Bahrain government rejects parliament’s subsidy reform plan

The proposals would provide 150 dinars for Bahrainis earning less than 300 dinars a month, 100 dinars for those earning up to 700, and 75 dinars for those earning up to 1,000, officials said. (REUTERS/Hamad I Mohammed/File Photo)
Updated 02 August 2018
0

Bahrain government rejects parliament’s subsidy reform plan

  • The new subsidies proposal, published by parliament earlier this month, recommends including meat subsidies and a cost of living allowance in a single package
  • Bahrain, which lacks the ample oil reserves of fellow Gulf states, has held off on fresh austerity measures

DUBAI (Reuters): Bahrain’s government has rejected parliament’s proposals to reform allowances paid to Bahrainis squeezed by years of austerity on the grounds that they would break government spending caps, lawmakers said.
After oil prices fell in 2014, pressuring state finances, Bahrain cut subsidies and raised taxes and fees to control its deficit. But the austerity has angered some Bahrainis and prompted a backlash in parliament.
Bahrain, which lacks the ample oil reserves of fellow Gulf states, has held off on fresh austerity measures, such as the introduction of value-added tax, until parliament agrees on a new system to compensate low- and middle-income citizens for increases in the cost of living.
The proposal submitted by parliament would have required an increase in government spending at a time when Bahrain is struggling with a current account gap and a large deficit, which have dragged down prices of its bonds and weighed on the dinar.
“The government has indeed asked us to review our proposal,” Jamal Fakhrou, the head of parliament’s technical commission in charge of the reform, told Reuters.
He said the government had explained it did not plan to raise direct cash allocations for subsidies in the next two years above the 382 million dinars ($1.01 billion) budgeted for 2018.
Another member of the House of Representatives, who declined to be named, said government officials were concerned that the proposal did not take into account a growing population, which would mean the cost of the program would rise in future years.
The new subsidies proposal, published by parliament earlier this month, recommends including meat subsidies and a cost of living allowance in a single package and increasing the size of that package for both working and retired Bahrainis.
It would provide 150 dinars for Bahrainis earning less than 300 dinars a month — up from 100 dinars in the old system — 100 dinars for those earning up to 700, and 75 dinars for those earning up to 1,000, officials said.
The proposal also included an additional allowance of 50 dinars for citizens earning between 1,001 and 1,200 dinars.
Some lawmakers said it could be difficult to reach agreement on a revised system that would satisfy both sides.
“One side will have to give concessions because the ultimate goal is to serve the citizens,” Fakhrou said.


UAE’s Network International shrugs off Brexit to list shares in London

Updated 21 March 2019
0

UAE’s Network International shrugs off Brexit to list shares in London

  • The planned share sale comes at an uncertain time in the UK
  • The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore

DUBAI: Network International, the UAE payments processor, has committed to a London IPO next month in what would be the UK’s first big share sale of the year.
The company intends to have a free float of at least 25 percent and admission to the London Stock Exchange is expected to take place in April, Network International said in a regulatory filing on Thursday.
The planned share sale comes at an uncertain time in the UK where there is still no clarity around whether Britain will leave the EU or not at the end of the month.
VPS Healthcare, the Abu Dhabi-based hospital operator, is reconsidering plans to list in London due to uncertainty surrounding Brexit, Bloomberg reported on Thursday citing a person familiar with the matter.
The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore.
Emirates NBD, Dubai’s biggest bank, owns 51 percent of Network International while Warburg Pincus and General Atlantic jointly own the rest.
The share sale will be a key test of investor demand for new listings in London after a subdued 2018 across most European markets.
“Volatility has continued in recent months, driven by the uncertainty around trade between the US and China, the wider geopolitical climate and the potential end of the current bull run,” said Peter Whelan, partner and UK IPO Lead at PwC in a recent report.
“We are seeing a healthy number of companies preparing for an IPO in 2019 despite the ongoing Brexit negotiations which have clearly impacted IPO activity on the London market.”
The payment processor reported earnings of $298 million last year according to its website, up from $262 million a year earlier. It does not disclose net income figures.
The company handles digital payments across the Middle East, which generate three quarters of its total earnings.
Last year it processed some $40 billion in payments for more than 65,000 merchants.
Its key markets in the region include the UAE and Jordan it says that Saudi Arabia offers “significant opportunities.” It also offers services in 40 African countries with Egypt, Nigeria and South Africa being its most important segments on the continent.