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UAE cabinet clears balanced budget

While making this historical announcement, the Ministry of Finance and Industry Affairs has directed the government Ministries, federal autonomous bodies and agencies to carry-out studies to work out the possibilities of outsourcing certain services, projects and activities to the private sector as a cost cutting and austerity drive.

One of the important features of the 2005 budget is that government has not revised any fees, charges or any other levies while on the other hand it has allocated generous budgetary allocations to the healthcare, education Social welfare, infrastructure sector which is being termed as the philosophy of the budget as well as the top priorities of the government. According to Dr. Mohammed Khalfan bin Kharbash, Minister of State for Financial and Industrial Affairs said there has been substantial increase in the size of budget this year comparing with last year as allocations have been raised to previous year's actual expenditures.

During the year 2004, a budgetary deficit of Dh2.160 billion was emerged which the government managed to off-set by taking effective austerity measures, bringing more efficiency in executing development by focusing on performance budgeting.

The allocations earmarked for various services i-e secondary and higher education along with allocations for UAE students studying abroad has been increased by 60 percent, which has led to increase in the number of students studying abroad From 757 students in 2004 to 1254 in 2005.

The number of schools in the budget reached 1106, imparting education to 432,459 students.

For the Health sector allocations for the expansions projects in various emirates in the UAE increased as number of hospitals rose to 16 while it operates 80 clinics offering 444 new beds.

The budget has allocated sufficient sums for the completion of permanent projects or on going schemes which are listed in the budget.

Mr. Kharbash said that the MoFI greed with 36 other ministries and federal authorities and agencies to execute the performance budget, by an increase of 7 new federal bodies.

He said that there was a close coordination among the ministries to develop the medium and long term strategic plan for the ministries and other bodies for their financial requirements in next three years.

The Finance Minister said that allocations will be provided to programmes and initiatives that directly impact the welfare of UAE nationals and their basic needs like education, healthcare, housing, social welfare, electricity and water generation, civil defence and national security.

The Ministry recommendations included approval of the Federal Law project pertaining to the linking of the Federal General Budget to the budgets of independent bodies for the fiscal year 2005.

The ministries and federal autonomous bodies have been urged to adhere to the rules and procedures set out by the Ministry of Finance and Industry for the early completion of the Financial System Development project in the UAE.

Those bodies were also urged to minimise their expenditures and to estimate their future budgets keeping in view the budgetary constraints to avoid any deficits.

MOFI has asked the government departments to focus on revenue generation to manage their expenditures and contribute 20 percent of that revenue increases to finance the Ministry’s programme.

It asked for concentrating on the major programmes assigned to them and to study the possibility of delegating secondary projects to the private sector.

Mr. Kharbash explained that the said recommendations were with the objective of supporting emiratisation by forging a mechanism which could enable those bodies to appoint university, institutes graduates from UAE nationals.