Close US ally Jordan's King Abdullah asked his palace aide Nasser Lozi to form a new cabinet to push forward economic reforms before parliamentary elections later next year, officials said on Wednesday. The new government comes after an abrupt move by King Abdullah last month to end parliament's life in mid-term that was prompted by the government's failure to implement investor friendly laws and maintain fiscal restraint to spur growth.
Officials said the king accepted the resignation of Prime Minister Nader al-Dahabi and asked royal court chief Lozi to form a new government. Constitutionally most powers rest with the king who appoints governments, approves legislation and can dissolve parliament.
Outgoing prime minister Nader Dahabi, a former air force chief who transformed the special economic zone in the Red Sea port of Aqaba into a haven for multi-billion dollar investments, had been appointed by the king in November 2007. Jordan, with a population of six million, faces a contracting economy after several years of robust growth. The boom was supported by strong foreign direct investments, including remittances from a large skilled workforce in the Gulf Arab region.
The new cabinet line-up is likely to continue Jordan's free market reforms that critics say have deepened the divide between rich and poor and traditional support for US policies in the region, officials said. They said Abdullah will count on Lozi to win support for his economic and social reforms among the conservative establishment, the backbone of the king's power base, which fears accelerated reforms could erode its grip on power.