JEDDAH, 4 September 2004 — Saudi Arabia will set aside SR41 billion from this year’s budget surplus for development projects which have direct bearing on the welfare and prosperity of citizens, Crown Prince Abdullah announced yesterday.
He also confirmed press reports that a lion’s share of the expected surplus from rising oil prices would go for the repayment of public debts estimated at SR660 billion.
“We have instructed the finance minister to allocate SR41 billion from the surplus for development projects,” the crown prince told the Saudi Press Agency. “The surplus came as a result of unexpected rise in oil prices... and the whole surplus will be spent for the welfare of citizens. The focus will be on projects that will have direct and considerable impact on the welfare and prosperity of citizens,” he said.
Prince Abdullah explained that SR30 billion from the surplus would be allocated for social and economic projects in the next five years, adding the government would give priority to projects in five sectors — water and sewage, roads and expressways, primary healthcare, school buildings, and technical and vocational education.
Analysts projected that Saudi Arabia’s budget surplus this year would be as high as SR131 billion ($35 billion) as a result of surging world oil prices. In the current fiscal budget, the government has projected a SR30 billion ($8 billion) deficit with revenues estimated at SR200 billion ($53.33 billion) and expenditures at SR230 billion ($61.3 billion).
The crown prince emphasized the government’s resolve to provide “suitable housing” for all Saudis in a gradual and organized manner. “For that we have decided to allocate SR9 billion to increase the capital of the Real Estate Development Fund,” he said.
“This will help more Saudis to have their own houses... and I pray for the day when all Saudis will have their own suitable houses,” he added.
Prince Abdullah referred to the surprise visit he made to the poorest neighborhoods in Riyadh two years ago. “During that visit, I have seen improper housing facilities where many of our beloved citizens live. The pictures that I saw are still in my memory. I know that similar scenes could be seen in other parts of the country,” he added.
Asked if there was any plan to increase job opportunities for Saudis, Prince Abdullah said the government’s new plans and policies would help more Saudi youths get employed.
“We have decided to increase the capital of the Saudi Credit Bank from SR1 billion to SR3 billion, which will be used to provide loans to people with limited income. The bank will also provide loans to Saudi youths to establish small-scale projects, which will not only help their owners but also strengthen the national economy,” he added.
The crown prince stressed the importance of paying public debts, saying non-payment of these debts would affect the reputation of the country and its economic strength. “It also puts more burden on the coming generations. So we have decided to allocate the larger part of the surplus to pay part of these debts.”
Finance Minister Ibrahim Al-Assaf said in a recent press statement that the Kingdom’s public debts amounted to SR660 billion ($176 billion) according to last year’s figures.
The payment of debts, the crown prince said, would have a positive impact on the economy. “It will also give us greater flexibility in the forthcoming budget and help us transfer part of the amount allocated for paying public debt to development spending including construction and maintenance of basic infrastructure facilities,” he told the agency.
Asked whether debt repayment would have any effect on ordinary Saudis, the crown prince said: “The government, while taking into consideration the interest of the coming generations, does not ignore the welfare and prosperity of the present generation. So it has been decided to allocate SR30 billion from the surplus for projects in social and economic sectors that will have a direct impact on the day-to-day life of citizens in various parts of the Kingdom.” He said the amount is in addition to the annual budget allocations for these projects.
Prince Abdullah said the government selected the sectors for new projects after consulting Saudi experts. He said the projects would help supply water to a number of new cities and villages, solve sewage problem in some areas and prevent the negative effect of flash floods.
“There is an emergency program to establish new expressways as well as two-way and one-way roads inside and outside cities and villages,” he said, adding that the government gives priority to communication projects. “The new projects will facilitate transportation,” he added.
He said part of the surplus would go for the development of primary health care centers in all regions. “The opening of more health centers will help provide the necessary care for the mother, child and other family members and solve their health problems.”
Prince Abdullah emphasized the need to construct new buildings for schools which are currently housed in rented ones. “The new allocations will help construct more school buildings creating a conducive atmosphere for students,” he added.
He said the financial support for technical education and vocational centers would help develop these centers in accordance with market needs and provide training to a large number of Saudi youths. “This will also help them make use of new job opportunities,” he said and stressed the government’s resolve to tackle the unemployment problem.
