bank (2022b) Jordan Economic Monitor, Fall 2022: Public Investment: Maximizing the Development Impact

Most read

Sustaining entrepreneurship: lessons from Iran

Does entrepreneurial activity naturally return to long-term average levels after big economic disturbances? This column presents new evidence from Iran on trends in entrepreneurship among various categories of firm size, sector and location – and suggests policies that could be effective in promoting entrepreneurial activities.

Happiness in the Arab world: should we be concerned?

Several Arab countries have low rankings in the latest comparative assessment of average happiness across the world. But as this column explains, the average is not a reliable summary statistic when applied to ordinal data. The evidence from more robust analysis of socio-economic inequality in happiness suggests that policy-makers should be less concerned about happiness indicators than the core development objective of more equitable social conditions for citizens.

Financial constraints on small firms’ growth: pandemic lessons from Iran

How does access to finance affect the growth of small businesses? This column presents new evidence from Iran before and during the Covid-19 pandemic – and lessons learned by micro, small and medium-sized enterprises.

The economics of Israeli war aims and strategies

Israel’s response to last October’s Hamas attack has led to widespread death and destruction. This column outlines the impact thus far, including the effects on food scarcity, migration and the Palestinian economy in both Gaza and the West Bank.

It’s too early to tell what happened to the Arab Spring

Did the Arab Spring fail? This column presents a view the consensus view from ERF’s recent annual conference in Morocco: careful analysis of the fundamental drivers of democratic transitions suggests that it’s too early to tell.

Arab regional cooperation in a fragmenting world

As globalisation stalls, regionalisation has emerged as an alternative. This column argues that Arab countries need to face the new realities and move decisively towards greater mutual cooperation. A regional integration agenda that also supports domestic reforms could be an important source of growth, jobs and stability.

Self-employment in MENA: the role of religiosity and personal values

How important are individual’s values and beliefs in influencing the likelihood that they will embrace the responsibilities, risks and entrepreneurial challenge of self-employment? This column presents evidence from 12 countries in the Middle East and North African region on the roles of people’s religiosity and sense of personal agency in their labour market choices.

Gender differences in business record-keeping and planning in Iraq

Only one in every ten informal businesses in Iraq is led by a woman. Yet as research summarised in this column reveals, those businesses are more likely to set budgets and sales targets, and to keep business records. This may be evidence of the role of social exclusion in motivating greater reliance on the formal bureaucratic system.

Reformed foreign ownership rules in UAE: the impact on business entry

In an effort to stimulate economic growth and diversify the economy, the government of the United Arab Emirates has recently implemented regulatory reform that allows 100% foreign ownership of companies operating in the country. This column examines the implications of the reform for entry of new firms in Dubai, using unique data on new business licences in the emirate.

Conflict and debt in the Middle East and North Africa

With the global economy is in its third year of deceleration amid declining inflation and oil prices, the Middle East and North Africa grew by just 1.9% in 2023, with a forecast for growth in 2024 at 2.7%. In addition to heightened uncertainty brought on by the conflict centred in Gaza, many countries in the region are also grappling with pre-existing vulnerabilities, including rising debt levels. This column summarises a new report that unpacks the nature of debt in MENA – and explains the critical importance of keeping rising debt stocks in check.