Bahrain's government is pushing ahead with plans to axe meat subsidies from August 1, despite objections from parliament and Shura Council.

Both chambers of the National Assembly have just approved the national budget for this year and the next on the condition that subsidies would only be removed following consultation with legislators, said a report in the Gulf Daily News (GDN), our sister publication.

However, Information Affairs Minister Isa Al Hammadi yesterday (July 6) said a decision has not been taken to delay or cancel the government plans.

He said negotiations on an overhaul of the subsidy system, including redirecting other subsidies such as electricity, water, oil and gas, will be held in the coming days between the Cabinet, Shura Council and parliament.

“The BD47 million ($122.6 million) set aside for meat subsidies in the national budget will not be touched, but it doesn’t mean our plans to axe subsidies on companies and non-Bahrainis will be stopped,” said Al Hammadi, who is also the official government spokesman.

“The Cabinet has not cancelled the decision, so it is not part of the deals that will be forged in the next few days.

“However, the criteria that states breadwinners will receive monthly meat allowance of BD5, adults BD3.5 and children BD2.5 could be subject to change, and we are willing to listen to suggestions.

“So far payments will be distributed as announced and directly into bank accounts (of Bahrainis).Plans to redirect subsidies on others like electricity and water, oil and gas, are also there and have not been put on hold.” He was speaking at a Press conference held at the Gudaibiya Palace after the weekly Cabinet session.

The joint committee that will negotiate other subsidies will comprise of Deputy Premier Shaikh Khalid bin Abdulla Al Khalifa, Shura Council first vice-chairman Jamal Fakhro and parliament legislative and legal affairs committee chairman Shaikh Majid Al Majid.

The GDN yesterday reported on Bahrain’s new-look national budget for 2015 and 2016, which cleared its final hurdle when it was unanimously approved by the Shura Council.

Approval

The revised budget has already been approved by MPs and will be backdated to January, as it is already six months late.

The National Assembly’s opposition to the government’s plans to slash subsidies, as well as disagreements over the distribution of funds, were key reasons for the delays.

A massive drop in the oil price – which has halved since last summer – also meant the original draft was late in being presented to the National Assembly.

Bahrain has had to find ways to rein in spending, with oil revenues accounting for at least 80 per cent of the country’s revenues.

The revised budget will increase the projected deficit by a total of BD28 million over the two-year period.

As a result the budget deficit, originally estimated at BD1.474 billion this year and BD1.563 billion next year, will increase to BD1.504 billion in 2015 – but drop to BD1.505 billion in 2016. - TradeArabia News Service