Minister of Finance Khalifa Hamadah called on Tuesday for tackling shortage in financial resources namely drastic depletion of liquidity in the treasury as soon as possible, in tandem with basic financial and economic reforms. The minister made the statement today after the government submitted a bill to allow it to withdraw a maximum KD five billion (USD 16 billion) from the “next generations fund” to cope with the depleting liquidity in the state treasury (the general reserves fund).
He affirmed that the government filed the draft law to the National Assembly, on Monday, due to a shortage of financial resources. The bill is one of the proposed solutions; it is also part of a package of bills including the general debt law and financial reforms, minister Hamadah explained. Among the solutions, he has said, is selling income-generating assets from the reserves fund to the generations fund, stoppage of the deduction of the ten percent share for the general fund from the overall actual proceeds of the budget. He has indicated that these steps are temporary, intended to fulfil some of the state liabilities, such as payment of salaries and subsidies that account to 71 percent of the state overall expenditure.
Minister Hamadah has affirmed that “our prime goal” is to spare limited income citizens financial burdens, speeding up economic reforms and safeguarding the living standards. He has indicated further that the money withdrawals must be simultaneous with fundamental financial and economic reforms to slash spending and increase non-oil returns.
Hamadah forecast an accumulated deficit estimated at KD 55.4 billion (USD 180 billion) in the five years following the 2010-2020 fiscal year, with projected expenditure at KD 114.1 billion (USD 374 billion), noting that KD 81 billion (USD 266 billion) of the sum would be allotted for salaries and subsidies.
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