By Suleiman Al-Khalidi
AMMAN (Reuters) - Jordan's King Abdullah reshuffled his cabinet on Sunday but retained Hani Mulki as prime minister with more scope to face Islamist militants and to press ahead with unpopular IMF-mandated reforms to cut rising public debt.
The reshuffle, the second since the business-friendly Mulki was appointed last May, came at a time of sluggish economic growth, poor business sentiment and concerns over Jordan's political stability following a series of security lapses.
Jordan has stepped up its role in the U.S.-led military campaign against Islamic State in the region and risks being drawn into a prolonged conflict with the militants.
The five new ministers entering the cabinet include former police chief Ghaleb Zubi as interior minister and Ayman Safadi, a long-time adviser to the royal family, as foreign minister, according to a palace statement.
Safadi has strong ties to the Gulf states and has been critical of President Bashar al-Assad in neighboring Syria. Safadi, whose appointment was a surprise, replaces Nasser Joudeh, who had served as Jordan's chief diplomat since 2009.
Outgoing interior minister Salamah Hamad narrowly avoided a vote of no-confidence in parliament over his handling of an Islamic State attack in the southern city of Karak last month in which at least nine people, including a Canadian tourist and members of the security forces, were killed.
In another major security lapse, a Jordanian guard shot dead three members of the U.S. special forces at an airbase last November, tarnishing the image of the country's security forces and shaking the confidence of Western backers in its ability to handle security threats.
Diplomats say the security lapses raise concerns over the possible radicalization of some members of Jordan's military and security apparatus. Jordan is among the closest allies of the United States in the Middle East region.
In his first comments after the cabinet reshuffle, Mulki defended the arrest last Thursday of a group of prominent retired army and security officers who criticized the monarch - a taboo in the kingdom - and blamed security breaches on what they said was rampant official corruption.
"Freedom of speech does not mean agitation or chaos ... We respect freedom of expression as long as it does not violate the higher national interest," Mulki told a parliamentary session.
International rights groups say there has been an erosion in public liberties with stepped up arrests of peaceful dissenters.
Finance Minister Omar Malhas kept his job in the reshuffle. He is overseeing a tough three-year program agreed with the International Monetary Fund that aims to cut public debt to 77 percent of national output GDP by 2021 from 94 percent now.
Politicians and economists say the tough fiscal consolidation plan, which includes raising taxes on basic food and fuel items in the coming months and cutting subsidies, will worsen the plight of poorer Jordanians. Removing subsidies has triggered civil unrest in the past.
Jordan's economy is expected to have grown by 2.4 percent last year, below an IMF target of 2.8 percent.
(Reporting by Suleiman Al-Khalidi; Editing by Tom Heneghan)