Allocating the Public’s Money
Just what I love, good hard numbers, the allocation (or not) of the budget on infrastructure.
[12/12/2005] (NewsYemen ) Dec 12, Sanaa – The 2006 budget proposed by the government allocates much more for defense and security compared to developmental sectors such as education, health, and electricity, said Yemeni parliamentarian Abdulkarim Shaiban.The education sector was allocated YR 184 billion with an increase of YR 7 billion and health increased by 10% to become YR 46 billion. Electricity got YR 27 billion, which constitutes a decrease of almost 60% from last year’s budget.
Meanwhile, defense and security were the biggest winners in the proposed budget as they gained an unprecedented increase of YR 100 billion, totaling YR 274 billion. This is greater than all the aforementioned three developmental sectors put together.
Shaiban, who is a member of the parliament’s financial committee added that “increase of allocated amount for the education sector could barely cover the extra expenses for the new students who would enroll in 2006. This is the case despite the statistics that confirm that one million children are in the schooling age but are not enrolled.”
He added that among the biggest disappointments was the “electricity sector, which was reduced by YR 38 billion as it was YR 65 billion in 2006.”
Shaiban noted that the government admitted a decrease in investments, which he said would continue to decline if the government continues to ignore vital infrastructure services such as electricity.
He said there is a ‘mystery’ in the way the government is dealing with the oil sector. “While allocating YR 176 billion to support petroleum derivatives for 2005, which resembles an increase of %85, we all know that subsidies for those products were partially lifted in July 2005.” Shaiban said.
“The citizen is going to be the ultimate victim.”
Concerning the government’s pledges to fight corruption, Shaiban is convinced it is merely ‘empty rhetoric’ and that the financial statement of 2005 demonstrates that the government continued to overlook corruption and ignore taking serious efforts to curb it.
“Corruption requires clear and courageous steps and not general moves.” he said, adding that corruption will flourish if the government does not channel funds to the sectors in need such as local councils, which will continue to suffer from fund shortage. He noted that despite planned yearly increases of YR 25 billion for local councils, the budget for 2006 approved an increase of just YR 8 billion.
External and internal debts also increased in the proposed budget. Total debt for 2006 was estimated to be YR 103 billion, which resembles an increase of about YR 32 billion. Foreign loans would be about YR 63 billion in 2006, indicating an increase of YR 12 billion, i.e., %22.
The budget estimated YR 18 billion to cover some of the local and foreign debts. This constitutes an increase of YR 191 million, resembling an increase of 1.8%.
Shaiban harshly criticized the government’s attitude towards parliament’s recommendations. “The government never takes the parliament’s recommendations seriously. Its ignorance of the 2005 is a clear example of this attitude.” he said.
“The parliament recommended that the government provides a 700 megawatt power supply in the first stage. But it simply cut the electricity budget by more than half this year.” Shaiban complained.
Meanwhile, the government still depends on oil to cover 75% of the government’s income and this is considered a major drawback because the oil market is volatile, he explained.
He was puzzled by the government’s estimates of oil revenues for 2006 by recalling government’s claims that each barrel would be sold for USD 40, while “the average cost of one barrel is USD 57”.
Shaiban concluded by warning that the government could face a crisis next year if it ignores major challenges such as corruption and lack of independent judiciary. He also noted that the government would probably propose a supplementary budget next year just as it did this year. It will rely on the ruling party’s dominant majority to pass any further budgets needed.
“This will only make things worse” he said.
Related: The World Bank at a news conference in Sanaa was harshly critical of the lack of progress on economic reforms.
