Public budget allocation unfair, says study [Archives:2008/1209/Front Page]

November 20 2008

By: Khaled Al-Hilaly
SANA'A, Nov 18 ) A delegation from Civil Society Organizations Network for Development held a meeting with the Parliament's Budget Committee and presented a study entitled The Equitable Distribution of Expenditures in the Public Budget from a Social Perspective.

The analytical study examined the final accounting report for 2007, draft budget plan for 2009 and the distribution of expenditures in the public budget from a social perspective. It was prepared by Dr. Mohammad Ali Jubran Professor of Accounting Sana'a University for the Civil Society Organizations Network for Development.

The study indicated that a substantial amount of the state budget was channeled towards governmental central offices at the expense of local authorities.

In both the final accounting report for 2007 and budget plan for 2009, the study showed centralization in spending. General expenditure for governmental central offices for 2007 was 85.4 percent, while for the governorates it was only 14.6 percent. In the 2009 budget plan, 83.4 percent of the budget was allocated to central authorities, while 16.6 percent was allocated to local authorities. This contradicts both the country's approach of decentralization and goes against the international standards of distributing expenditure between central authorities and local ones.

The study pointed to a decrease in government expenditure on social services like education, health and social security.

It described spending on education in 2007 as “very low” and as having decreased compared to previous years. Although money spent on education in 2005 and 2006 was 17 percent of public expenditure, it was only 14.3 percent in 2007. Accordingly, this has reduced Yemen's ability to achieve the education-related Millennium Development Goals (MDGs) by 2015.

The health sector received over five percent of the general expenditure in 2005 and 2006, but only 3.15 percent in 2007. The budget plan 2009 allocates 5.7 percent of the general expenditure to health services.

From the general expenditure in 2007, 1.1 percent was allocated for water, the environment and sewage treatment. According to the study, this means that the government doesn't deal with the vital issue of water seriously enough as most of this 1.1 percent goes to the cities at the expense of rural areas.

According to the study, the proportion of total public expenditure allocated to social security in 2007 was 1.16 percent. The study quoted a United Nations Development Program report on a 2006 survey on household budgets in Yemen to explain that not only is the portion of the budget allocated to social security minimal, but that it doesn't help those in need. The UNDP report showed that only 14 percent of social security had reached those most in need.

The study further described the expenditure of the Social Fund for Development (SFD) as “useless” since most of the money is spent on purchasing furniture, vehicles and equipment. The fund only spent 3.54 percent of its budget on construction projects.

The study denied the existence of “fair standards” in the distribution of financial support among the provinces and said that, even if they existed, they were not applied.

“Additional budget allocations hinder the balance of state spending, and the study recommends revising the practice,” the study noted.

To achieve equitable development, the study recommended the government allocate sufficient funds to achieve the UN's MDGs by increasing the share of social expenditure.

It also called for the reduction of the costs of scholarships abroad, the re-consideration of the SFD and the equitable distribution of education and health expenditure according to population density. It further stressed the need to reduce centralized expenditure through the adoption of clear scientific criteria to fairly allocate financial resources in the provinces, and recommended that the center grant of adequate financial support to local councils, especially in rural areas.

Members of Parliament welcomed the delegation and promised to take the study's primary recommendations into consideration as well as recommend them to the government.