Priorities on Bahrain’s legislative agenda
http://archive.gulfnews.com/business/Comment_and_Analysis/10088246.html
12/10/2006 01:01 AM | By Jasim Ali, Special to Gulf News
Bahrain’s newly-elected members of the Parliament ought to focus their energy on the major economic challenges facing the country.
The 40-strong body, which includes only one woman, was elected for a four-year term in the general elections, which were held in late November and early December. The parliamentary elections are an integral part of Bahrain’s socio-political reforms launched in early 2001.
Constituents expect their representatives to address some key economic issues such as jobs and reforms. One concern is the declining representation of Bahraini workforce in private sector jobs.
Priorities on Bahrain’s legislative agenda
http://archive.gulfnews.com/business/Comment_and_Analysis/10088246.html
12/10/2006 01:01 AM | By Jasim Ali, Special to Gulf News
Bahrain’s newly-elected members of the Parliament ought to focus their energy on the major economic challenges facing the country.
The 40-strong body, which includes only one woman, was elected for a four-year term in the general elections, which were held in late November and early December. The parliamentary elections are an integral part of Bahrain’s socio-political reforms launched in early 2001.
Constituents expect their representatives to address some key economic issues such as jobs and reforms. One concern is the declining representation of Bahraini workforce in private sector jobs.
Bahraini nationals accounted for a mere 23 per cent of the number of employees in private establishments in the first quarter of 2006 versus 24 per cent in 2005 and nearly 32 per cent of private sector jobs in 2001.
Unemployment
The issue is critical in view of the growing share of private sector firms in the economy. If left unresolved, the trend could worsen the unemployment problem in the country, which currently stands at approximately eight per cent.
Therefore, privatisation remains a growing concern among nationals, as foreign firms are increasingly taking control of public assets.
Earlier in the year, three foreign firms assumed control of the Hidd power and water plant, which is the primary utility complex in the country. An international firm has recently won a 25-year contract to manage Bahrain’s ports services, namely Mina Salman in Manama and Khalifa Bin Salman in Hidd (which is still under construction).
The third economic issue is poverty.
The United Nations Development Programme (UNDP) considers a Bahraini family consisting of six members as poor if monthly income falls below $936.
According to UNDP, approximately 11 per cent of Bahraini families live below the poverty line. Many families rely on support extended by the ministry of social development, but more importantly charitable associations, which are scattered throughout the nation.
The relatively strong population growth of more than 2.5 per cent places further pressure on the poverty debacle.
The fourth economic concern deals with solving an acute housing problem. Many nationals depend on government-subsidised units for accommodation.
However, there are more than 40,000 pending applications for various types of loans extended by state-owned Housing Bank.
As a resolution, efforts are under way regarding forming a partnership between public and private establishments (notably financial institutions) to address the housing issue.
Spending
The fifth economic challenge is related to limited public-sector spending. It is argued that growing oil receipt allows the authorities to spend more rather than less.
In the fiscal year 2005, the budget recorded a surplus of $680 million, thereby reversing planned deficit of $778 million. This surplus was achieved partly as a result of the government’s decision not to spend all the allocation for capital projects.
The authorities used only 53 per cent of allocated budget for capital spending. Thus, there are growing calls for the government to spend more in view of firm oil prices.
Increasing significance of oil in the treasury income is another issue. Oil accounted for 76 per cent of total revenues in 2005, up from 73 per cent in 2004 due to firmer oil prices in international markets.
Increasing dependence on oil is contradictory to the government’s goal of diversifying the economy away from the hydrocarbons sector.
Similar to other places in the world, improving the well-being of people is of primary significance.
Clearly, Bahrain’s newly-elected MPs have a daunting task ahead of them as they assume their jobs in mid-December. Certainly results rather than efforts count.
– The writer is head of the Economic Research Unit, University of Bahrain.
