Bahrain to cut subsidies for expats
Interesting .....
Citizens will receive cash payments from state to offset price rises when subsidies are removed
Bahrain will begin cutting subsidies for goods and services to reduce state spending on its foreign population, a top official said.
Bahraini citizens will receive cash payments from the state to offset price rises when subsidies are removed, said Minister of State for Information Affairs Isa bin Abdulrahman al-Hammadi. Foreign citizens would not receive such payments.
"The majority of beneficiaries from subsidy of consumer goods and services are foreign nationals resident in the kingdom and companies but not individual Bahraini citizens," the official Bahrain News Agency quoted him as saying late on Monday.
The government will therefore redirect subsidy policies to benefit local citizens only, Hammadi said.
Like other oil exporting countries in the six-member Gulf Cooperation Council, Bahrain employs many foreign workers; about half of its population of roughly 1.3 million is estimated to be expatriate. They benefit from state subsidies which keep down prices of fuel, meat, electricity, water and other items.
Earlier this month the Bahraini cabinet approved a draft budget which envisaged the budget deficit climbing to 1.47 billion dinars ($3.90 billion) this year and 1.56 billion dinars next year, from an originally planned 914 million dinars last year.
The government will have to borrow to bridge its budget gap, so "now the government borrows to support citizens only," Hammadi was quoted as saying.
He did not give a specific timetable for subsidy cuts or say how big they might be. The subsidy for meat, which costs 47 million dinars, may be the first to be removed, but it is small compared to electricity and water subsidies, he said.
Subsidy cuts could push up consumer prices in Bahrain and put upward pressure on foreign workers' wages, potentially hurting companies' competitiveness. Hammadi said the new policy would take into account the issue of competitiveness.
Seems unworkable to me – What say you ?
Brit: Usually, this is how it all begins. First, one GCC country takes the step and if they succeed, others follow. It happened several years back when the UAE started a process of granting a grace period to all illegal foreign workers to leave the country warning even the people housing them of penalties and jail terms should any one get caught after the grace period expires. Thousands left. When Saudi Arabia saw the effects of this action, they too went ahead and took this step. A person in my neighbourhood I know who was staying illegally in the Kingdom for 14 years, also fled.
Could this be a model to be used elsewhere in the GCC?
I personaly don't believe it is well thought through or workable
Yes , Just increase the price of petrol & coca cola .............. ......... expats will start shedding Dinars .......... ...........................
Yes , Just increase the price of petrol & coca cola .............. ......... expats will start shedding Dinars .......... ...........................
It was expected to happen. No government can pay for the needs of their citizens forever if their sole income rests on volatile (and limited) commodities and corrupt banking. But Bahrain is becoming unattractive to foreigners. Maybe this will happen to the other GCC states too, sooner or later.
MM: But is it workable ?
Will it drive out expats
We are with them through thick or thin .................. Long Live ........... Bahrain ........ ....