2023 Portfolios: Security Expenditure Dominates Two-Thirds of New Budget

Finance Minister shakes hands with MP (May 30, 2023) after approving a decree on the general budget law
Finance Minister shakes hands with MP (May 30, 2023) after approving a decree on the general budget law

2024-02-28 - 4:32 p

Bahrain Mirror (2023 Portfolios): On May 30, 2023, the Bahraini parliament approved the country's general budget law for the fiscal years 2023-2024, amidst continued military spending and a record deficit.

Total state revenues for the two years amounted to about 6.5 billion dinars. Revenue data revealed that two-thirds of state revenues came from the oil sector, with more than half of the remaining third derived from taxes and fees imposed on citizens.

The budget indicated that the National Bureau for Revenue, responsible for tax collection, generated over 1.2 billion dinars, with the state persisting in its tax imposition policy. 

The budget set the price of oil at only $60 per barrel, which is a very conservative price, while neighboring countries adopted a higher price of $80 per barrel.

Consequently, the budget estimates projected a deficit for the two fiscal years, amounting to more than half a billion dinars in 2023, and 160 million dinars in 2024.

Public debt interest represented the largest item in the budget, with interests reaching 766 million dinars for the first year and 788 million dinars for the second year, while the National Assembly approved a royal decree increasing the public debt to 16 billion dinars.

According to budget data, recurrent expenditures on the defense and security sectors ranked second after debt interest, accounting for a third of expenditures over the two fiscal years. It is noteworthy that they totaled over two billion dinars. 

However, the general budget does not reveal the amounts allocated for armaments, as the state classifies these figures under secret items that also include the expenses of the ruling family, not included in the budget.

Meanwhile, spending on health, education and youth sectors did not exceed 82 million dinars over the two fiscal years, highlighting the government's prioritization of security sectors over service sectors. 

As for projects, the government allocated about 450 million dinars for the two fiscal years, with 225 million for each year designated for housing, education and health projects. However, the government typically does not fully utilize project allocations, often reallocating them to other sectors at the discretion of the Minister of Finance.

In 2021, for instance, the government implemented only 60% of the approved projects, meaning that 40% of project allocations were redirected to other sectors, believed to be the defense and security sectors.

Although oil prices have risen to comfortable levels compared to their 2015 collapse, citizens have not benefited from these prices.

Contrary to the expectations of pro-government parties, the government did not increase wages or enhance bonuses and financial allocations for citizens.

Arabic Version