Government Enters "Financial Foolishness" Stage: Low Oil Prices, Higher Deficit
2023-09-28 - 1:25 p
Bahrain Mirror: Believe it or not, the government of Bahrain has come after only nine months to request a meeting with the Speakers of the House of Representatives and the Shura Council and their members, in order to raise the debt ceiling by one billion dinars. It also announced that the country's actual deficit reached BD381 million ($1.01 billion) for the first six months of this year alone.
"Officials at the meeting reviewed a proposal to raise the public debt ceiling by one billion Bahraini dinars to cover financing needs during the implementation period of the general budget for the years 2023-2024," the statement said.
It is a meeting that exposes a complete and clear failure of this government. However, the strange thing in this meeting is that the government told the representatives and members of the councils that the reason for this deficit and failure is the decline in oil prices, which is certainly a false and non-factual reason. Oil prices have never fallen from the figure set by the government and adopted as a price per barrel in the draft general budget, and the figure that the entire budget of expenses and revenues is based on.
The budget approved by the government and passed by the two chambers for the year 2023 was based on the price of a barrel of oil ($ 60). OPEC basket oil prices during the first half of this year averaged $79.5.
The government has practically added more than 220 million dinars to its revenues due to high oil prices, so how can it come now and say that it has a deficit of 381 million dinars ($1.01 billion) and asks both chambers to raise its debt ceiling again to borrow one billion dinars, which is equivalent to more than $3 billion and $700 million.
There was talk about the "fiscal balance" program, but the financial issue in Bahrain unfortunately reached the point of "foolishness". It is tumbling without brakes, in free fall towards a bottomless pit. Unfortunately all this collapsing and foolishness is taking place without accountability with the presence of a parliament that acts as an analyst of suspicious relations.
They are committing theft in broad daylight, as the government has not added a new project to the projects it has announced, in addition to the fact that most of the announced projects such as housing projects, street development and others, all depend on funds that comes from Saudi Arabia, the UAE and Kuwait, and this is fixed in the public budget.
So why did expenses increase and how did revenues even drop? And why did the government ask to raise the debt ceiling another billion?
It is important to recall that the Government of Bahrain announced in December 2020 an increase in the borrowing ceiling, in accordance with the provisions of Decree-Law No. (27) of 2020, that the public debt ceiling should not exceed 15 billion dinars, but it broke it in 2021 when what it borrowed internally and externally exceeded 16.863 billion dinars.
What is funny and upsetting at the same time is the conclusion of the statement issued by the meeting of the government delegation with the Shura Council and the House of Representatives, in which the government stressed that it is "committed to achieving the objectives of the fiscal balance program according to the specified timetable in order to promote financial stability and economic development for the kingdom to continue to create quality opportunities for citizens."
This government is, in fact, mocking the people of Bahrain, undermining their intelligence, and even humiliating them in front of the peoples of the entire region.