Yesterday, the government informed the Parliamentary Finance Committee of the imperative of adopting the public debt law as a temporary solution, to face the prolonged liquidity crisis due to the economic conditions that the country is witnessing in light of the growth in the budget and the continued collapse of oil prices, Al Qabas daily reported.
Informed sources revealed that Finance Minister Khalifa Hamadeh stressed during the meeting that the liquidity scarcity needs quick, medium, and long-term solutions, stressing that the budget needs a monthly boost of one billion dinars.
The sources added to Al-Qabas that the government side called on the MPs to understand the economic conditions that the country is going through, and to give the government the necessary flexibility to approve the public debt law in a way that meets the needs of liquidity enhancement.
In response to the committee’s question regarding securing the salaries of employees in the state, government representatives emphasized that liquidity is currently sufficient for the salaries of March, and that the continued ability to pay salaries depends on the legislation to provide liquidity. The state budget, including the expenditures item, grows annually with the increase of the population, especially Chapter One, which requires an increase in the budget to accommodate the annual growth in employment, subsidies, housing, and others.
For its part, the Finance Committee critiqued the government’s failed policy in managing the crisis, calling for an end to waste of public funds, and touched on the expenditures of some parties that do not show an understanding that the country is passing through financial difficulties.
The committee directed harsh criticism to the government for its intention to withdraw from the Al-Ajyal Reserve Fund, demanding the withdrawal of the request that was recently referred to the National Assembly regarding the removal of KD5 billion annually from the fund.
The committee expressed preliminary approval to approve the public debt law, but saw the need to reduce the borrowing ceiling to KD10 billion.
On the other hand, the government affirmed its urgent need for liquidity to finance the budget deficit, stressing that the liquidity crisis is prolonged and not an emergency, which requires real reforms that guarantee sustainable solutions in the medium and long terms.
The government reviewed before the committee the causes of the liquidity problem, the reality in which the government is experiencing, and its estimates of the crisis in the coming years, including expectations of oil prices, revenues, and expenditures. Stressing the need for the two authorities to cooperate in passing the necessary laws, realizing that the blame-exchange phase between the two authorities has no time left for it.
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