JEDDAH, 9 December 2004 — The Kingdom’s balanced 2005 budget, which envisages total government revenues and expenditures of SR280 billion each, reflects a government policy that focuses on manpower development. Expenditure on manpower development accounted for 25 percent of the total outlays for 2005 with spending on this sector increased to SR70 billion, up by 9 percent from last year’s figure of SR63.7 billion.
The budget which includes new projects and programs costing SR75.5 billion was intended to reflect an ideal investment of the available financial resources in a manner that serves the requirements of the country’s development drive by giving priority to the services that directly affect the citizens - education, health as well as social and municipal services. The ultimate objective is to stimulate economic growth and create new jobs for a rising population mostly made up of young people eager to enter the job market. It also aims at encouraging the private sector now that the government has embarked on an ambitious reform and privatization drive.
Although expenditure on manpower development in last year’s (2004) budget accounted for 27.7 percent of the total outlays, the total amount of SR63.7 billion was less than what was allocated in the new budget. Nevertheless, last year’s allocations were about 11 percent more than the outlays for 2003.
The amounts to be spent on general education, higher education and manpower training are intended to further strengthen the development of human resources. A total of SR14 billion has been allocated for the construction of 1,420 new schools for boys and girls to accommodate the growing number of children seeking access to schools, in addition to spending on 2,260 existing schools, the renovation and equipping of 2,000 schools complete with laboratories and computers.
In the higher education sector, the budget included projects for the construction and equipping of 22 new colleges and spending on new universities currently under construction in addition to the building of four university hospitals and campuses.
In total, an amount of SR14.65 billion has been allocated for public education, higher education and training of manpower in these institutions.
The proposed budget also calls for the implementation of urgent training programs in various professions needed by the market to provide jobs for Saudi youth as part of the state’s Saudization drive aimed at the gradual replacement of foreign workers with Saudis. A military vocational training program being executed would be continued to absorb more jobseekers.
The government has opened up the education sector to private investment and urged the private sector to invest in the sector. Last year’s budget (2004) outlays for manpower development included funds for lending programs to establish private universities, colleges and schools.
The new budget statement provided expenditure details for education and manpower development, health and social development, municipal services, transportation and communication, and infrastructure including industry and electricity. However it did not show expenditure details regarding defense and security or general administration.
Another sector that has seen an increase in expenditure in the new budget was the health and social development for which SR27 billion has been allocated. This is SR2.7 billion more than the figure allocated for the sector in 2004 budget. In 2003 budget the figure was SR23.2 billion.
The new budget includes the establishment of 23 new hospitals with a combined capacity of 3,150 beds as well as furnishing, expanding, modernizing and developing the existing health utilities.
Development of the infrastructure sector has also been given priority in the new budget. An amount of SR8.85 billion has been allocated for transport and communication including the construction of 6,700 kms of new highways and double-lane roads.
The allocations for water, desalination, sewage and dam projects was fixed at more than SR17 billion. The Kingdom is currently implementing desalination and sewage projects at a total cost of SR29 billion.
Municipal services have been allocated SR10.65 billion compared to SR8.6 billion in 2004 and SR7.5 billion in 2003. The money will be spent on the construction, expansion and repair of streets, tunnels, floodwater control and garbage collecting projects.
In the area of specialized development funds and financing government programs, the budget allocated an increase of SR9 billion in the capital of the Real Estate Development Fund which provides soft loans to citizens to build homes. The capital of the Saudi Credit Bank will also be increased by SR2 billion. The loans provided by both banks in the new fiscal year, to the tune of SR10 billion, are intended to stimulate economic growth by broadening the base of private participation.
