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.”


UN agency: Iran violating all restrictions of nuclear deal

Updated 13 min 17 sec ago

UN agency: Iran violating all restrictions of nuclear deal

  • Iran signed the nuclear deal in 2015 with the United States, Germany, France, Britain, China and Russia
  • Known as the JCPOA, it allows Iran only to keep a stockpile of 202.8 kilograms

VIENNA: Iran has continued to increase its stockpiles of enriched uranium and remains in violation of its deal with world powers, the United Nations' atomic watchdog said Friday.
The International Atomic Energy Agency reported the finding in a confidential document distributed to member countries and seen by The Associated Press.
The agency said that as of May 20, Iran’s total stockpile of low-enriched uranium amounted to 1,571.6 kilograms (1.73 tons), up from 1,020.9 kilograms (1.1 tons) on Feb. 19.
Iran signed the nuclear deal in 2015 with the United States, Germany, France, Britain, China and Russia. Known as the Joint Comprehensive Plan of Action, or JCPOA, it allows Iran only to keep a stockpile of 202.8 kilograms (447 pounds).
The US pulled out of the deal unilaterally in 2018.
The IAEA reported that Iran has also been continuing to enrich uranium to a purity of 4.5%, higher than the 3.67% allowed under the JCPOA. It is also above the pact's limitations on heavy water.
The nuclear deal promised Iran economic incentives in return for the curbs on its nuclear program. Since President Donald Trump pulled the US out of the deal, Iran has been slowly violating the restrictions.
The ultimate goal of the JCPOA is to prevent Iran from developing a nuclear bomb — something that Tehran says it does not want to do. It has been open about the violations and continues to allow IAEA inspectors access to its facilities to monitor their operations.
It is now in violation of all restrictions outlined by the JCPOA, which Tehran says it hopes will pressure the other nations involved to increase economic incentives to make up for hard-hitting sanctions imposed by Washington after the US withdrawal.
Though Iran has been hard hit by the new coronavirus pandemic, the IAEA said it has maintained its verification and monitoring activities in the country, primarily by chartering aircraft to fly inspectors to and from Iran.
It cited “exceptional cooperation” from authorities in Austria, where it is based, and Iran in facilitating the operation.