RIYADH, 22 December 2003 — Every Saudi is born with a debt of SR27,000 because of the mounting government debt of SR660 billion which is equal to 83 percent of the GDP.
Describing it as “a major concern”, a special report on the latest government budget prepared by the Consulting Center on Finance and Investment (CCFI) points out that a bloated bureaucracy, security concerns and the implications of joining the World Trade Organization (WTO), in addition to health care, human resources development and education, have put enormous pressure on government spending.
The study points out that actual current expenditures reached 88 percent of the total spending this year and are budgeted to be close to 82 percent next year. “The prime reason for the build-up of current expenditure is the increasing government size. Salaries alone constitutes 60 percent, or SR138 billion, of the total expenditure.”
The study notes that the high level of recurrent government spending “is bound to cause distortions in the productive ability of the economy.”
The problem is compounded by increased defense expenditure and debt servicing. The report said the government was paying insufficient attention to the accumulated SR660 billion debt which “is alarming by international standards. It eats into approximately 13 percent of the total government expenditure in the form of interest.
