Bahrain Mirror: The government of Bahrain announced a comprehensive package of reforms that will secure the Kingdom's long-term fiscal stability, stating that it signed a USD 10 billion financial support agreement with Saudi Arabia, UAE and Kuwait, according to the Bahrain News Agency (BNA).

The announcement said that the newly-announced Fiscal Balance Program, the product of a far-reaching spending review conducted across all government departments, will see the country's budget deficit eliminated by 2022, with the aim of delivering annual fiscal savings of BHD 800 million.

"This Program builds on previous fiscal consolidation efforts, where initiatives implemented during the period of 2015-2017 yielded annual fiscal savings amounting to BHD 854 million," it added.

Speaking at the announcement Bahrain's Deputy Prime Minister, Khaled bin Abdulla Al Khalifa, Chairman of the Ministerial Committee for Financial Affairs, said: "Today's announcement demonstrates our commitment to putting the government's finances on a solid and sustainable footing."

"Our Fiscal Balance Program combined with the Financial Support Agreement from Saudi Arabia, the UAE and Kuwait allows for a swift and achievable consolidation Program that balances fiscal sustainability with continued economic growth and prosperity," he highlighted.

For his part, Bahrain's Minister of Finance, Ahmed bin Mohamed Al Khalifa also said: "With spending reductions commencing in the short term and the target of eliminating the budget deficit by 2022, the Program secures the foundations of an economy that affords even more opportunity, more jobs, and greater living standards for the Kingdom's generations of today and tomorrow."

The Kingdom's Ministry of Finance provided details of a Program, which is centred on six pillars designed to align non-oil government revenues with economic growth.

The program included public expenditure reductions, through six dedicated Government Task Forces, a voluntary retirement scheme for government employees, providing participants with early access to end-of-service packages and the opportunity to utilise their skills in the private sector; and balancing the Electricity and Water Authority (EWA) expenditures and revenues, ensuring EWA is self-sufficient by 2022, incentivising sustainable consumption within the Kingdom while continuing to support Bahrainis in their first household.

It also targeted streamlining the distribution of cash subsidies, consolidating and redirecting cash subsidies towards eligible citizens to ensure fairness and improve quality of life , also targeting inefficient operational government expenditures, ensuring spending efficiency and strengthening accountability within government departments.

The program also covered implifying government processes and increasing non-oil revenues, to drive economic growth, diversify government income streams and align non-oil revenue with positive economic growth.

The measures also include the establishment of a series of new units designed to monitor spending, streamline processes, enhance transparency and increase efficiencies across government. These include the establishment of internal audit and central government procurement units within the Ministry of Finance, and a new debt management office.

Arabic Version