Government Budget for the year 2000 Is it real or is it an illusion? [Archives:1999/48/Business & Economy]
November 29 1999
Member of Parliament (Islah Caucus)
On Monday , November 22, 1999 the parliament voted on the year 2000 budget. 139 members voted for the budget, 25 voted against, and 30 abstained from voting (so they would be able to express the reasons for refusal) while 76 MPs were absent. However, only 28 members did not exercise their rights to vote. The preceding numbers indicate that opposition parties blocs (Islah, Baath, Naserites and Independents) have rejected the budget. Besides, the ratio of those who voted from the ruling party is 61% and this means that even members of the ruling party refuse to follow the dark tunnel the government is putting the country in by means of its economic policy. Now, many citizens wonder why opposition parliamentary blocs rejected the budget and whether this opposition was for the sake of opposition itself? The opposition’s stand of the parliamentary blocs sort of offered advice to the government for economic policies. This is what made the people in charge in these blocs do their best through accomplishing a careful, specialized and objective study of the budget.
Then, they submitted it in a paper to the chairman of the budget committee who in turn did not even bother mentioning the efforts made to present the committee’s report to parliament. Now, let us zoom into the negativities of this budget which the government claims is ‘modernized.’ We do not deny that the government presented its budget by reading the current statement for the year 2000 as scheduled according to the constitution and this is positive. Another thing is that the government made a new classification which is, “a current budget which includes the first section and five chapters, investment and capital budget which includes the second section and four chapters, funding budget which includes third and fourth sections and contains six chapters.”
Although the government states that this classification enhances the flow of information for researchers, we find the year 2000 budget just like the former ones. It still lacks in clarity and transparency and is shrouded by mystery. The year 2000 budget is an expenditures’ budget, thus, it is a budget for wages, salaries and other current expenditures. The government has allocated 76% of current spending out of the total amount of public expenditures. I wish that the allocations for the first section concerning wages, salaries and new jobs are implemented in order to reduce unemployment. Now jobs have become delayed and stumbled just like investment projects.
The government presented this year’s budget without specifying clear indexes to rationalize the current expenditures especially of ministries’ bureaus and diplomatic corps except for costs and taxes on those of limited income which would, of course, increase their pain and poverty. What’s more, the government will lift subsidies on oil products especially diesel which is expected to rise from 10 Riyals/ liter to 17 Riyals/liter. The year 2000 budget also shows that it will depend mainly on oil revenues which represent 63.4% of the total revenues that are reflected directly in expenditures. We know that the oil wealth belongs to us and to our generations. It also runs out and is non-renewable.
Therefore, the government should use part of it in expenditures and the other in investments so all generations can benefit from this wealth. What is even stranger, is that the government presents umbrageous and phony figures of the government’s share of crude oil. For example, while confirmed information stated that government’s share is 92 billion barrels every year, the government registered 85 billion barrels only in the year 2000 revenues. As for revenues of the remaining 7 billion barrels, we do not know where will they go. What makes thing worse, is that the government set the price of each oil barrel at $17 although international energy agencies affirmed the increasing demand on oil and this shows that oil prices would not decrease. So, it would have been wise of the government to set the price of each barrel at at least $21. Strangely enough is that the government set the exchange price of the Yemeni Riyal against the dollar at 150 Riyals to delude people that the price of the dollar will recede against the riyal and this, of course, makes huge differences that may reach billions.
This makes us even more certain of the fallacy of this budget and that the government is not serious in maintaining an entire administrative and financial reform. If the government was serious, the revenue resources would have varied and it would have reformed the customs and taxes receptacles and improved expenditures in investment fields in the fishing sector which leaves our fortunes wasted and ruined without a controller or an auditor.
Central reliability is still present in the year 2000 budget or as some may call it (budget’s veto) and it represents over 30%. Although the government stated that it is looking for administrative and financial decentralization and founding a local authority which has all power, the central reliability still prevails over the budget. It is just like a budget inside a budget (a bag inside another bag). Moreover, the year 2000 budget did not point out to the yields of privatization and their spending especially that the government has sold or rented many enterprises in southern and eastern regions with low prices leaving a number of workers unemployed. Although these prices were low, the government still did not present them in the budget. It also did not specify the special fund of privatization revenues after the release of the law which would be an organized swindling supported by law.
Regarding the social security net which the government considers the alternative in supporting the poor as a result of liberalizing prices, though the amount allocated was scanty and does not exceed YR7.7 billion, families do not receive more than $12 monthly. Even these amounts are not fairly distributed. They are still prevailed by the narrow factional characteristics in order to win loyalty for Sheikhs, high personalities or the ruling party. Concerning treasury bonds, the government renders extravagant profits of 20% which is a rate not even found in wealthy countries. This made burdens of the internal public debt (interests of treasury bonds) reach 37 billion YR aside from external debts which reached YR10,799,000,000. These debts have become burdens on our economy which citizens and coming generations have to bear. It also brings about commercial stagnation, increased unemployment and low investment levels because of the absence of a safe, independent and fair economy.
As for investment projects that were present in the year 2000 budget, they do not exceed 20% of total expenditures. This indicates that this budget is an expenditure budget and is not in favor of development. The allocated amounts for them would not even be enough for delayed and floundered projects which the citizens were several times promised would be finished by the people in charge when they laid the foundation stones.
All these negativities and defects made parliamentary blocs reject this budget including some of the members of the ruling party. So, will the government learn from this lesson? Will it take citizens out of this economic crisis? And do the members of the parliament mean that it is has become necessary to amend the constitution in order that the parliament retrieves its ripped off right that it can not amend the budget without government’s permission and that it can either vote for it section by section or reject it all.
Finally, will everybody realize that this budget is unreal and that we have to stand and take this country out of its crisis? We are waiting.
PGC Caucus
The state budget was studied before a committee in the parliament and that committee has given this subject its complete attention. It discussed it with the government, addressed questions about it and listened to government’s replies to them. Opposition members participated in the discussions, in drafting the report and addressed questions. What is mentioned in their statement is nothing more than reiteration of what they have previously said. They continually live in illusions and jump over reality. They do not realize that the economic, financial and monetary conditions are not a qat-sitting policy, or party clowning, or merely a process of theorizing. We are convinced that implementing the recommendations presented by the committee’s report should be the main basis that parliament must follow and that government should adhere to them without any digression. However, if there were any flaws, we would stand up to their correction. You must not forget that we cooperated with two parties, who signed this statement, in forming the government over a period of seven years.
They assumed ministerial posts and we have never heard from them or seen the implementation of their so-called positive policies which they present to people in the form of exemplary models. We are not surprised that the opposition abstained form voting for the budget because that is what they have been disposed by nature for. They would vote against anything presented by the government because they consider opposition as being the absolute rejection of all that comes from the government. For example, the opposition has never voted on the budget in the last few years. As for saying that some members were compelled to vote, that is a logic which utterly contradicts reality and anybody who follows the discussions of the parliament can see the untruthfulness of such allegations. Members of parliament are not subject to guardianship and those who speak of certain coercion practiced on some parliament members, are in fact describing this establishment with improper adjectives. It seems that members of the opposition work according to continuous party instructions. They dare not make decisions on their own or even have a slight room of freedom, therefore, they suppose this is the case with everyone else.
Finally, I hope that propositions put forward by the oppositi0on will be characterized by reality and that they will be capable of bearing their responsibilities so that we can cooperate. We always back up positive opinions.
We call on the opposition to join hands and to weigh the positive stance free from party squabbles and bidding.
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