According to Muhammad Bakr, a member of the Shoura Council, the state has stakes in more than 20 shareholder companies with a total value of SR400 billion at current market prices. Government shares generate SR10 billion in annual revenues that find its way to the state coffers.
Bakr says this income bolsters the government policy aimed at diversifying the sources of income, reducing its dependence on oil as the main source of revenues. He sees no convincing reasons to make the government — represented by the Ministry of Finance — give up those investments that each year yield this handsome income. The honorable member seems to see only one side of the moon. It is true, the state is collecting SR10 billion annually in revenues from its investment in those companies but at the same time it continues to pay some SR40 billion in debt service to overcome the staggering SR700 billion public debt.
The share of each Saudi citizen in this debt amounts to SR30,000, according to economist Ihsan Bouhleiga.
Any person with little knowledge of economics knows that settling the public debt is a priority over earning revenues that end up in public expenditure, especially that chapter one of the state budget devoted to wages and salaries consumes up to 60 percent of the allocations.
There are many considerations that justify selling government investments. Privatization should be the strategic alternative of the state. Taking such a step would help absorb the extra liquidity in the market estimated at SR500 billion and encourage the return of Saudi money abroad, estimated to amount to SR3,000 billion. This would curb the wild speculation in the stock and real estate markets that over the past months has reached astronomical levels. It would open the way for new investments and create more job opportunities. It is important to open new venues for future generations and furnish the suitable conditions to ensure they get jobs without burdening them with more public debt.
Before the Gulf War our foreign reserves stood at $180 billion with every one hoping to see the figure rise up so that future generations could be spared the effects of fluctuations in oil prices and any restraints on production. The policy of spending all that is at hand and wait for more to come down from heaven is one favored by the spendthrift and not by wise states.
