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December 24, 2004 |
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ALLOCATIONS OF THE NEW BUDGET FOR IMPLEMENTING NEW PROJECTS AMOUNT TO ABOUT TWICE AS MUCH AS THE ALLOCATIONS OF THE LAST FISCAL YEAR'S BUDGET." 25% OF THE BUDGET'S ALLOCATIONS TO BE SPENT ON PUBLIC EDUCATION, HIGHER EDUCATION, AND TECHNICAL AND VOCATIONAL TRAINING. FIGURE FOR PRIMARY HEALTH CARE IS THREE TIMES THE SIZE OF THE ALLOCATIONS OF THE PREVIOUS FISCAL YEAR'S GENERAL BUDGET. THE NEW GENERAL BUDGET FOR THE FISCAL YEAR 1425-1426 AMOUNTS TO SR 280 BILLION, THE FIGURE EXCEEDS THE PREVIOUS BUDGET OF THE FISCAL YEAR 1424-1425 BY SR 50 BILLION. Under the chairmanship of the Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz, the Cabinet held a meeting to approve the State's general budget for the fiscal year 1425-1426H. The State's revenues were estimated at SR 280 billion, while the expenditures were estimated at SR 280 billion. This was announced by Culture and Information Minister Dr Fou'ad Ibn Abdul-Salam Al-Farsi in a statement to SPA. The King's speech was read on his behalf by Abdul Aziz Al-Salim, the Cabinet's Secretary General at the Cabinet meeting. In his speech, the King said the new general budget for the fiscal year 1425-1426 amounts to SR 280 billion. This figure exceeds the previous budget of the fiscal year 1424-1425 by SR 50 billion, he added. "Moreover, the budget coincides with the beginning of the eighth development plan, and it aims at boosting the national economy and achievement of a comprehensive development. "We have given priority to investment in the clear growth in the general revenues so as to accelerate whatever contribute to availing the necessary services for the citizens, and to give an impetus to the march of development, taking into account the importance of reducing the public debt," he said. The King noted that the general budget has been prepared to make the required allocations available for meeting the expenditures required for the operation of the ministries and governmental institutions, as well as to continue the process of modernizing and maintaining the public utilities and preserving them, along with completing projects that have already been started. "Moreover, the budget contains new development and service projects as well as projects that will positively contribute to enhancing the process of development and the role of the private sector. The allocations of the new budget for implementing new projects amount to about twice as much as the allocations of the last fiscal year's budget." In his speech, the King said "Twenty-five percent of the budget's allocations will be spent on public education, higher education, and technical and vocational training . "This aims at improving the educational and training environment, broadening its capacity, as well as diversifying and developing its outcome in a manner that suits the labor market and increases job opportunities for the citizens. "The new educational and training projects in the new general budget include: establishment and renovation of 1,420 schools for boys and girls. "Boosting the higher education by establishing and renovating 22 colleges, four university hospitals, and establishing and renovating 61 educational and training institutions (both technical and vocational). "In the field of primary health care, the new general budget includes new projects for the establishment and renovation of 420 primary health care centers in various parts of the Kingdom. This figure is three times the size of the allocations of the previous fiscal year's general budget. "It also includes establishment of 23 new hospitals as well as furnishing, expanding, modernizing and developing the existing health utilities. " The budget also includes new allocations for the development of the municipal services, boosting the agricultural sector, development of information technology at the government bodies, implementation of projects of 6,700 kilometer road networks. "More than SR 17 billion have been allocated for projects of water and sewage and dams." Meanwhile, Culture and Information Minister Dr Fou'ad Ibn Abdul-Salam Al-Farsi said the King had noted that the new budget includes new projects and programs costing a total amount of nearly SR 75.5 billion. "The new budget aims at the ideal investment of the available financial resources in a manner that serves the requirements of the comprehensive development, giving priority to services that directly concern citizens such as health, education, social and municipal services. "Moreover, the new budget includes new development projects for all regions of the Kingdom of Saudi Arabia," Dr Al-Farsi said . "These projects will positively contribute to improving the process of economic growth and to creating new job opportunities for the citizens as wall as encouraging the private investment. "This will also lead to the achievement of balance between revenues and expenditures." Dr Al-Farsi said SR 70,100,000,000 have been allocated for the sectors of public education, higher education and training of manpower. The new budget includes projects due to be implemented at the cost of about SR 14,650,000,000 in the fields of schools, universities and specialized colleges. A sum of SR 27,100,000,000 has been allocated for the sectors of health services and social development. The total amount allocated for the new projects in the health sector is SR 4,600,000,000. These projects include the establishment and renovation of 420 health primary health care centers in various parts of the Kingdom. They also cover 23 hospitals with a capacity of 3,150 beds. As regards the municipal services, the amount of SR 10,650,000,000 has been allocated for this sector. The budget includes new projects and expansion of some existing projects at a total cost of about SR 7,200,000,000. These projects cover costs of tunnels, flyovers, roads and streets, drainage of rains-water as well as asphalting and lightening some streets. For projects in the sectors of transport and telecommunications, Dr Al-Farsi said the amount of SR 8,850,000,000 has been allocated. The budget includes projects of water and sewage as well as dams, wells, pumping, and water desalination stations at a cost of about SR 17,200,000,000. Arrangements are underway to implement projects of water and sewage and water desalination at a total cost of about SR 29,000,000,000. In the field of the industrial sector, the budget includes new projects in Jubail and Yanbu for the development of infrastructure projects in petrochemical industries. As regards the specialized development funds and financing governmental programs, the capital of the Real Estate Development Fund will be given an increase of SR 9,000,000,000, and the capital of the Saudi Credit Bank will be enhanced by SR 2,000,000,000. These loans will positively contribute to the acceleration of the wheel of the national economy; and the loans due to be extended in the fiscal year 1425-1426H are expected to amount to SR 10,000,000,000. The estimates of the General Statistics Department as regards the development of the national economy, the Gross Domestic Product (GDP) for this year 1424-1425H (2004), is expected to amount to SR 931,800,000,000. The GDP for the private sector is expected to witness an increase of 6.7 percent under current prices and 5.7 percent under fixed prices. Growth in the non-petroleum manufacturing industries is expected to amount to 6.4 percent, and in sectors of telecommunications, transport, and storage to 7.8 percent . The sector of electricity, gas and water is also expected to grow by 4.5 percent, the sector of building and construction by 7.5 percent, and wholesale and retail trade, restaurants, and hotels by 4.9 percent. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz has issued royal decrees on the new budget for the fiscal year 1425/1426. In Reference to the royal decree regarding making use of the exceptional increase of income in the fiscal year of 1424/1425, namely, to allocate SR. 41,000,000,000 of the surplus of the income of that year to implement an additional specific program aimed at developing and improving the services that are included in the royal decree for five years starting from the fiscal year of 1425/1426 and the increase of the capital of real estate fund development and Saudi Credit Bank, and in reference to State revenues and expenditures for the fiscal year of 1425/1426, we have decreed: First: The total revenues for the state for the fiscal year of 1425/1426h are projected at SR 280,000,000,000. The state expenditures for the fiscal year of 1425/1426h are budgeted at SR 280,000,000,000. Second: Revenues should be collected in accordance with financial systems and deposited in the current account of the Ministry of Finance at the Saudi Arabian Monetary Agency. Third: The Minister of Finance is mandated to add the necessary amounts of expenditures during the fiscal year of 1425/1426 from the surplus of revenues of the fiscal year of 1424/1425 to cover financed projects from this surplus as dictated by the relevant Royal Order dated 10/9/1425H. Fourth: All expenditures should be spent in accordance with the designations of the budget and directives relating to it. Fifth: The surplus should be allocated to settling the public debt and in case of deficit in the budget, the Minister of Finance is authorized to borrow to cover it. Sixth: A) Transfers among the budget's approved chapters, branches and sections are to take place upon a joint report by the Minister of Finance and either the authorized minister or head of an independent-budget department. B) Transfers among the articles of each of Chapter I and Chapter II are decided by the authorized minister or head of an independent-budget department, provided that each transfer should not exceed half of the original appropriation of the recipient chapter. Salaries chapters are exempt from this provision, except in accordance to paragraph (a) of that chapter. Seventh: It is not allowed to use any appropriation for an unauthorized purpose, nor to issue an order of commitment or payment exceeding the appropriation or a commitment to cover expenditure not approved in the budget. Eighth: It is not allowed to issue a decision or conclude a contract that lays a burden on a coming fiscal year except for the following: A) Contracts in continuous progress or periodically-implemented such as leasing, labor and service contracts, catering, medicines and medical supply contracts, and consultative service contracts having repetitive annual appropriations. B) Supply contracts approved in Chapter II requiring contracting for more than one year, provided that the annual value of a contract runs within the budgeted appropriation. The first financial year appropriation is set as a standard to set the value of the contract, provided that the amount of the contract not to be linked to other purposes. C) Contracts of operation, maintenance and projects implementation, provided that the commitment be limited to the approved authorization for each program or project. Ninth: The government's control bodies have to strictly follow-up the implementation of the cabinet's resolution No. (52), dated 7/3/1420 H. and Article 3/H of the Government Procurement Supply and Projects Implementation System. In case there is a strong justification to divide the purchases and businesses, prior coordination with the Ministry of Finance is required. Tenth: During the fiscal year of 1425/1426 H., if the set appropriation be exceeded due to past years' pledges owing to unwarranted action, the issue should be considered by the President of the cabinet. Otherwise, the Minister of Finance is authorized to permit disbursement of these amounts from appropriations of the fiscal year 1425/1426 H. Eleventh: Administrative formations for all bodies are approved according to what is issued by the General Budget; any amendment should be made by a decision by the Higher Committee of Administrative Reforms or by the Ministerial Committee of Administrative Organization. Twelfth: Appointment or promotion of employees should only be made to jobs approved in the budget and according to provisions of the followed regulations and laws. Thirteenth: A- During the fiscal year, no creation of jobs, grades or ranks is allowed except for what is approved in the budget. B- Excluded from paragraph A is the appointment of ministers and jobs created according to provisions of the temporary jobs regulation. C- During the fiscal year, grades and ranks approved in the budget are not promotable. D- Amendment of titles of jobs is allowed through a decision by the Minister of Civil Service and according to rules of job categorizations; allowed also is the demotion of grades based on a recommendation by representatives of the Ministry of Finance, the Ministry of Civil Service and the concerned bodies. E- Approved jobs are exchanged among chapters and branches of the budget according to a decision by the Minister of Finance. Fourteenth: The Minister of Finance issues the necessary instructions for the implementation of this budget according to the rules stated in these decrees. Fifteenth: Vice President of the cabinet and the concerned ministers should implement this decree. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz has issued a royal decree on the revenues and expenditures of the municipalities and rural communities: First: The expenditures of municipalities for the fiscal year of 1425/1426 are estimated at SR10,655,849,000. Second: The revenues of municipalities and rural communities for the fiscal year of 1425/1426 are estimated at SR 1, 679,529,000. Third: The difference between direct revenues and expenditures in the general budget is estimated at SR 8,976,320,000. Fourth: Expenditures shall be spent in accordance with the financial regulations. Fifth: Municipalities and rural communities shall collect their revenues in accordance with regulations. Sixth: Stated rules approved by the general budget for the fiscal year 1425/1426H. shall be applied to the budgets of municipalities and rural communities. Seventh: Transfer of surplus amounts of budgets of municipalities and rural communities shall be approved by the prime minister. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz has issued a royal decree on the revenues and expenditures of the general organizations whose budgets are annexed to the general budget for the fiscal year 1425/1426H. 1- The revenues of the General Organization of Sea Ports are estimated at SR 1,780,000,000, and expenditures at SR 465,682,000. 2- The revenues and expenditures of the General Organization of Saudi Arabian Airline are estimated at 13,595,000,000. 3- The revenues of the General Organization of Grain Silos and Flour Mills are estimated at SR 1,254,000,000, and expenditures at SR 505,455,000. 4- The revenues and expenditures of the General Corporation of Saline Water Conversion are estimated at SR 2,256,904,000. 5- The revenues of the General Organization of Railways are estimated at SR 165,000,000, and expenditures at SR 420,856,000. 6- The revenues of Jubail and Yanbu Royal Commission are estimated at SR 301,210,000, and expenditures at 2,729,340,000. 7- The revenues of and expenditures of Saudi Arabian Authority of Specifications and Standardization are estimated at SR 105,727,000. 8- The revenues and expenditures of the General Authority of Investment are estimated at 83,705,000. 9- The revenues and expenditures of King Saud University are estimated at SR 2,608,254,000. 10- The revenues and expenditures of King Abdulaziz University are estimated at SR 1,620,877,000. 11- The revenues and expenditures of King Fahd University for Petroleum and Minerals are estimated at SR 681,522,000. 12- The revenues and expenditures of Imam Mohammed bin Saud Islamic University are estimated at SR 1,223,226,000. 13-The revenues and expenditures of the Islamic University are estimated at SR 317,580,000. 14- The revenues and expenditures of King Faisal University are estimated at SR 994,243,000. 15- The revenues and expenditures of Umm Al-Qura University are estimated at SR 754,372,000. 16- The revenues and expenditures of King Khalid University are estimated at 599,869,000. 17- The revenues and expenditures of Taibah University are estimated at SR 257,632,000. 18- The revenues and expenditures of Qasim University are estimated at SR 378,228,000. 19- The revenues and expenditures of Taif University are estimated at SR 178,114,000. 20- The revenues and expenditures of the General Organization for Technical Edcuation and Vocational Training are estimated at SR 2,488,533,000. 21- The revenues and expenditures of King Abdulaziz City for Sciences and Technology are estimated at SR 520,635,000. 22- The revenues and expenditures of Geneal Administration Institute are estimated at SR 200,141,000. 23- The revenues and expenditures of Saudi Red Crescent Society are estimated at SR 418,400,000. 24- The revenues and expenditures of the General Organziation for Military Industries are estimated at SR 793,477,000. 25- The revenues and expenditures of Saudi Geological Survey Authority are estimated at SR 117,090,000. 26- The revenues and expenditures of Tourism Higher Aughirty are estimated at SR 157,480,000. 27- The expenditures of the Authority of Telecommunication and Inoformation Technology are estimated at SR 185,000,000. 28- The revenues and expenditures of the General Authoirty of Food and Medicine are estimated at SR 68,300,000. 29- The revenues and expenditures of Suadi Post Organization are estimated at SR 968,280,000. The following is the outcome of the fiscal year 1424/1425 (2004), the highlights of the new budget for the fiscal year 1425/1426 (2005), and the recent economic developments, according to a Press Release issued by Ministry of Finance. The Outcome for Fiscal Year 1424/1425 (2004). The Ministry of Finance projects revenues to reach SR (393) billion in 2004, while expenditure amounts to SR (295) billion; there were increases in some emergency expenditures as well as settlement of payments to farmers. Also, an amount of SR (41) billion for development projects amounting to SR (30) billion, and to increase the capital of the Saudi Credit Bank by SR (2) billion and the capital of the Saudi Real Estate Fund by SR (9) billion. The remaining revenues will be allocated to settle part of the public debt Preliminary estimates indicate that public debt is expected to drop from its level of SR (660) billion at the beginning of the year to around SR (614) billion at the end of fiscal year 1424/1425 (2004). The National Budget for 1425/1426(2005). This year's budget continued the government focus on optimizing the available resources and give priority to social infrastructure and services especially in education, health, social affairs, municipal services, water and sewage, and roads. Moreover, the budget put special emphasis on capital expenditures that will create more job opportunities and enhance economic activities, and boost economic growth. The following are the main features of the 2005 budget: 1. Total revenues for the fiscal year 2005 are projected at SR (280) billion. 2. Government expenditure for the fiscal year 2005 is budgeted at SR (280) billion. Total cost of new projects in the budget amounted to SR (75.5) billion. Appropriations: Appropriations for the main development and public service sectors for 1425/1426 (2005) are as follows: 1. Education and manpower development: a. Expenditure amounts to SR (70.1) billion including technical and vocational training. b. New projects total SR (14.7) billion. c. New projects include (1420) new schools (in addition to 2260 schools currently under construction), rehabilitation of (2000) existing school buildings, (22) university colleges, (4) university hospitals, completing infrastructure of some universities. In the technical and vocational training sector, the new budget include (10) new technical colleges, (32) vocational training centers, (19) other technical and training buildings, opening of (5) new technical colleges and (11) vocational training centers. 2. Health and social Affairs: a. Expenditure amounts to SR (27.1) billion. b. New projects total SR (4.6) billion. c. New projects include (420) primary care centers, (23) hospitals with a capacity of (3150) bed, expansion and development of existing health facilities, and furnishing newly completed hospitals. Meanwhile, there are (62) hospitals under construction which will add (7000) bed. 3. Municipality services: a. Expenditure amounts to SR (10.7) billion. b. New projects total SR (7.2) billion. c. New projects include roads in cities and towns, intersection and bridges, road lights, and cleaning-related projects. 4. Transportation and telecommunication: a. Expenditure amounts to SR (8.9) billion b. New projects total SR (8.4) billion c. New projects include roads totaling (6700) km ( there are (10600) km of roads currently under construction ), ports, airports, and railroads development, first phase development of King Abdulaziz Airport in Jeddah, and new postal services. 5. Water, Agriculture, and Infrastructure Sector: a. Expenditure amounts to SR (19.2) billion. b. New projects total SR (19.1) billion. c. New projects include water, sewage, and desalination projects amounting to SR (17.2) billion. In addition the budget includes projects in the two industrial cities of Jubail and Yanbu, agricultural projects, and flour mill projects. 6. Specialized Credit Development Institutions and Government financing programs: As mentioned earlier, there will be an increase in the capital of Saudi Credit Bank and the Real Estate Development Fund to enable the two institutions to increase there lending programs. In addition, the other Specialized Development Institutions will continue to provide credits to projects and services in the areas of industry, agriculture, and major infrastructure projects. These credits are projected to be over SR (10) billion in year 2005. Also, the new budget includes appropriations for lending programs of private universities, colleges, and schools. Economic Developments in 2004: 1- Gross Domestic Product: GDP is estimated to grow in 2004 by (16.9) percent in current prices (5.3) percent in constant prices), reaching SR (931.8) billion. One of the major factors contributing to this growth is the increase in oil prices as well as the quantities produced. As a result, the oil sector is expected to grow by (28.2) percent in current prices. Private sector GDP is estimated to grow by (6.7) percent in current prices and by (5.7) percent in constant prices. In particular and in real terms the non-oil industrial sector is estimated to grow by (6.4) percent, construction sector by (7.5) percent, electricity, gas, and water sector by (4.5) percent, and transport, communication sector by (7.8) percent, and wholesale, retail, restaurants, and hotels by (4.9) in constant prices. 2 - General Price Level: Inflation, as measured by the cost of living index, is estimated to have increased by (0.2) percent in 2004, while the non-oil GDP deflator has shown a small increase of (1) percent. 3 - Balance of Payments According to SAMA preliminary data, current account is estimated to record a surplus amounting to SR (193.2) billion in 2004 compared to (105.2) billion in 2003. Non-oil exports are estimated to grow by (23.8) percent in 2004 totaling SR (51) billion, representing (11.3) percent of total exports. 4 - Money and Banking The government fiscal financial and monetary policies continue to be guided by the objective of maintaining stability in price level and exchange rate. The broad money supply during the first ten months of 2004 grew by (9.6) percent compared to (4.2) percent in the same period of the pervious year. With regard to banking sector, Bank deposits recorded a growth of (10.1) percent during the first ten months of 2004, total banks claims on public and private sectors increased by (26.3) percent ; also their capital and reserves increased by (12.9) percent reaching SR (53.1) billion. 5 - Other Developments A number of factors and developments have enhanced the confidence of the private sector leading to its robust growth. These include: a. The implementation of the capital market law after the appointment of the market authority board in July 2004. Its first operation was the approval of offering part of the shares of telecommunication Company (Ithad Itisalat), and (70) percent of the shares of the National Company for Cooperative Insurance will be sold to public before the end of the year. b. The (A+) long-term local currency and (A) long-term foreign currency sovereign credit rating assigned to the Kingdom by Standard & Poor's for the second year in a row. c. The (A) sovereign credit rating assigned to the Kingdom by Fitch in 2004. d. The stock market index continued to increase during 2004 closing at almost (7900) on 6/12/2004 compared to (4400) at the beginning of the year. e. New fiscal, institutional, and structural reforms have been introduced in 2004 such as the new corporate tax law, mining code, and the by-laws of natural gas pricing, the by-laws of the program for loan guarantees of small and medium enterprises (SME's), and the by-laws of private sector participation in electronic government activities. f. Active participation of the private sector in the government procurement with the total number of government contracts signed with the private sector in 2004 amounted to (2850) contract with a value around SR (38) billion. |
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