Reform Of Public Finances Subject To Privatization

In a recent government study, the authors concluded that the state must restructure its public finances through privatization as soon as possible, in order to stop the deterioration of public finances, improve macroeconomic performance, improve the quality of education and health care services, and develop real development companies that will reinforce public trust in government and increase revenue.

It has been reported in a local Arabic daily that after a tangible part of the privatization projects have been implemented and to create financial sustainability, the general budget foundations will be altered as follows.

1 – Setting a top limit of 5% of all expenditures for the budget deficit

2 – Excess revenues, if any, shall be divided as follows – 20% for a fund for the future generations, 40% for the general reserves fund, and 40% for distribution among citizens 21 and older

3 – In the event of an exceeding deficit (health insurance premiums, education premiums), the state's share will be reduced to ensure it remains below the specified threshold.

4 – Improving the demographic structure of the country by reducing the use of foreign labor to the lowest levels possible.

Due to successive changes in the composition of the Council of Ministers, the previous development recommendations did not reach implementation, while the government's development efforts were primarily focused on major construction projects that failed to achieve development goals but instead strained the government and promoted corruption. A growing budget deficit, as well as the requirement to borrow externally.

In the study, it was emphasized that a general privatization program should be implemented immediately and that an executive committee be formed that would formulate executive proposals for amending the privatization law as well as a broad plan from which detailed plans could be developed for each sector. Among the goals of the public privatization project are:

1 – Diversifying income sources and reducing the reliance on oil

2 – Improving public service productivity, especially in the education and health sectors

3 – By establishing strong national companies that can grow locally and regionally, deterring capital migration through attractive investment opportunities for citizens.

4 – Creating a more equitable distribution of the economy's output between citizens

5 – Improving the capabilities of the government apparatus to fulfill its sovereign duties by reducing current burdens

6 – Strengthening the government-council relationship and reducing political tensions

7 – Creating productive jobs for citizens and limiting the importation of foreign labor.

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