Debt repayment plan

A LONG-TERM plan to repay outstanding public debt that stood at BD13 billion by the end of last year is set to be drawn up by the government and legislators, it has emerged.

The debt is expected to reach BD15bn by the end of next year with the ceiling increased by BD2bn through a royal decree allowing the government to borrow more this year and the next.

Interest on government debt is expected to be around BD757 million this year and drop to BD708m next year.

The statistics were revealed through three presentations as Shura Council chairman Ali Saleh Al Saleh yesterday headed an extraordinary meeting of the financial and economic affairs committee on the 2021-2022 national budget.

“His Majesty King Hamad and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince Prime Minister, are keen that people’s benefits are not touched and a balance is maintained despite the difficult global circumstances,” said Mr Al Saleh.

“The agreements between legislators and the government on the state budget comes with a drop in oil prices and Covid-19 sweeping the world,” he added.

“The challenges vary between health, economic and social and the BD4.3bn package and other smaller packages achieved success in ensuring stability.”

Committee chairman Khalid Al Maskati said the budget was centred on progress, without public welfare being affected.

“There were two options: Reduce public welfare and stall progress, or borrow,” he said.

“The only option was to borrow without sacrificing public welfare or growth.

“Is debt alarming? Yes. Is the interest on loans alarming? Yes. Is it an intriguing issue? Certainly.

“As legislators we will draw up a long-term plan with the government as the Fiscal Balancing Programme is achieved by the end of next year.”

Mr Al Maskati said the bigger concern now was health, education and housing projects.

“The government’s commitments will be fulfilled in all aspects,” he said.

The three presentations were made by committee vice-chairman Redha Faraj, and members Bassam Albinmohammed and Yasser Humaidan.

The Parliament financial and economic affairs committee also held a separate meeting on the budget.

Committee chairman Mahmood Al Bahrani said the government had no other option but to borrow.

“There will come a point when we will address the matter of borrowing and interest,” he said.

“But people have to realise that borrowing was the only option or else it would have been cuts in public welfare or more taxes.

“The situation forced legislators and the government to think now, with the evidence being that the Covid-19 crisis has not hit us as badly with life continuing without disruption.”

He added that the budget would be presented for MPs to vote on during Parliament’s weekly session on March 2.

“We just need written guarantees that the government wouldn’t turn around if things start going wrong and starts digging into people’s pockets before we vote yes.”

Source: https://www.gdnonline.com/Details/936275/Debt-repayment-plan