Jeddah flood lessons: Fine-tuning public expenditures

Author: 
MOHAMED A. RAMADY
Publication Date: 
Tue, 2010-11-23 23:12

While the evidence of last year’s destruction still lingers on, and is deeply etched on many of the survivors and victim’s minds, the floods and how they were dealt with in the aftermath, unleashed a new public determination to put into practice two key words which are essential for any nation’s economic development: responsibility and accountability, so as to fine-tune public project expenditure in a cost effective manner. Without these, and a strong dose of meaningful transparency, the tragic lessons of Jeddah will become distant memories and Jeddah will fall back to running things as if nothing had happened, and blame will be placed at the foot of the victims in not obtaining planning permission to build their residences which fell into the line of the floods. This was the first incredible stance taken by some officials, who seemed to blithely ignore that more upscale residences and districts were also affected. Natural disaster does not recognize official or non-official permits, but only whether public and private civil engineering projects have been constructed on sound footings or not, and whether such expenditures have been wisely spent.
To recap, the floods claimed the lives of 130 people or more, depending on whom you talk to, caused damage estimated at over SR1 billion, and exposed grave mismanagement and shortfall cracks in public project inspection and follow up. What the flood also brought was an outpouring of individual heroism and the stirring of civil society taking matter into their own hands through the setting up of voluntary assistance and grass-root community help programs. Volunteers moved quickly, through teams of doctors, aid workers, and community experts to visit those marooned and to dispense food and medicine, initially donated by Jeddah’s leading merchants . Such experiences should not go to waste, as voluntary work and community care is part and parcel of any civil society and Saudi youth demonstrated that they had both the capacity and willingness to shoulder responsibility to alleviate their fellow citizen’s suffering.
The Saudi Arabian government has spared no effort over the past decades to pour billions of riyals into public work projects with the intention of making both citizens and residents lives more pleasant and safe. For those who go to Makkah or Madinah on Haj or Umrah, one is astonished at the amounts spent by the Kingdom on developing pilgrimage facilities, without a thought for monetary returns. Such projects’ cost effectiveness can only be measured when they are put to the test in times of crisis. The natural crisis of Jeddah in 2009 opened the floodgates of accusations and counter accusations of gross mismanagement and squandering of public funds which could have been put to more effective use. It was not too long ago that Saudi Arabia ran persistent budget deficits, and thanks to recent higher oil prices, the Kingdom has built up a surplus cushion to draw down on in times of erratic oil revenues. One shudders to think of what would happen if such natural disasters had struck in periods of budgetary deficits. The bottom line though, is responsibility and accountability, and these two parameters and yardsticks seemed to have been missing when the floodgates of disaster befell on Jeddah.
Custodian of the Two Holy Mosques King Abdullah quickly moved to try and identify the source of public project mismanagement, with anecdotal stories abounding of manholes being dug by contractors which were found to connect to nowhere, along with shoddy bridge and road engineering works, despite massive expenditure on such projects over the years. Some contractors and government officials, especially from those in the Jeddah municipality responsible for overseeing public projects, were questioned, others were not allowed to travel, and a committee was established reporting to the king on what went wrong in managing public funds. The king furthermore publicly commented that no one was above the law and should be held accountable for wrong deeds if they were proven.
This new found determination to the principles of responsibility and accountability is to be welcomed, not just in the Kingdom, but throughout the Middle East, as it is the basis on which other, less natural resource endowed economies, have outperformed countries with larger natural resources endowment. There is an opportunity cost, as they are fond in saying in economies, and accountability forces decision makers to account for every penny of their action. This, and a good doze of personal ethics…

 

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