By Suleiman Al-Khalidi
AMMAN (Reuters) - Jordan's King Abdullah reappointed Abdullah Ensour as prime minister on Saturday after canvassing members of a new parliament elected in January, officials said.
The monarch's consultations with the new parliament follow constitutional changes that devolved some his powers to the assembly - a response to calls for reform prompted by recent uprisings across the Arab world.
King Abdullah previously hand-picked his prime ministers without consulting parliament. Ensour, an economist educated in the United States and France, who is not tainted with corruption allegations, was nominated by the majority of parliamentarians.
Reform-minded Ensour will hold consultations with parliamentary blocs in the 150-member assembly about the make-up of his new cabinet. Such open dialogue is in contrast to previous government formations in which parliament had no role.
In the meantime, his existing cabinet will continue as a caretaker government.
The monarch commended Ensour in a letter of designation for his performance in five months in office, saying he was well-equipped to steer the country through regional and domestic turbulence.
"You have been selfless in putting the higher national interest above any consideration in facing these critical challenges that Jordan faces," the monarch wrote.
ECONOMY IN CRISIS
Jordan's crisis-hit economy has been strained by a flood of refugees from the two-year-old civil war its northern neighbor Syria. The kingdom hosts more than 350,000 Syrian refugees, around five percent of its own population, putting pressure on water and electricity resources [ID:nL5N0B1EV3].
The war has strangled cross-border trade and threatens to spark more turmoil across the already volatile Middle East.
In November, Ensour took the unpopular decision to raise fuel prices, sparking several days of civil unrest, mainly across rural and tribal areas.
He argued that a shift from broad subsidies towards targeted cash transfers to the poor would provide more effective support and was the only option to deal with a financial crisis that drove the country's deficit to over 12 percent of gross domestic product (GDP).
Independent politicians have praised Ensour's willingness to take bold measures in the face of popular resistance, which have secured Jordan a $2 billion loan from the International Monetary Fund.
That was conditional on a budget plan that includes reducing subsidies on fuel and raising electricity tariffs. The kingdom is struggling to cut its budget deficit by about a third to 5.4 percent of GDP from 7.9 percent in 2012, finance ministry sources have said.
Ensour, who has held senior government posts in successive administrations, was appointed in October after the king dissolved parliament halfway through its four-year term to prepare for the country's first parliamentary elections since the Arab Spring uprisings of 2011.
The constitutional changes transferred some of the monarch's powers to parliament, which critics said had become sidelined, and restored to the government some executive powers which had shifted to the palace and security forces.
Ensour could also face challenges from the Muslim Brotherhood, whose Islamist party boycotted the parliamentary election over what it saw as an unfair electoral law favoring rural and tribal regions over the cities with their mostly Palestinian-origin population.
More than two thirds of Jordan's seven million people live in cities but are allocated less than a third of assembly seats.
The political exclusion of Jordanians of Palestinian origin, the majority of the country's population, could store up trouble in the long term for the tribally structured political system.
The IMF praised Ensour's economic reforms this month, saying it saw some signs of economic recovery in 2013, with foreign reserves boosted by at least $1.5 billion of Gulf money, greater confidence in the local currency and rising state revenues.
(Reporting by Suleiman Al-Khalidi; Editing by Rosalind Russell)