Government subsidies and the Ministry of Planning

The volume of government subsidies, which the state has given to citizens or the private sector, has exceeded trillions of Saudi riyals in the last 20 years.
The purpose of subsidies is to reduce the burden indirectly on citizens, on the one hand, and to create a catalyst for growth, on the other.
Government subsidies for the private sector institutions, in its various forms, was one of the most important factors, the state provided to facilitate development plans and assist in the progress of the state and its citizens.
Most people are aware that the large volume of government subsidies was intended to reflect positively on consumers and merchants alike, and not to tip the scale in favor of either side.
However, what we see today is that there are ministries and entities, which have different support mechanisms that are not integrated with the primary goal. Therefore, one must reconsider and study these factors presently, otherwise we will neither benefit from the subsidies nor will we achieve the desired goals.
The current situation compels us to study the mechanisms of the government subsidies and to assess our options. Perhaps we should stop the subsidization of goods, and compensate citizens instead. Another option is to maintain subsidies and increase the support for the rationalization process to attain the utmost benefit from the support the government aspires to provide.
At the international level, government subsidies are provided to a certain industry to support that industry and give it a greater competitive edge in global markets. This comes in the forms of tax exemptions, discounts on raw material costs and providing financial incentives for consumers to purchase the industry’s products (as in the renewable energy sector’s stimulus plans).
Another reason behind government subsidies on the international front is to reduce the price of a commodity. Governments shoulder the burden of import prices, or the production prices of goods. For example, the government subsidies for basic commodities, power and water. This represents the difference between the real cost of water production and distribution, as well as the power consumed by the individual, and the actual amount paid for what one uses.
From my point of view, time is pressing for us to re-examine this aspect. We need to rebuild the mechanisms of subsidies to better align them with the Kingdom’s strategic plan.
It is expected from the Ministry of Planning, as the reference for the nation’s future plans, to take into account all these considerations and obligate all concerned entities to implement these changes to achieve the desired goals.
Our goals in construction, development and other fields shouldn’t only aim for the near future, but the long term as well, so we can reap the fruits of these plans.
In this context lies the essential role of the Ministry of Planning, which draws the strategic visions and plans, in the frame of clear controls.