Bahrain making good progress on fiscal balance plan — finance minister

Bahrain’s Sunni Muslim rulers are concerned that austerity measures could anger the majority Shiite-led opposition and stir more of the unrest that has rattled the kingdom since the Arab Spring uprisings of 2011. (File/AFP)
Updated 21 October 2019

Bahrain making good progress on fiscal balance plan — finance minister

  • Bahrain, which does not have the vast oil wealth of fellow Gulf states, was hit hard by the 2014 slump in crude prices
  • The kingdom released a plan last year to overhaul its economy and fix its debt-burdened finances

WASHINGTON: Bahrain is making good progress on its fiscal consolidation plan and is on track to eliminate its deficit by 2022 as planned, Finance Minister Sheikh Salman bin Khalifa Al Khalifa said on Saturday.

Bahrain, which does not have the vast oil wealth of fellow Gulf states, was hit hard by the 2014 slump in crude prices. The kingdom released a plan last year to overhaul its economy and fix its debt-burdened finances, aided by a $10 billion aid package from Saudi Arabia, Kuwait and the United Arab Emirates.

“We’ve had very good execution so far,” al Klalifa told Reuters, when asked if Bahrain would meet its target. “We’ve been very disciplined with regards to executing the fiscal balance plan and ensuring that we’re executing with regards to the targets.”

Al Khalifa said Bahrain had reduced its deficit by 37.8 percent in the first six months of 2019, while increasing non-oil revenue by 47 percent. It also cut administrative costs by 14 percent and had 18 percent of civil servants accept voluntary retirement packages, he said.

It was critical to ensure job creation, and spending on health, education and other social services spending remained strong as Bahrain continued its consolidation program, he said.

Bahrain’s Sunni Muslim rulers are concerned that austerity measures could anger the majority Shiite-led opposition and stir more of the unrest that has rattled the kingdom since the Arab Spring uprisings of 2011.

“As we continue to execute the fiscal balance plan, we will want to ensure that we continue to see positive economic growth and job creation,” he said.

Al Khalifa said a September bond issue, the country’s first since the fiscal balance plan was launched, sparked good demand and with much tighter pricing than its previous bond issue.

He gave no details on borrowing plans for the coming year, but said half of borrowing needs would be met by the aid package from Saudi Arabia, UAE and Kuwait, and half from the market.

As well as introducing a value-added tax in January, the government has cut subsidies, raised fees and is pushing economic diversification and inward investment.

Al Khalifa said job creation had been a heavy focus during the International Monetary Fund and World Bank fall meetings in Washington this week.
“Maintaining economic growth is important but job creation is important regardless of where you are in the business cycle,” he said.

In addition, he said the government had launched a mobile phone application, Tawasul, that allowed citizens to file complaints about the government.
Thousands of complaints on issues ranging from road work to the opening hours of government offices had been received since 2014, and 100 percent had been addressed, he said.

“It’s been quite effective in receiving feedback,” he said. “It’s helped us a lot in terms of prioritizing policy.”


Major roads reopened in Lebanon after 2-day closure

Updated 14 min 14 sec ago

Major roads reopened in Lebanon after 2-day closure

  • The roads linking Beirut with the country’s south and north were opened shortly before noon Thursday
  • Thousands of people attended the funeral of a 38-year-old father who was shot dead by a soldier at a protest Tuesday night

BEIRUT: Lebanese troops reopened major roads around Lebanon Thursday after a two-day closure triggered by a TV interview with President Michel Aoun in which he called on protesters to go home.
The roads linking Beirut with the country’s south and north were opened shortly before noon Thursday, as well as others around the country.
Protesters have been holding demonstrations since Oct. 17 demanding an end to widespread corruption and mismanagement by the political class that has ruled the country for three decades.
Aoun said Thursday that the demands of protesters are being followed adding that “they will be among the top priorities of the government that we are working on forming in the near future.”
Aoun expressed hopes in comments released by his office that a new Cabinet “will be formed in the coming days” after removing obstacles that have been delaying the formation.
Prime Minister Saad Hariri resigned his government on Oct. 29, meeting a key demand of the protesters. Since then there have been disagreements over the new Cabinet as Hariri insists it should be made up of technocrats who will concentrate on solving Lebanon’s worst economic and financial crisis in decades while other politicians, including Aoun, want it to be a mixture of technocrats and politicians.
“Dealing with the developments should be based on national interests that need cooperation from all sides to achieve pursued goals,” Aoun said.
Caretaker Foreign Minister Gebran Bassil tweeted that the priority is to form a “salvation government” and prevent anyone from taking the country into a confrontation. Bassil is Aoun’s son-in-law and close aide.
The opening of the roads came a day after protesters started building a wall inside a tunnel on the highway linking Beirut with north Lebanon leading to an outcry by the public who saw it as a reminder of the 1975-90 civil war.
In the town of Jal Al-Dib, just north of Beirut, troops pushed away protesters from the highway and removed barriers that had been blocking the road since Tuesday night.
In the town of Choueifat south of Beirut, thousands of people attended the funeral of a 38-year-old father who was shot dead by a soldier at a protest Tuesday night. Alaa Abou Fakher’s death marked the first such fatality since the economically driven demonstrations against the government engulfed the country last month.
That protest was ignited by comments made by Aoun in a televised interview, in which he said there could be further delays before a new government is formed.
Abou Fakher’s coffin was carried through the streets of Choueifat as women dressed in black threw rice on it from balconies in a traditional Lebanese gesture.
Bank employees announced they will continue with their strike on Friday for the fourth day amid concerns for their safety as some of them have been subjected to insults by bank clients who were not allowed to withdraw as much as they wanted from their accounts. The country’s lenders are imposing varying capital controls that differ from bank to bank, fueling the turmoil.