A comprehensive study on overhauling the subsidy system is currently underway at Cabinet level in Bahrain, Information Affairs Minister and official government spokesman Isa Al Hammadi said yesterday (March 30).

Expatriates and private companies, not Bahrainis, will be affected by subsidy cuts, he confirmed during a Press conference after the weekly Cabinet session at Gudaibiya Palace, said a report in the Gulf Daily News (GDN), our sister publication.

He said the new system would be presented to the National Assembly alongside the two-year national budget for this and next year.

However, he added the government would continue to borrow up to BD7 billion ($18.4 billion) in line with a decree that raised the debt ceiling from BD5 billion last November, even though parliament retrospectively voted against the decree last week.

“We are negotiating fields of spending that will be included in the national budget with members of parliament and the Shura Council and have stressed the new direction will see citizens benefit,” he said.

“This requires a redirection of subsidies to ensure those benefiting are citizens rather than expatriates and companies and a comprehensive study is underway by the Finance Ministry.

“For example, the study would address basic food staples currently subsidised and the introduction of a new system of implementation.”

He said the Cabinet has decided that more than half of the $10 billion GCC Aid will be directed to housing, and this will be reflected on the budget, besides other revenues the government is planning to allocate.

Cabinet secretary-general Dr Yasser Al Nasser said the ministerial committee for financial affairs had been tasked with reaching an agreement with MPs on the budget, which has been affected by lower oil prices. - TradeArabia News Service