New Budget Opens Door for Theft
2023-04-21 - 2:49 p
Bahrain Mirror (Exclusive): The government has opened the door for theft bids in the following two years, a draft budget with an unrealistic deficit, and the start of borrowing operations whose details no one has knowledge of as their methods of spending remain unknown.
The government approved the draft budget for the next two years, 2023-2024, based on an estimation of the oil price at only $60 per barrel.
According to the draft submitted by the government to parliament, the budget will record a deficit in the two fiscal years, 493 million dinars for the year 2023 and 76 million dinars for 2024.
Upon what did the Ministry of Finance rely to set $60 for the price of a barrel? What are the effects of this low figure?
Oil prices continue to rise amid the effects of war on Ukraine and the OPEC Plus production cut agreement, meanwhile, the price of a barrel approved by the government goes against market trends.
The World Bank expects the oil price barrel to remain at $90 per barrel in 2023 at least, so on what did the government rely in its estimation?
If the government wants to reserve its estimates, it can set the price per barrel at estimates slightly lower than the World Bank's predictions, setting it at $80 per barrel, as Saudi Arabia has done, for instance.
If the government approves the price of a barrel of oil at $80, which is a fair price, the revenues of the state would increase by $3 billion in the next two years (1 billion and 128 million dinars).
Accordingly, the budget will record financial savings that can be directed in the draft budget to public benefit projects such as housing, health, road construction works, etc., but this is not what happened.
Instead, the government announced the appointment of a group of banks to arrange contacts with investors ahead of a planned issuance of dollar-denominated sukuk as well as conventional bonds (new loans).
Thus, the government continued to reduce the project budget, as well as opening the door to borrowing to pay off a deficit that does not really exist, which is a trick it always resorts to in order to transfer funds to private accounts or secret budgets.
The 2022 budget recorded financial savings of one billion and 300 million dinars, according to financial estimates due to the rise in oil prices, but the government claimed at the end of the fiscal year that it recorded a deficit of 178 million dinars
Assuming the government recorded a deficit of 178 million dinars, why did it borrow more than 500 million dinars to cover the deficit last year?
We are facing a scenario that is repeated annually: unrealistic deficit estimates that deprive citizens of opportunities to benefit from oil savings, and opening the door to large-scale borrowing operations to cover a deficit that does not exist.
Every year, the government accumulates loans of more than half a billion dinars burdening the state, while these funds go to the pockets of the ruling family or, at best, to cover unnecessary security and military expenses.
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