RIYADH/DAMMAM/JEDDAH, 17 December 2003 — Businessmen across Saudi Arabia have welcomed Sunday’s new national budget saying it reflects growth and development.
In Riyadh Representatives of the private sector said the emphasis in the new budget on education and healthcare facilities would give a big boost to development of human resources and the private sector, which was expected to register 3.7 percent growth this year.
They pointed out that since 150 primary healthcare centers besides 26 new hospitals and three universities are to be built and furnished, the construction and manufacturing sectors would be the major beneficiaries. This could provide avenues for Saudization of the work force in the private sector.
Shoura Council Member Osama Al-Kurdi said it was clear that the government was determined to reduce the budget deficit. “There is also a provision for new projects in the education and healthcare sectors. The government is also trying to cut down its public debt through its economic reforms and privatization programs.”
Shoura Council Member and Economist Dr.Ihsan Bu Hulaiga said the surge in actual income (SR295 billion) for 2003 was 77.3 percent higher than the projected revenue of SR209 billion. This would help to reduce the budget deficit.
Dr. Bu Hulaiga said this year’s surplus of SR45 billion (derived from projected revenues of SR295 billion versus expenditure of SR250 billion) could be used at least in part to build up the Stabilization Fund. Such a fund could act as a shock absorber whenever there is a budget deficit caused by the highly volatile oil revenues.
Dr. Abdulrahman Al-Zamil, member of the Shoura Council and chairman of the Al Zamil Group of Companies, said the budget was in line with the private sector’s expectations. “The budget addresses concerns for manpower development by providing for new schools, colleges and vocational training centers. A new feature of the budget is that it also gives attention to the small and medium enterprises (SMEs) by offering loan guarantees through the MOF and local banks,” he said.
The Saudi Industrial Development Fund is implementing the program and the private sector will be closely involved in all these activities.”
Dr. Al-Zamil said the actual revenues for 2003 could have been higher than SR295 billion but for certain unforeseen circumstances.
“It’s good news,” said Khaled Al-Turki, a businessman. “The budget is realistic and puts special emphasis on the development of human resources,” he said.
Al-Turki said the emphasis on education was welcome. “But this budget provides for three new universities and for training in general, and that is very good news.”
Abdul Aziz Kanoo, deputy chairman of Kanoo Group of companies told Arab News from London: “The planned outlay for the education sector is a healthy sign, and the emphasis on training shows the country’s desire to move toward self-sufficiency in human resources,” he said.
Saleh Al-Humaidan, managing director of Al-Youm Group of Publications, said that the budget reflected growth and development. The reduction in deficit and increase in expenditure showed that the country was set to make big strides in several sectors. He said the non-oil industry sector growth of 3.9 percent showed that the country’s diversification plan was on target.
According to Saeed Al-Ghamdi, an industrial analyst, the 3.7 GDP growth of the private sector boded well for the future. He added the figure would rise further once privatization gets properly under way.
In Jeddah economists and businessmen said the budget would lend new momentum to the education and health care sectors, which account for 28 and 11 percent respectively of the allocations. Human resources development was also set for a new impetus, they said.
“The budget provisions will have a positive impact on the country’s industrial and commercial establishments,” said Dr. Abdul Rahman, an economic analyst. One should expect next year to come up with even a better budget, if the present trend continues. Dr. Yasser Jifri said the budget reflected the increased provisions for development thanks to the oil price-rise.
Welcoming the new provisions for education and health care, economist Mohammed Zaki said: “The budget shows the Kingdom is determined to reduce the budget deficit.”
In the Eastern Province businessmen have welcomed Sunday’s budget and were unanimous in saying it reflects growth and development.
(Javid Hassan in Riyadh, Saeed Haider in Dammam and K.S. Ramkumar in Jeddah)
