A plan to scrap meat subsidies in Bahrain from August 1 has been postponed by a month for review.

The decision was announced yesterday (July 14) following an order from His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa, said a report in the Gulf Daily News (GDN), our sister publication.

It followed a walkout earlier in the day by MPs who met government officials to discuss a planned subsidy overhaul.

MPs left the meeting in protest at government plans to scrap meat subsidies and replace them with food allowances for Bahrainis only.

Parliament approved the delayed national budget earlier this month based on assurances that it would be consulted on any plan to slash subsidies as part of government cost-cutting.

However, soon afterwards the Cabinet announced it was pushing ahead with a plan to reduce meat subsidies from August 1.

The Industry and Commerce Ministry reportedly sent letters to the country’s two main meat suppliers, the Bahrain Livestock Company and Delmon Poultry Company, on Monday informing them they would receive their last subsidy payment on July 31.

A parliamentary committee formed to oversee subsidy reform met for the first time yesterday senior government representatives to discuss ways to save money.

However, MPs on the subsidies redirection committee staged a walkout after its chairman Shaikh Majid Al Majid accusing the government of seeking to dictate terms.

“Our meeting was to discuss redirecting subsidies and increasing revenues, but MPs refused to continue the meeting before we got into the details,” said Shaikh Al Majid.

“We strictly told the government delegation during the meeting that lifting meat subsidies should be done through consultation with MPs because it would have huge repercussions for citizens’ welfare.

“Sending letters to the concerned companies without parliament’s knowledge is a U-turn on the agreement made when recommending the national budget for this year and next – that nothing will be implemented without our (parliament’s) consent alongside the Shura Council.

“This is a clear breach of the agreement and the essence of co-operation we showed towards the government when approving the budget.”

The government delegation was led by Parliament and Shura Council Affairs Minister Ghanim Al Buainain and included Energy Minister Dr Abdulhussain Mirza, alongside other senior officials.

Once meat subsidies are lifted Bahrainis will be compensated with direct payments into their bank accounts, with breadwinners allocated BD5 ($13) per month, other adults BD3.5 and children BD2.5.

The government is also considering lifting subsidies on electricity, water, oil and gas.

Shaikh Al Majid yesterday complained the government appeared unwilling to negotiate and argued any delegation that met MPs should 
be headed by a Deputy Prime Minister.

“MPs acknowledge the need to redirect subsidies to Bahrainis (who need them most) due to the financial situation the country is going through, but protecting people was a priority and MPs should know what benefits these savings will have for the public,” he said.

The government delegation is now due to meet Shura Council representatives to discuss subsidies, before joint meetings are held after Eid Al Fitr.

Bahrain needs to make savings as a result of lower oil prices, which account for at least 80 per cent of the country’s revenues but have halved since last summer.

The government has targeted subsidy reductions as a key way to slash expenditure, with large budget deficits of BD1.504 billion expected this year and BD1.505 billion in 2016.

Subsidies cost the government BD935 million last year.

Meanwhile, the government committee, in a statement late last night, said that the decision to redirect meat subsidies and to ensure that such a move benefits citizens in the form of cash compensation was taken in consultation with the legislative authority.

It said the government will not back down from implementing a decision taken within its executive prerogatives in accordance with the Constitution.

The committee also expressed reservations over a statement by Shaikh Al Majid that the “government delegation wanted to impose on parliament the decision to redirect meat subsidies as a  fait accompli, by sending a number of ministers to a meeting the agenda of which has been set by the government delegation without consultation with MPs”.

The committee said such claims “lacked accuracy”.  - TradeArabia News Service