5 – 11 Mar 2015

Two controversial issues dominated parliamentary discussion during the weekly session on 10 March. First, was a proposed parliamentary bill for imposing a ceiling on levels of public sector debt; the second was a Government bill for privatizing the monitoring of pearl and precious stones, as part of the project for making Bahrain an international centre for the pearling industry.

 

A ceiling on public debt

 

A draft bill has been in circulation since the previous Parliament seeking to impose a ceiling on levels of public sector debt. Originally MPs had proposed limiting debt levels to 40% of GDP. However, a Shura Council amendment proposed an increase to 60%. The various drafts are currently being discussed by Parliament.

 

During the session, Head of the Finance Committee, Isa al-Kooheji, said that Government debt levels stood at 5.6bn BD – 45.3% of GDP. Al-Kooheji warned that subsequent generations would have to cope with the implications of increasing levels of debt. Numerous other MPs also spoke, warning of the need to impose limits on debt levels.

 

However, MP Adel Al-Asoumi called on his parliamentary colleagues to “pause” before passing a draft bill placing a ceiling on public debt. Al-Asoumi said that “limiting public debt could affect security, defenceand standards of living. Don’t give the Finance Ministry the pretense for reducing projects”.

 

MP Ahmed Qaratah warned that rising levels of public debt could force Bahrain out of the GCC currency union. Qaratah demanded a 2015-16 Budget that didn’t run a deficit. The Finance Minister sarcastically responded that he looked forward to receiving the draft of Qaratah’s own budget.

 

Following the vote over whether to refer this bill back to the Finance Committee for further consideration; there was a dispute between Adel al-Asoumi and Isa al-Kooheji after a mechanical fault in the voting system led Al-Kooheji to demand a re-vote. Al-Asoumi objected, saying that another vote would make no difference to the majority decision to send the draft public debt bill back to the Finance Committee. The Head of Parliament overruled him and demanded a second vote during the next week’s session.

 

Monitoring Bahraini pearls

 

Another divisive issue in Parliament this week was an “urgent” bill brought by the Ministry of Industry for privatizing the monitoring of pearls and precious stones. This comes as part of the Government’s aspiration to turn Bahrain into a world centre for natural pearls.

 

MPs Isa al-Kooheji and Ali al-Aradi spoke of the benefits of opening up this role to the private sector. However, Abdulrahman Bu-Ali led the charge against the proposals; claiming that many deputies supporting the bill were simply trying to “satisfy the Government” and MPs shouldn’t buy into the story being “spun” to them by ministers.

 

Bu-Ali said: “We have an internationally recognized laboratory. I consider that this bill amounts to handing the tools of oversight over to foreigners”. Several MPs stood up and stated their support for Bu-Ali’s comments.

 

MP Majid al-Majid said that his Legal Committee had seen no need for an “urgent” marking for this draft bill. He added: “Most ministers say that they desire to cultivate skills when they want to pass a particular bill and they give us promises. But when a Bahraini submits himself, they demand that he have skills. Where will this Bahraini get his skills from if a particular entity doesn’t incubate and nurture those skills?”

 

Adel al-Asoumi and others also questioned why the draft bill had been marked as urgent, and urged MPs to reject it, considering that Bahrainis held the necessary skills to conduct this work. In the end, Parliament failed to collect the required majority of opposing votes (21) despite only seven MPs voting in favour and eight MPs abstaining. 15 MPs voted against the bill.

Reducing Government privileges

 

The Shura Council have voted in agreement with proposed amendments by the Parliament for reducing retirement privileges of ministers. The amendments place a ceiling on the maximum ministers can receive in their pensions, as well as banning those who have served for less than a year from being entitled to these benefits.

 

400 million BD wasted?

 

Mohammed al-Ahmed, member of the Parliament Finance Committee, caused a media storm this week when he claimed that the Financial Audit Bureau report revealed the wastage of 400 million BD of public money (just over $1bn).

 

MPs are finalizing their review of this annual audit report and many deputies have stressed their determination to take action against corruption cases and refer those found in violation to the Public Prosecutor.

 

The Government pledged to take urgent action to address violations raised in the report, but rejected Al-Ahmed’s claim that this was “squandered public money”, saying that many of the violations cited were “procedural” rather than cases of outright wastage or criminality.

 

Interview with Head of the Parliamentary Finance Committee

 

On 8 March Isa al-Kooheji gave an interview to Al-Watan newspaper, during which he sharply criticized the Government’s management of public funds. Here are some of the key quotes:

 

Annual Budget

 

“The [Parliamentary Finance] Committee’s handling of the Budget issue will be different this year. The Committee will seek to benefit from its assembled expertise and previous reports, as well as engaging with economic entities and trade personalities… there will be a series of consultative meetings with the Government team concerned with the Budget to arrive at a consensus vision… the parliamentary committee will be particularly concerned with efforts to increase diversification of government revenues; better-targeting spending; and addressing government debt.”

 

Governance of public funds

 

“I must stress the importance of efforts to increase productivity and to counter administrative and financial corruption… this can play a role in diverting more funds to the Public Budget and reducing the national debt”.

 

“I am astonished by illogical behaviour from the Financial Ministry in hiding problems and challenges… The budget deficit, limited revenues and reduced oil prices can never be a hook for the Government to hang its mistakes on, allowing it to stop, refuse or delay the implementation of projects affecting levels of Government support to citizens”.

 

Al-Kooheji criticized the heavily subsidized provision of gas to large national companies like Alba, which obscured their actual profits when set against the cost to the nation.

 

Housing & infrastructure

 

“The housing file is the most significant priority during the current phase as requests for housing provision mount up… along with the importance of infrastructure projects and enhancing the role of GCC aid.”

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