Finally, and after four years of a laggard non-economic vision, the Jordanian government’s budget seems to get on the right track.

Not only is the budget deficit falling, there also seems to be an impressive return of economic sense and interconnectivity among the economic managers. This sense, not the past simple accounting sense, is what dominates the government budget today.

So we can pat ourselves on the shoulder, but more, much more, can and should be done.

The budget deficit after accounting for aid came to JD1,100 million in 2010, much less than the JD1,449 million of 2009, and the economy did better (in 2010 the real growth rate was 3.5 per cent after a dismal growth rate of 2.3 per cent in 2009), even after slashing the deficit by one-third. This is quite an achievement. Therefore, the 2010 budget was a definite improvement over its predecessor.

Frankly, the budgets of 2008 and 2009 targeted reducing capital expenditures, without accounting for the welfare of Jordanians. In addition, increases in hiring and creation of independent government bodies were stupendous.

I, and many Jordanians, felt that we were brought upon this earth to serve the budget; after slashing capital expenditures (spending on improving the facilities and physical capital of the nation, such as schools, highways, universities, health, etc,), the government then increased spending on its own salaries, hiring (and hiring more), and so forth.

The increase in spending, which was coupled with greater borrowing and fees, had no discernible positive impact on the economy, and threatened dire economic consequences.

The budget for 2010 had little manoeuvrability, but it got economically creative: several cuts in hiring were made, a freeze on independent government bodies was announced and studies were launched to downsize either through mergers or cancellation of some independent departments.

Prioritisation of capital expenditures brought them back into the picture, but still at a curtailed pace - which was understandable, given the tight spot the new Cabinet was in.

In the 2011 budget one reads with glee that the allocations for the capital expenditure item will be increased by 20 per cent. This is great news, not only for the economy in 2011 but also for the competitiveness of the Jordanian economy in the years to come. Furthermore, salary increases will be curtailed (not capped) and the budget deficit will further decrease to 5.3 per cent of the GDP (almost half of what it was in 2009). The deficit is planned to decrease by 0.5 percentage points of the GDP annually, until 2013, and the mergers of independent government departments is to continue.

Taken altogether, one senses more economic relevance in the budget than before.

Consequently, the government and the IMF expect a growth of 4.2 per cent in real terms in 2011. But this is not enough because we can do much better.

With rising oil prices and improved expectations regarding the region and the local economy, the growth should surpass 5 per cent this year. It will not be done by the budget or the Ministry of Finance alone; the latter can at best steer the economy away from the disasters of frivolous spending and help invest better in the future of the country.

The rest of the economic managers should rally to partake in fixes at the microeconomic level. These include strategies and activities that increase the return on labour and capital through enhanced productivity and added value, all to commence in the short run and continue forever. Yes, forever!

Inward flows of FDIs should rise commensurately and quickly since the Gulf is looking at a very good year and we need the injections to spur a quick rejuvenation. It is not acceptable that FDIs this year should match those of last year. What is needed is a return to FDI levels that are equal or more than those of 2008.

In other words, Jordanians should expect government to focus in 2011 on a real growth rate of more than 5 per cent.