UAE US$700b spending on track posted on 30/12/2014
A relatively low fiscal and external current account break-even price of oil and ample foreign assets will enable the UAE to press ahead with an estimated US$700 billion worth of infrastructure projects expected to come on stream over the next 15 years, spurring credit growth in the banking sector, the Institute of International Finance, or IIF, said.
The UAE's nominal gross domestic product, or GDP, is poised to touch US$435 billion in 2016, up from US$417 billion in 2014 and US$405 billion in 2015 under a predicted baseline oil price scenario of US$78 and US$85 per barrel respectively in 2015 and 2016, the global association of leading financial institutions said in a report.
With the economic growth set to hover between 4.8 per cent and 5.1 per cent in the next two years, the UAE will post a current account balance of US$29.9 billion and US$30.2 billion respectively in 2015 and 2016, accounting for 7.4 per cent and 6.9 per cent of the GDP.
In such a scenario, the Emirates will record a fiscal balance of 1.8 per cent and 2.8 per cent of the GDP respectively in 2015 and 2016, said Dr Garbis Iradian, Deputy Director, IIF. The coming years will also see the country's public foreign assets swelling from US$573 billion in 2014 to US$615 billion in 2015 and US$652 billion in 2016. The government debt will register an increase to 22.1 per cent and 23.3 per cent of the GDP respectively in 2015 and 2016.
"The UAE looks resilient vis-á-vis the drop in oil prices, given a relatively diversified economy, excellent infrastructure, a more transparent and better regulated banking system, political stability, and ample foreign assets. Monetary and fiscal policies are expected to remain broadly accommodative,” said the report.
The IFF said under its baseline scenario, the consolidated fiscal balance will remain in small surplus through 2016 given the UAE's relatively low break-even price of oil (fiscal breakeven price of US$74/bbl and external current account breakeven price of about US$60/bbl in 2014) and the recent sharp increase in the power and water tariffs (targeting also nationals for the first time) which will lead to lower current public spending (subsidies and transfers are projected to be reduced from 3.7 per cent of GDP in 2013 to 2.2 per cent in 2015).
The report said while real non-oil GDP growth would remain strong at 4.8 per cent in 2015 a relatively low fiscal and external current account break-even prices of oil and ample foreign assets would enable the UAE to maintain its high level of spending on infrastructure and major projects and this will support growth in credit by banks.
"About US$700 billion worth of infrastructure projects are expected to be implemented over the next 15 years. Abu Dhabi is expected to continue to make significant investment in the oil and gas industries (which represents about 20 per cent of total planned public investment). The completion of major projects (including Dubai Metro and Al Maktoum International airport in Jebel Ali) and the preparations to host the World Expo 2020 should keep growth in Dubai around five per cent in the coming years,” it said.
According to IIF, the UAE banks are amply capitalised, liquid, provisioned and with stable profits, reflecting prudent regulation by the central bank in recent years. The dollar peg is fairly secure. Unlike in 2009, there does not appear to have been any withdrawal of deposits from foreign institutions.
"Dubai, as a regional hub, is expected to benefit from the projected increase in world trade, in volume terms, as a result of lower international oil prices which will benefit the global economy, and, in particular, India and other net energy importing countries in Asia. Dubai's main vulnerability is its high debt. The debt service burden would rise in the coming years due to higher principal and rising interest payments due as interest rates in the United States gradually increase,” said the report.
For the GCC as such, the large net foreign assets of the member countries can sustain continued robust government spending, especially on infrastructure, supporting nonoil growth, the IIF said.
"The GCC countries are much better positioned to cope with a slump in oil prices today than they were in the 1980s and 1990s. But the drop in oil prices will reduce hydrocarbon export receipts from a peak of US$743 billion in 2012 to about US$410 billion in 2015, leading to weaker current account positions and substantial pressures on fiscal accounts, including a fiscal deficit of 8.9 per cent of GDP in Saudi Arabia, in the absence of adjustment. Non-oil growth is expected to moderate to 4.7 per cent in 2015 from 5.6 per cent in 2014, driven by growth in government spending, albeit at a slower pace than previous years, and strong nonoil private sector activity,” it said.
"Ample public foreign assets and low debt in most of these countries will mitigate the adverse impact of low oil prices on economic activity and allow continued robust public spending, particularly on infrastructure,” said the report.
However, in light of the strategic decision by major oil producers in Opec (particularly Saudi Arabia, the UAE and Kuwait) to discount prices rather than cut back their own output in the face of surging global supply, GCC oil production is expected to remain flat in 2015.We estimate that, on average, the fiscal breakeven oil price for GCC countries is US$82/bbl for 2014 to balance their budgets,” said the report. – Khaleej Times - http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2014/December/uaebusiness_December362.xml§ion=uaebusiness
Third session of UAE budget touches Dh140 billion up by 15 per cent, says Hamdan bin Rashid posted on 23/02/2014
H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, has announced that the estimated value of the third session of the UAE's budget "2014 - 2016" touches Dh140 billion up by 15 per cent compared with the estimated value of the second session of budget "2011 - 2013", which amounted to Dh122 billion.
He said at a press conference held yesterday that the increase reflects the strength of UAE's economy and its ability to continue growing amid preparedness and ability of the federal government to provide better services to the citizens and residents alike.
Sheikh Hamdan continued, in line with the directives of President His Highness Sheikh Khalifa bin Zayed Al Nahyan and Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Ministry of Finance seeks to continue the allocation of funds to the Ministries and autonomous federal agencies in order to implement the strategy of the federal government.
He added that the federal government strategy aims at achieving more welfare and prosperity for Emiratis through enhancement of government services, boosting of security and safety, development of education, upgrading of healthcare services, provision of housing and sponsoring of special categories in line with the directives of wise leadership to provide decent living conditions for the pensioned civil and military personnel.
Sheikh Hamdan said the general budget for the fiscal year 2014, which is the first year budget in the third session plan of 2014- 2014 budget, stood at about Dh46.2 billion with an increase of Dh1.6 billion compared to the last year, during which the total estimated revenues and expenses were of the same value and without deficit.
He pointed out that the volume of the federal general budget combined for the financial year 2014 stood at Dh52.5 billion. The revenues and expenses include the ministries and federal authorities.
Sheikh Hamdan said that the Ministry of Finance will continue through the fiscal year to receive the applications for additional allocations from all the federal agencies, adding that the ministry will study and analyse these applications and then submit them to the finance and economic committee.
He stressed that the Ministry's procedure is in line with the statement of Sheikh Mohammed bin Rashid Al Maktoum, during his endorsement of the federal budget for the years 2014-2016, when he said, "Will not hesitate to increase when we see a need for it." Regarding the volume of projects of the ministries and federal institutions during this year, he said, "We have to agree first that the UAE has gone far in the development of the basic infrastructure after 42 years of the Union, and we are still progressing to complete the infrastructure projects. The government is embarked on updating and replacing the projects in terms of buildings for ministries, federal institutions, schools, hospitals, health centres and other premises." Sheikh Hamdan said the total cost of the projects to be implemented by the ministries and federal institutions during 2014- 2016 would be Dh23.8 billion, including Dh10.4 billion the cost of the federal ministries, Dh8.2 billion for development projects of electricity and water- to be implemented by the Federal Electricity and Water Authority (FEWA) and Dh5.2 billion for the Zayed Housing Programme projects.
He said Dh1.8 billion has been allocated for the implementation of 11 projects of the Ministry of Health (MoH). The projects cover hospitals, clinics and health centres. He noted that the budget of MoH surged to Dh3.7 billion in 2014 compared to Dh3.4 last year.
On the date of issuance of the state public debt law, the Minister of Finance said that the federal government has a special vision to develop the government bonds market characterised by strong liquidity and able to support the effectiveness of the financial market at the state level, adding that the establishment of a government securities market would be a key tool to find alternative effective sources of funding that provide funding for major infrastructure projects at the lowest possible cost and at acceptable risk levels.
He pointed out that in the absence of an urgent need for the federal government to issue any bonds, the Ministry of Finance will continue to work on studying of all legal aspects of the public debt law in line with the wise guidance of the federal government, which calls always to follow the conservative approach.
About the health insurance law, Sheikh Hamdan said it referred to the Ministry of Presidential Affairs on 3rd June, 2012 to address some issues in this respect. – Emirates News Agency, WAM
UAE budget emphasis on social development hailed posted on 29/10/2013
The UAE Cabinet on Sunday approved the medium term draft federal budget framework for 2014-2016 worth Dh140 billion, with huge emphasis on investments in education, human resources and social development.
In the federal budget of Dh46.6 billion, which is slightly higher than the Dh44.6 billion budget in 2013, the government has allocated Dh23.5 billion (51 per cent) for social development and related projects, once again emphasising the importance of this sector.
"The allocated budget for 2014-2016 will, no doubt, contribute to the development of the education system as well as students across the UAE. This support will be serving the strategic development plan for the education system. Education is the main pillar of human development that we should heavily invest in,” Humaid Mohammad Obaid Al Qattami, UAE Minister of Education, said.
The federal budget accounts for around 10 per cent of the consolidated UAE budget and is allocated mainly towards development and social welfare services at the federal level. The federal government is funded mainly by Abu Dhabi and Dubai.
"Investment in human development is the main achievement that the government should do to improve the educational standard of UAE nationals. This will automatically help in overall economic development,” said Eisa Al Mulla, executive director of the Emirates National Development Programme.
An allocation of 21 per cent of the budget was made for public and higher education, with a total allocation of Dh9.8 billion. A total of Dh6 billion has been allocated for public education and Dh3.8 billion for higher education. The public education allocations will be used to develop the educational standards in schools while the higher education funds will be distributed among national universities for academic and research excellence and training programmes.
Commenting on the government's commitment towards education and human development, Al Mulla said that developing human resources requires the development of a 10-year strategic plan and the UAE authorities have been focusing on human development by launching various initiatives and incentives to achieve this goal.
"We should have a long-term strategy to promote UAE human resources and across all social, educational levels which should be linked directly with the labour market needs. This will be very helpful to eliminate all obstacles and barriers in the face of the country's development,” he said. – Gulf News
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Ministry of Finance issues Financial Circular for the General Federal Budget posted on 07/03/2013
Following the UAE Cabinet's resolution No. (1/181) issued in the 2008, which mandated the ministries and federal entities to prepare the general federal budget on the basis of a three year medium- term plan, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, released financial circular No. (1) of 2013.
The circular pertains to the 2013 budget project of the UAE ministries and federal authorities and set the date of Sunday, May 5, as the next deadline for delivering budget projects, stressing on the necessity of following the principles of zero-based budgeting when preparing the draft budget in addition to adopting the rules and procedures mentioned in the union general budget preparation guide.
Al Tayer emphasised MoF's commitment to providing all documents and data needed by federal entities on the Ministry's website. In addition, he emphasised on the significance of uploading federal entities' programmes on the automated budget system, which in turn will allow these entities to insert its employees' data, activities and services expenses and the cost of strategic goals that these entities hope to attain through the new financial circular plan 2014-2016.
It is worth mentioning that MoF adopted an integrated action plan with specific tasks and with a clear time frame for the modernisation and development of an automated system for the preparation of the budget in line with its new financial circular plan.
This will allow MoF to provide a trail operation for a number of federal entities, in preparation for the development of a business model that is applicable to all federal parties.
Following that the Ministry is organising a series of training courses and workshops for professionals and specialists from various federal entities to train them on using the automated system for the preparation of the budget and methods to best utilise the budget preparation procedures manual. - Emirates News Agency, WAM
UAE to launch School Parliament by September posted on 01/02/2013
Lively, outgoing and daring schoolchildren in the UAE will be given a unique opportunity to bring about the change they want as election campaigns and voting are around the corner for them.
All are too young to vote in the country's parliamentary elections, but thousands of young people will be eligible to elect a 54-member youth parliament made up of primary and secondary school pupils across the country, with all the pomp and ceremony resident in any other parliamentary election process in the world, according to officials from the Federal National Council and the Ministry of Education.
The Ministry of Education will oversee elections at the start of the next school year scheduled for September and results will be announced within the same month, said Kenez Al Abduli, the ministry's student counselling director.
The legislative term is to last one academic year and starts two weeks after the elections, going into recess one month after the school year, Al Abduli said.
"The Ministry of Education will draft an election law including campaigning, election administration, and candidacy and voting rights,” she said.
The country will follow similar experiences of Britain, Scotland and even Europe, which already have such youth or school parliaments established.
Ali Mehad Al Suwaidi, acting undersecretary of the ministry, who inked a memorandom of understanding with FNC Secretary-General Dr Mohammad Al Mazroui, said the school parliament initiative was meant to promote political participation by allowing students to have their say on issues regarding education and the community. "The move underlines the commitment of the UAE and its leadership to further promoting political participation in the UAE,” he said.
The youth parliament electoral pool accounts for nearly 50 per cent of the UAE's Emirati population, while 129,000 or 13 per cent of Emiratis were eligible to vote in and run for the Federal National Council's elections in 2011 as the process of citizen's participation in UAE politics is still in its nascent stages and continues to develop gradually.
Al Suwaidi said the school parliament will provide a platform for exchanging views, fostering values of loyalty to the homeland, promoting community culture and values, encouraging explicit expression of points of view, sharpening skills of thinking, understanding and respect of each other's stances, enriching students' Arabic language and speech-giving skills and nurturing the culture of dialogue among students themselves and between them and officials.
The students would get public debate and dispute-resolution training, he said.
There would be committees on education, culture, media and communications, the environment and sustainable development, youth and sports, scientific research, law, political affairs and international relations, and health and housing. While the full sessions would be held at the FNC building in Abu Dhabi, committees would be able to hold their sessions in other emirates, Dr Al Mazroui said.
The young MP would have the right to demand a public debate and an urgent statement on a specific issue, he said.
Dr Al Mazroui said the FNC would chart by-laws regarding school parliamentary session and deliberation.
The European Youth Parliament has attracted an average 300 young people from 30 countries around Europe, while the UK's parliament, formed in 2000, has 600 members made up of young people aged between 11 and 18, voted in by more than 500,000 of their peers each year. – Gulf News
Dubai unveils Dh34b budget posted on 01/01/2013
Dubai's government has announced its budget for 2013 with more than Dh34.12 billion expenditures and nearly eight per cent increase in public revenue.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Monday approved Dubai's fiscal budget for the year 2013.
The government is able to reduce the budget deficit to record levels keeping the deficit ratio at less than 0.5 per cent of the GDP, the government said in a statement.
The gap in the budget has been reduced by 18 per cent from 2012, where public revenues have been set at Dh32.62 billion.
The Department of Finance director general Abdul Rahman Saleh Al Saleh said there was a possibility of balancing the 2013 budget but it was the government's preference to expand its expenditures in a bid to support the emirate's economy by increasing public spending for the fiscal year 2013 by six per cent over the 2012 budget.
The government said the focus of the budget was on a prudent fiscal policy that provides the stimuli necessary to economic growth.
The government has allocated 26 per cent of 2013 budget for spending on health, education, housing and social development. For Emiratis 1,600 job opportunities will be created in 2013 under the budget proposal. The government has allocated six per cent of public spending to debt servicing.
Major chunk of the revenues is expected to come from government fees that represent 62 per cent of revenues, while customs and taxes on foreign banks would account for 23 per cent.
Net oil revenues witnessed an increase of 11.8 per cent in the fiscal year 2013 owing to higher oil prices. The rise in fees revenue is due to real economic growth and reflects the expected growth rates in the emirate.
Allocations to budget from government investment returns were reduced to allow for increased reinvestment in the Emirate's economic growth.
Spending on infrastructure will fall slightly to 16 per cent of total expenditure because of the completion of a number of large projects, the statement said, adding: "The government remains committed to its announced infrastructure projects which participate in economic growth and stimulate domestic and foreign investments.”
The government has also indicated that it is committed to not using oil revenues to fund infrastructure projects.
The distribution of expenditures by key sectors emphasises this government's commitment to the individual. This is reflected in 26 per cent of government spending being allocated to social development in the areas of healthcare, education, housing and community development.
Furthermore, the Dubai government supports social services through the establishment of Public Benefits Fund to support families, and the establishment of a fund, as directed by Sheikh Mohammed, to support small and medium-sized projects for the youth, with a view to promoting entrepreneurship among them. – Khaleej Times
Sharjah Ruler approves Dh11.6B for the emirate's general budget 2012 posted on 29/12/2011
Supreme Council Member and Ruler of Sharjah HH Sheikh Dr. Sultan Bin Mohammed Al Qasimi has approved a Dh11.6B budget for the local government departments and authorities for the year 2012. Director General of the central Finance Department of Sharjah Walid Al Sayegh said that the budget is drawn up in line with the directives of the Ruler to focus on the welfare of the citizens through the development of infrastructure, housing, social utilities, support for economy, strengthening of educational process, cultural enhancement and provision of the means of comfort. - Emirates News Agency, WAM
Dubai to reduce deficit by 53% posted on 26/12/2011
Dubai will reduce its budget deficit by 53 per cent to Dh1.82 billion next year, with expenditures expected to reach Dh32.25 billion, the government has announced.
The budget for 2012 has a target to generate Dh30.43 billion in revenues, 60 per cent of which, or Dh18.33 billion, will come from government fees and service charges, while customs and tax revenues will fetch Dh6.6 billion, or 22 per cent. Oil revenues are put at Dh3.5 billion, or 11 per cent, while the rest, seven per cent or Dh2 billion, will be sourced from dividends generated by government investment entities.
Emirates airline, a Dubai government entity, paid Dh1.6 billion to the government as a dividend in April this year. About Dh12.58 billion or 40 per cent of government expenditure has been earmarked for salaries and wages of government employees, while operating expenditure has been estimated at Dh11.30 billion, or 35 per cent.
"This constitutes 0.6 per cent of estimated GDP of the emirate of Dubai, which is in line with international financial guidelines that state the gap should not exceed three per cent of GDP. This is further confirmation that the government is continuing to follow a rational expansionary fiscal policy as directed by the Supreme Committee of Fiscal Policy in the emirate," a government statement said.
"Furthermore, a 53 per cent drop in the deficit to Dh1.8 billion from the fiscal year 2011 forecasts, shows the emirate is serious in dealing with the public budget deficit while maintaining the growth and support averages for social, economic sectors and public services."
Abdul Rahman Saleh Al Saleh, Director General of the Department of Finance (DoF), said his government is "gradually" and "in a deliberate plan" pursuing a set of policies that promote financial sustainability, especially now that most infrastructure development expenditures have been completed.
Catalyst for surplus
"These represent a major pillar and a core catalyst for economic growth which will take Dubai's public budget to the surplus stage in the future upon completion of such projects," he said.
Infrastructure, transportation and economic development sectors make up 41 per cent of public expenditure. This includes a number of vital sectors including roads, transport, civil aviation, airports and tourism.
Twenty-nine per cent of total public expenditure is allocated to the social development sector including areas of health care, education, housing and culture.
The budget allocates seven per cent of government expenditure to public services and government excellence sectors, which contain several key bodies including the Department of Finance, the Financial Audit Department, the Land Department, the Customs Department, and others. About 22 per cent of public expenditure was allocated to the security, safety and justice sectors.
"This is a conservative budget and reflects a fiscally prudent policy that the government is pursuing," Giyas Gokkent, chief economist at the National Bank of Abu Dhabi, told Gulf News.
"For Dubai, the government budget was never a problem. It has been the government-related entities that were in trouble," he said. The government investment expenditure is set to reach Dh5.9 billion â€” representing 18 per cent of public expenditure â€” in order to complete infrastructure and developmental projects, laid out in accordance with the plans to effectively contribute to raising economic growth rates and stimulating domestic and foreign investment.
The Department of Finance said the 2012 public budget is based on a set of core principles, namely continuing efforts to raise the efficiency of government spending through increasing productivity and improving economic and social returns.
Abdul Rahman Saleh Al Saleh, director general of the Department of Finance (DoF), said all government establishments succeeded in ensuring the possibility of achieving a current surplus of Dh1 billion. This is a direct result of efforts to rationalise government expenditure and to improve effectiveness, but also as a result of the increased awareness among government departments to improve efficient management of public money.
"Dubai Government's public budget has taken into account ways to ensure social welfare to achieve sustainable growth goals, including the provision of 2,400 job opportunities as well as supporting the social, economic and public service sectors," he said.
The budget also focuses on diversifying public revenue sources, increasing their returns, and developing clear rules for transparency and fiscal discipline whereby all government departments will continue to implement the highest international quality standards, especially in the services sector.
The budget directly applies directives as set by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to focus on a prudent fiscal policy that provides the stimulus necessary for economic growth in the emirate, complete the main infrastructure projects, and chart government expenditure in order to consolidate financial sustainability. â€" Gulf News
Khalifa issues budget decree posted on 14/12/2011
President His Highness Sheikh Khalifa Bin Zayed Al Nahyan has issued a decree with respect to the rules of preparing the public budget and final statement of account.
The decree explains the mechanism of preparing the public budget, which represents the federal government's programme for achieving economic and social development through optimal distribution of resources within the framework of the federal strategy on the expenditures expected to be spent by the federal authorities in coming fiscal year, provided that the budget should be balanced in terms of revenues and expenditures.
According to the decree, which was published in the same issue of the official gazette, independent service federal entities may have an independent budget, provided that they abide by the unified structure of accounts as issued by the Cabinet, submit their budgets to the ministry for approval by the date issued by the minister as per Article 13 thereof.
Under Article 4, the decree stipulates that the Cabinet shall have the right to assign all federal entities to prepare a draft budget for a mid-term plan, the years of which will be determined by the Cabinet, provided that this draft budget will include the estimated revenues and expenditures of each year separately. A decision approving this draft budget will be issued by the Cabinet, provided that any amendments to the budget of this plan will be taken into consideration after being approved by the Cabinet, as per Article 5 thereof.
According to Article 17 thereof, as soon as new capital projects are proposed based on long-term capital spending plans, the federal entities should provide the following: an approved title deed of the land allocated for the project, the feasibility study of the project, the proposed layout of the project, the timeline for carrying out the project, the required amounts for the execution years and all the annual operating costs required after the project has been completed.
Under Article 19 thereof, the Ministry of Public Works has been assigned to prepare a statistical record containing all the data of the current and new federal projects, whether those implemented by the ministry or the federal governments. All federal governments shall have to provide the Ministry of Public Works with all the data as per dedicated forms and the dates specified by the ministry.
Under Articles 21, 22 and 23, the Ministry of Finance shall estimate an amount for special reserves within the public budget to meet the unexpected requirements that are unlisted in the items of the budget. The federal entities shall estimate their revenues which will be studied and approved by the ministry. In case the initial estimated expenditures have exceeded the initial estimated revenues, the ministry shall propose a maximum amount for expenditures which will be approved by the Cabinet.
Under Article 42 thereof, the Ministry of Finance shall have to follow up the financial condition of the state and in case of lower revenues than those estimated in the budget, the case will be discussed by the Cabinet and solutions will be sought for the budget to be balanced.
Under Articles 31, 32 and 33, all the obligations of the federal entities will be recorded in the official currency. The federal entities shall be linked with the public expenditures as per the provisions allocated for them in the annual budget. – The Gulf Today
Al Tayer: 2011 federal budget on schedule posted on 08/05/2011
The UAE federal government is pressing ahead with implementation of this year's budget according the schedule, and could issue sovereign bonds next year if necessary, said Minister of State for Financial Affairs Obaid Humaid Al Tayer.
"The federal government will issue sovereign bonds if that was deemed as necessary, Al Tayer said while addressing a joint press conference with GCC Secretary General Dr Abdul Latif Al Zayani here yesterday.
Al Tayer said the UAE and other GCC countries witnessed no irregular financial flows from the Arab countries facing political turmoil. Asked about the fluctuating oil prices and their impact on the UAE fiscal policies, he said oil prices rose three years after the global financial crisis and consequently, would have little or no effect at all on the inflation rates, expected to remain this year within the 2 percent mark.
Dr Al Zayani said the upcoming GCC consultation summit, scheduled Tuesday in Riyadh, will discuss a number of economic issues, including the customs union and joint development programme. Al Tayer and Al Zayani agreed that a time frame should be defined for implementing the GCC customs union. - Emirates News Agency, WAM
UAE federal spending grows 7% in 10 years posted on 20/09/2010
The UAE's federal expenditure has grown by around seven per cent annually over the past 10 years and the bulk of the increase was after 2005, when oil prices began their rapid rise, according to government data.
Revenues recorded slightly higher growth of around eight per cent and the federal budget has ended without deficit in the past five years in line with plans to issue balanced revenue and spending, the Ministry of Finance's figures showed.
From Dh22.91 billion in fiscal year 1999, federal spending leaped to nearly Dh42.2 billion during 2009, an annual growth rate of seven per cent.
Revenue swelled from about Dh20.43 billion to Dh42.2 billion in the same period, recording an annual rise of nearly eight per cent, the report showed.
Both spending and revenue sharply fluctuated during 1999-2004 before they were balanced in 2005 as part of the Ministry of Finance's stated policy of releasing a deficit-free federal budget.
As a result, the budget recorded a rapid increase after 2005, jumping by around 21.5 per cent annually between that year and 2009, the figures showed.
Analysts said forecast revenue and spending in the federal budget were close to actual levels since the budget is financed through fixed contributions by each UAE emirate, mainly oil producers Abu Dhabi and Dubai.
The report showed the 2009 budget recorded an increase of about 20.9 per cent, rising to Dh42.2 billion from Dh34.9 billion in the previous year.
The Ministry gave no data for 2010 but the federal budget approved by the cabinet a few months ago showed there was a sharp slowdown in spending growth, as it edged up by only 3.3 per cent to Dh43.6 billion.
The slowdown followed a steep decline in the country's oil export earnings in 2009 and the first half of 2010 because of lower crude prices and output. From around US$92 billion in 2008, when oil prices hit a record high average of US$95, the UAE's income plunged below US$50 billion in 2009.
A budget breakdown showed social services and defence and security consumed up more than two thirds of the 2009 budget, receiving nearly 38.3 and 35.8 per cent of the allocations respectively.
Infrastructure projects received about 5.1 per cent while around 1.6 per cent was allocated for economic affairs and 3.1 per cent for foreign affairs.
"A sum of Dh2.1 billion was earmarked for infrastructure projects in 2009, an increase of nearly 24 per cent over the previous fiscal year," the report said.
It showed the total cost of projects listed in the 2009 federal budget grew to around Dh8.69 billion from Dh8.45 billion in the 2008 and Dh6.61 billion in 2007. The value in 2009 was nearly double the project costs of around Dh4.3 billion listed in the 2005 federal budget, the figures showed.
The UAE's federal budget is part of the much larger consolidated financial account (CFA), which better reflects the country's real fiscal position as it includes federal spending and the budget of each emirate.
In 2009, CFA hit a record Dh289 billion despite the fall in oil revenue, far higher than the 2008 spending of around Dh254 billion.
Official data showed actual revenue in the 2009 CFA budget plunged to around Dh292.6 billion from a record high of Dh450.3 billion in 2008.
The decline was a result of a sharp drop in hydrocarbon export earnings to nearly Dh217.5 billion from a peak of Dh362.1 billion in 2008. – Emirates 24|7
UAE on track for balanced budget posted on 25/08/2010
The UAE Government is on course to balance its budget after spending about half its projected Dh43.6 billion (US$11.87bn) annual appropriation in the first six months of the year, a top official says.
A rise in receipts from Federal Government ministries compared with last year contributed to improved revenue, said Younis al Khoori, the director general of the Ministry of Finance.
"In the first six months we have almost executed what was requested by the Federal Government for the year,” he said.
In addition to contributions from the individual emirates and receipts from Federal Government ministries, the national budget also receives dividends from Government investments.
"These are the three main sources of our revenue,” Mr al Khoori said. "The slight increase was from the government fees. As long as we have a consolidated revenue increase, we have an increase.”
Although the present UAE budget is 3.4 per cent larger than last year's, the increase was smaller than in the years leading up to the global financial crisis.
Before the budget was approved last year, the ministry said 22.5 per cent of funds would be spent on education and 17.5 per cent on infrastructure projects.
Saeed Rashid al Yateem, the acting executive director of budget and revenue at the ministry, said the budget would be balanced by the end of the year, without specifying the oil price on which the ministry had based its calculations. The budget has been balanced for the five previous years.
A resurgence in oil prices from last year has helped to replenish Government reserves depleted during the global financial crisis.
Close to the peak of the crisis in late 2008, the Ministry of Finance announced a plan to set up a Dh70bn support facility for banks. Dh20bn of that amount remained untouched, Mr al Khoori said.
This year will be the last time the ministry releases a budget on an annual basis. From next year, it will move to developing budgets lasting three years as it looks to extend its longer-term planning for economic growth and infrastructure projects.
"The Ministry of Finance has started its budget preparation for the years 2011 to 2013,” Mr al Khoori said.
"We are in the final stages of agreeing a budget cap for the 2011 up to 2013.”
Although the budget would run for three years, it would include annual expenditure and revenue plans and be open to adjustment if there was a decline or increase in revenue during the period, Mr al Yateem said. – The National
Abu Dhabi to slash budget gap, continue development posted on 20/07/2010
Abu Dhabi expects to reduce its budget deficit to Dh84.9 billion in 2010 from Dh126.5 billion in 2009, based on an assumed oil price of US$60 a barrel for the year, official documents show.
This will take place as the emirate carries out its ambitious development plan.
Abu Dhabi posted the higher 2009 deficit as crude oil prices slumped, and it spent more on development.
This was according to figures published in the prospectus for a planned bond sale by local aircraft leasing and investment firm Waha Capital.
The bond is to be "unconditionally and irrevocably guaranteed" by the emirate of Abu Dhabi.
Officials at the Abu Dhabi Department of Finance could not be reached for comment yesterday.
Abu Dhabi's government does not publicly release budget figures and projections. The emirate last disclosed such numbers in the prospectus for its US$10 billion sovereign bond program in March 2009.
At that time, the government had projected a budget deficit of Dh42.6 billion based on an oil price of US$50 per barrel, the sovereign bond prospectus said.
The Waha prospectus, dated July 2010, showed that the actual budget deficit for 2009 — though figures were "preliminary and subject to amendment and audit" — was about three times as large.
"As with previous deficits, the budgeted deficit in 2010 is expected to be financed by transfers from ADIA and ADIC which in turn are expected to be funded by Adnoc dividends," the prospectus said.
The ADIA is the Dhabi Investment Authority, and the ADIC is the Abu Dhabi Investment Council, spun off from ADIA to focus on regional investments.
Economists said the large deficit recorded last year was unexpected.
"I suspect the data excludes a number of significant revenue streams that accrue to the government but do not pass through the Department of Finance," said Simon Williams, chief economist, HSBC Dubai. – Gulf News
Ministry of Finance: zero-budget to minimise wasted public money posted on 13/04/2010
The Ministry of Finance said the implementation of a 3-year zero-budget budget will restrict financial violations at some ministries and governmental departments, said Director General of the Ministry Younis Haji Al Khouri.
The said budget will also realise the government's ambitious development strategy as well as improve quality and timeliness of services and minimise wasted public money, Al-Khouri added in reply to queries by the Financial, Economic '&' Industrial Committee at the Federal National Council in its 15th meeting at Dubai.
Chair of the FNC body Abdullah Al-Mansouri asked representatives of the Ministry of Finance to explain the procedures of the zero-budget, its compatibility with current legislations and regulations, adaptability to future changes. He also sought explanations of the procedures to reveal violations at governmental departments.
The representatives explained that last year, and as a trial, the Ministry of Health, Ministry of Finance itself and the UAE University applied the zero-budget, adding that a feasibility study was submitted to the cabinet which ordered the enforcement of this type of budget on all ministries. – Emirates News Agency, WAM
Dubai Finance Chief eyes budget surplus in 2011: Report posted on 01/03/2010
Dubai's government has started to cut spending in an effort to swing its budget to a surplus by 2011, the emirate's finance chief said in a report published on Sunday.
Abdulrahman Al Saleh, the head of Dubai's Department of Finance, told Al-Bayan that he plans to trim the government's operating expenses by 15 per cent this year to reduce the budget gap.
Dubai approved the 2010 budget with a deficit of two per cent of GDP, deeper than last year and in line with a budget committee's proposal, the government said in January. The plan will be drafted in collaboration between the Department of Finance, financial services departments of local government bodies, and institutions included in the general budget of the emirate. – (Reuters)
DEC releases report on Dubai's 2010 Budget posted on 12/01/2010
The Secretariat General of the Dubai Economic Council (DEC) released a brief report about the Emirate of Dubai's 2010 budget which was approved by H.H. Sheikh Mohammad bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai last Thursday.
Under the heading 'The 2010 Budget...A Balance between Economic '&' Social Goals', the report said that the budget reflects a clearly defined strategy that will achieve economic growth levels and counter the impact of the economic cycle accompanying the global economic crisis.
The report also confirmed that the stipulations of the budget is in line with internationally recognized financial standards particularly as it relates to activating the role of fiscal policy for macroeconomic management. Additionally, the report pointed to the fact that the goals of the budget are not solely confined to the financial and economic aspects but extend to include the social aspect evident in the section on public spending that is aimed at improving standards of socio-economic prosperity for citizens and residents of the emirate.
This budget is based on institutional reforms that took place last year 2009 in a manner that allowed for efficient spending including avoidance of unproductive expenditures, and enhance revenues, in addition to a return of confidence in the local economy after a series of procedures and policies undertaken by the government all aimed at stimulating growth, said the report.
With regards to government spending estimated at Dh10.7 billion representing almost one third of total public spending the focus has been on developing infrastructure, and therefore it is expected that these projects will contribute in noticeably raising economic growth rates in the coming period and encourage a flow of local and foreign investment.
Analysing fiscal deficit the report explained that the gap between public revenue (Dh29.4 Billion) and public expenditure (Dh35.4 Billion), which amounts to Dh6 billion, reflects an "adequate" fiscal policy in light of current conditions, assuming that Dubai's GDP is estimated at Dh324 billion, and therefore this gap does not exceed 2% of this GDP which is in line with the recommendations of the Dubai Supreme Fiscal Committee.
Shedding light on the budget's support for the Infrastructure Sector the report illuminated one of the most important features of spending in the economic sector which includes infrastructure, Roads '&' Transport Authority, Airports Authority, the Municipality, and tourism, where this sector accounts for almost half of public spending.
This comes as a necessity dictated by the economic conditions experienced by the emirate in light of the global economic crisis, where the continuity of the development of infrastructure remains within the strategy of the Government of Dubai that aims at establishing economic institutions on a solid foundation that can achieve high levels of sustainable growth, noted the report.
The report also noted that the sectoral classification of public expenditure involves a vital balance of the different aspects of the Emirate of Dubai. It is noted that the relatively large weight (49%) of expenditure is in the economic sector in order to stimulate overall economic activity and higher rates of economic growth. Additionally, social expenditures accounted for 23%, which reflects the Government's desire to maintain high levels of stability and social welfare in addition to its aim of economic growth.
Discussing the increment of salaries in accordance with current international best practice, the report said that with regards to the economic distribution of government spending, current spending has amounted to Dh24.7 billion representing 70% of total government expenditure, half of which was paid in wages and salaries, which is a sound policy in light of the global financial crisis, where ensuring a steady income for all members of society is a safety valve against the dangers of deflation.
The report confirmed that this direction is in line with international best practice measures in the area of economic policy which aims at stimulating growth and ensuring minimum levels of employment. Therefore, the increase in wages and salaries in Dubai's budget is in complete harmony with the current conditions in the Emirate of Dubai and the UAE in light of the global financial crisis.
The report also said that 2010 budget fulfils the predictions of international organizations about increased growth and Post-Crisis Preparedness.
It said that the structure of this year's budget has increased the likelihood of fulfilling the predictions widely circulated in reports by international organizations as well as local indicators about the possibility of increasing Dubai's economic growth levels at record-high levels in 2010 and the coming years as compared to the year 2009. Additionally, the report indicated that the differences between the areas of expenditure in the current budget as compared to last year's budget will establish a strategy that will support strategic planning for the post-crisis era.
The report concluded that the 2010 Budget establishes a future strategy to support fiscal sustainability in Dubai.
As a look to Dubai's financial future in the next five years (2010-2015) the DEC Secretariat General reiterates the need for a study that supports the direction of fiscal institutions in Dubai as they gradually move towards an adoption of a series of policies that aim at fortifying fiscal sustainability while achieving the goals of economic stimulus as currently in-progress infrastructure projects complete, said the report. - Emirates News Agency, WAM
Ruler of Dubai approves budget for the 2010 posted on 08/01/2010
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has approved the law of the fiscal year budget for the year 2010 of the government sector in the Emirate of Dubai.
The Public Budget of the Government of Dubai reflects Sheikh Mohammed trends assuring need to work within the framework of a fiscal policy which aims to raising economic growth rates and to overcoming the repercussions of the global crisis and in the same time commitment with the internationally recognized financial rules regarding the budget deficit and public expenditure management.
Dhahi Khalfan Tamim, Commander in Chief of Dubai Police and Chairman of the Public Budget committee for the 2010 fiscal year, said that the Public Budget of Dubai Government is based on the vision of Sheikh Mohammed in elevating the level of economic and social prosperity for the people and residents of the Emirate, the need to continue developing the Emirate's infrastructure, to support the emirate's economy , as well as adhering recommendations of the Supreme Committee of Fiscal Policy, chaired by His Highness Sheikh Ahmed bin Saeed Al Maktoum by the continuation of working on fiscal stimulus to the emirate's economy through expansionary fiscal policy with a commitment to financial rules which are internationally accepted .
It is estimated that the budget will achieve a current surplus and maintain the budget deficit which should not exceed the budget deficit percentage approved by the Supreme Committee of the fiscal policy and to direct government spending to the aspects that are consistent with the strategic, economic objectives of the Emirate.
Director-General of the Department of Finance Abdul Rahman Al Saleh highlighted the Public Budget key features which are to achieve a current surplus of Dh1.9 billion as a result of the application of public spending management programs on the basis of efficiency, effectiveness and officials in government departments and agencies increasing awareness to work to achieve the optimal use of public funds.
The total government investment spending reached Dh10.7 billion, representing 30% of total government spending for the development and completion of infrastructure projects in accordance with the set plans.
Al Saleh said that the Dubai Government public budget represents a balance between the necessity to support and stimulate economic activity on the one hand and commitment to the financial rules and sound principles of public funds management on the other.
HIGHLIGHTS OF BUDGET
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, signed the law of fiscal year budget in 2010 for the government sector in the Emirate of Dubai. The Public Budget of Dubai Government reflects the guidance of HH assuring the need to work within the fiscal policy framework aiming to elevating economic growth rates, to overcome the global crisis repercussions and in the same time commitment to the internationally recognized financial rules regarding the budget deficit and public expenditure management.
The Public Budget main key features of this year are the continuation to work in the development and completion of the emirate's infrastructure projects. where an estimated government spending on infrastructure in the 2010 budget is Dh 10.7 billion, representing 30% of total government spending in the framework of the emirate's government to increase total demand and moving the emirate's economy to the stage after the crisis.
It is estimated that the operating budget surplus will reach Dh1.9 billion. Achieving this surplus is one of the fruits of increasing efficiency of government spending without unbalancing the overall objectives of fiscal policy and . This surplus was achieved despite an increase in the number of workers in the public sector of 3.6% compared to last year (2009).
According to the Public Budget for 2010 it is estimated that government revenues will reach AED 29.4 billion. The government spending for the same year will reach Dh 35.4 billion. (A noted a decline in estimated government spending in 2010 as compared to government spending in 2009 by nearly 6%, this is mainly due to the completion of many infrastructure projects, according to the government's plan).
The 2010 Public Budget comes under commitment of the internationally adopted financial rules which represents one of the main trends of the Emirate's Government in the public funds management. It is estimated that the deficit will reach Dh6 billion, which makes the deficit ratio to GDP does not exceeding 2% which is less than the maximum deficit allowed (3%) of GDP. The volume of the operating surplus for this year increased to reach Dh1.9 billion.
Department of Finance in Dubai Government estimations indicate that the coming years will have a surplus in the public budget as a result of plan completion of Emirate 's infrastructure development in accordance with the directions of HH Sheikh Mohammed and in order to provide a great investment environment which is highly Excellent.
The distribution of government spending on various sectors in the 2010 budget was as follows: The estimated spending on the economic sector, infrastructure and transportation (RTA, Airport Foundation, Dubai Air Wing, Municipality and tourism) is Dh17.45 billion, which represents 49% of total government spending.
The estimated spending on the social sector and public services (health services, education, social development and Islamic affairs) is Dh8.108 billion which represents 23% of total government spending.
The estimated allocations to the security and justice sector (police, nationality and residence, the courts and public prosecution) is of Dh6.985 billion, representing 20% of total government spending.
The estimated spending on support, transferring and government excellence sector is Dh2.809 billion which represents 8% of the total public expenditure.
The sectoral distribution of government spending reflects the balanced strategy of the Emirates' Government, which is based on two main rules. The first rule is to achieve high rates of economic growth, which brings more economic prosperity for the emirate residents as evidenced from the proportion of government spending-oriented to the economic sector.
Upgrading the welfare of the community members of would not be complete except by adhering to the social dimensions, that's why the attention to the social sector was clear through the allocations of government spending on social sector, public services, security and justice sector, which reaches 43% of total government spending.
This balance between economic and social aspects is a reflection of the vision of Sheikh Mohammed that "man is the real wealth of the nation." With regard to the economic distribution of government spending, the current spending reached Dh24.7 billion, representing 70% of total government spending, while investment spending (spending on infrastructure) reached Dh10.7 billion, representing 30% of total government spending.
Salaries and wages reached Dh12.3 billion, representing 50% of current spending and 35% of total government spending. The public management expenditure reached Dh11.384 billion, representing 46% of current spending and 32% of total government expenditure. While capital expenditure reached Dh982 million, representing 4% of current expenditure and 2.7% of total government spending. – Emirates News Agency, WAM
UAE cabinet approves record Dh43.6 billion federal budget for 2010, UAE-US agreement on peaceful nuclear cooperation posted on 27/10/2009
An extraordinary meeting of the UAE Cabinet presided over by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai approved yesterday a Dh43.6 billion federal budget for 2010. The budget represents an increase of 3.4% compared to 2009 and will be balanced with no deficit spending for the sixth consecutive year.
The approved budget, effective on the 1st of January 2010, reflects the UAE's strategic priorities by focusing on social development, education and health; allocating a total of Dh9.8 billion towards projects in schools and higher education, representing 22.5% of the total figure. A further Dh7.6 billion or 17.5% of the total has been set for infrastructure development projects.
The 2010 budget, which had earlier been proposed by the finance and economy committee headed by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, will be the largest in the UAE's history despite the global economic environment. The budget continues a proven fiscal strategy that has allowed the UAE to develop a diversified income portfolio, which in 2010 will include a total of Dh25.8 billion in revenues at the ministry and federal authority level, compared to revenues of Dh7 billion achieved in 1999.
The social sector will be a key focus for spending, with education, health, labour, social, Islamic, sports, youth and cultural affairs as well as Housing Programme receiving a combined Dh17.8 billion or 41% of the total. Defence, security, justice, foreign affairs and other federal authorities will receive Dh17.2 billion, or 39% of the budget.
Dh7.2 billion, a 16.5% share of the total, has been allocated to the Ministry of Education to continue its development plans within government schools. These include a number of initiatives such as the 'Schools of Tomorrow' and 'Teacher of the Century' programmes, as well as various educational infrastructure projects in ICT, health '&' safety, curriculum reform, facilities development and several projects to serve students with special needs.
Dh2.7 billion, a 6.2% share, will be spent in areas of higher education, research and development, supporting the different plans, programmes and initiatives being carried out by the Ministry of Higher Education and Scientific Research. These include overseas scholarships for UAE citizens, Emiratisation of the educational sector as well as the development of facilities within the UAE's many universities.
The budget share allocated to the Ministry of Health will be set at Dh2.8 billion, an increase of about Dh140 million over last year's budget and one which aims to ensure service excellence. The ministry's main priorities will focus on providing high quality health services to citizens as well as the development of new medical facilities, Emiratisation of the medical, technical and administrative cadres within the health sector and the implementation of an advanced Health Information System (HIS) connecting the nation's health facilities.
In line with the government's strategic goal of balanced development across all Emirates, the 2010 budget has set a total of Dh7.6 billion towards federal infrastructure development projects and programs such as roads and transport, medical facilities, housing and government facilities.
These include the following priority initiatives: Dh1079.6 million towards the Sheikh Zayed's Housing Programme Dh497 million for ground transport infrastructure development such as: o Dubai-Fujairah highway o Development of the Dibba-Masafi road (phase 2) o Development of the Dibba-Khorfakkan road o General maintenance of other roads within the UAE UAE-wide education and health buildings allocations amounted to Dh437 million which will be spent on the building of new primary and secondary schools, preventative medicine, medical and dental centres in different Emirates.
A further amount of Dh275 million has been set aside for the completion of various initiatives within the Ministry of Interior, Ministry of Justice, Ministry of Youth and Cultural Affairs and the Ministry of Social Affairs, including: Police, Civil Defence and Immigration buildings Ajman and Fujairah courts and public prosecutors buildings Falaj al-Mu'alla courts building Umm Al Quwain and Ajman cultural centres Ras Al Khaimah, Dibba and Fujairah ladies' centres.
The cabinet has also approved the agreement for cooperation signed by the United Arab Emirates and the United States of America, concerning peaceful uses of nuclear energy.
It condemned the continued Israeli aggression on Al Aqsa Mosque in the occupied Jerusalem and the series of bombings which rocked Baghdad on Sunday. – Emirates News Agency, WAM
UAE to revamp budget regime posted on 05/03/2009
The UAE has launched steps to reform the federal budget process as part of its efforts to move into a zero-based budget regime from 2011.
With the introduction of the new system, the UAE's federal budget would cover a three-year period instead of the present one year, top officials at the Ministry of Finance said, while speaking at a kick-off meeting for the budget restructuring on Wednesday.
"The UAE will still have annual budgets, but they will form part of a three-year budget which will provide lot of flexibility in the implementation of the various programmes envisaged in it,” Younis Al Khoori, General Manager, MoF, said.
"The new system is expected to usher in more transparency in the budget preparation and tighter monitoring of the implementation of the various schemes besides ensuring maximum social impact for those schemes,” Al Khoori added.
The final version of the UAE's first zero-based three-year budget will be announced in the summer of 2010 and will cover the period from 2011 to 2013, MoF Executive Director Khalid Ali Al Bustani said.
The UAE is probably the first country in the region to introduce the zero-budget regime, which is in vogue in about 28 states in the United States apart from the UK, Singapore and several other countries, Al Bustani said.
The MoF has appointed the Boston Consulting Group (BCG) to design the core concepts of the zero-based budget regime suitable for the UAE and the modalities for its implementation. Making a presentation at the meeting, the representatives of the BCG said that the preparatory process for the transition of the UAE budget from the existing incremental structure to a zero-based regime would be completed in three key stages.
In the first "diagnostic and design stage”, the existing budget process of the various Line Ministries (LM) and Autonomous Agencies (AAs) would be reviewed and the design of the revised budget process would be prepared with the participation of the officials of those two sections.
This process is already underway starting on February 11 and would be completed on June 28, Pia Hardy, Project Leader at the BCG branch in Dubai, said.
The second stage starting from March 29 and reaching up to May 31, would cover the pilot projects for testing the new systems. The MoF is yet to select the three entities for implementing these projects. "We will be selecting the most complex departments for this. If the new system works for such a complex entity, then it can work for others also,'' Martin Manetti, Partner and Managing Director of BCG branch in Abu Dhabi, said.
The first complete draft of the zero-based three-year budgets for 2011 to 2013 for all the LMs and AAs will be prepared in the third "implementation” stage. The time frame set for this stage is from June 1 to November 15 this year, Pia Hardy said.
"The final draft will then be submitted to the Prime Minister's Office (PMO) which will amend it in accordance with the strategic plan prepared by the PMO,” she said.
As per the earlier Cabinet Decree on the timeline to reform the UAE federal budgeting, the PMO will issue the budget circular for 2011-2013 on April 1, 2010 and the Cabinet is scheduled to give its final approval for the budget on September 15, she said.
Obaid Humaid Al Tayer, Minister of State for Financial Affairs, opened the ‘kick-off meeting', which was being attended by director-generals, executive managers, chairmen of departments and heads of sections responsible for planning the budgets at the federal level.
The session was convened within the framework of the federal government strategy, launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to upgrade government performance.
Al Tayer said a detailed guide would be prepared to explain the new procedures for the new budget regime for all federal bodies.
The MoF will also provide training for budget planners so as to develop their capacities and ensure proper and efficient implementation, the minister said. – Khaleej Times
FNC ratifies the Dh42.2bn federal draft budget for 2009 posted on 01/01/2009
The Federal National Council (FNC) has given its approval for the Federal daft budget for 2009, the biggest in the history of UAE.
The FNC session chaired by Speaker Abdul Aziz Abdullah Ghurair was attended by Minister of State for Foreign Affairs HE Dr. Anwar Mohammed Gargash and Minister of State for Financial Affairs HE Obeid Humaid Al Tayer.
The Dh42.2bn no-surplus and zero deficit budget covers all ministries and the affiliated federal institutions.
The FNC also obtained an approval from Al Tayer to increase the budget by AED 53mn.
Al Tayer disclosed that the Ministry of Finance and Industry is planning to prepare a revenue law, which will incriminate the default by individual emirates to contribute their shares to the federal budget income. Some members in the FNC had raised this issue during the discussion of the draft budget. – Emirates News Agency, WAM
Budget of 2009 does not include imposition of tax or new fees: Ministry of Finance posted on 23/10/2008
The Ministry of Finance, said the budget of 2009 does not include imposition of tax or new fees. It added that it was mulling over issuing treasury bonds for 2010 as per declared strategy of the ministry for coming years. – Emirates News Agency, WAM
Dubai's 2008 budget posts Dh11.4 b surplus posted on 13/01/2008
H.H Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai has issued, in his capacity as a ruler of Dubai, Decree No. 8 for 2008 announcing the balance sheet of the emirate, which is expected to touch a surplus of Dh11.4 billion compared to Dh5.1 billion in 2007.
Dubai's Revenues of fiscal year 2008 are expected to touch Dh135 billion, while planned spending is estimated at Dh123.6 billion. Dubai's non-oil sector has scored success in regard to production rate through the emirate's endeavours to expand and diversify revenue sources and base of income.
According to the financial report, the contribution of oil sector to the projected Gross Domestic Product (GDP) in 2008 will be four per cent. The share of Dubai's public sector in the balance sheet was 21 per cent, while the contribution of the economic sector was 79 per cent.
Sheikh Mohammed has also issued Law No. 29 for 2007 on budgets of the departments of Dubai government in the year 2008.
The said budgets are put at Dh26.5, in which expenditure was distributed as per the strategic plan. Salaries and wages totalled 28 per cent, while the administrative and general expenditure were 32 per cent. The developmental and projects accounted for 40 per of the budget of the government departments.
"The endorsement of the Dubai emirate's balance sheet by Sheikh Mohammed reflects the keenness of Dubai government on its major role in the achievement of targeted economic and social aspirations", said Secretary General of the Dubai Executive Council Ahmed bin Bayat.
He noted the attention paid by Sheikh Mohammed to members of the community through his emphasis on making economic development go hand in hand with social development. Director General of Dubai finance department Sami Dhaen Al Qamzi said the 2008 budget reflects new dimensions and shows a growing attention is being paid to infrastructure projects as per international standards. - Emirates News Agency, WAM
FNC approves draft federal budget posted on 31/12/2007
The Federal National Council (FNC) on Sunday approved the draft federal budget for 2008 after more than eight hours of debate. The balanced budget expects Dh34.9 billion in revenue, 44 per cent of which will be contributed by the emirates of Abu Dhabi and Dubai; 13.9 per cent from investments returns and 20.9 per cent from etisalat. Various other federal revenues account for the remainder.
The session was chaired by FNC Speaker Abdul Aziz Al Ghurair and attended by Dr. Mohammad Khalfan Bin Kharbash, Minister of State for Financial and Industrial Affairs, and Dr. Anwar Mohammad Gargash, Minister of State for FNC Affairs.
Government officials yesterday questioned the members of the FNC - the UAE's consultative legislative body - on a Dh117 million budget request after the members failed to justify the requirements. Some concerns were raised about the education sector, where about 5,000 UAE students cannot find seats in federal higher education institutions, as well as the limited funds allocated for students overseas, and the modest budget set for the establishment of a federal institution for scientific research."We have limited resources, and although it will make us glad to respond to the needs of any federal entity, this does not happen," Kharbash said.
The government wants to apply better accounting standards in setting the budget, including the introduction of progress indicators. "By the end of 2008 we will not have the most satisfactory results, but will be a step closer towards benchmarking the progress," the minister said. The FNC's recommended allocating more funds for housing, especially the Zayed Housing Project, social services, and power. (Gulf News)
Federal Budget for 2008 the largest in the history of UAE - Kharbash posted on 22/11/2007
Dr. Mohamed Khalfan bin Kharbash, Minister of State for Finance and Industry confirmed that the federal budget approved by the cabinet yesterday is the largest budget in the history of UAE. Kharbash added that the Dhs.34.9b budget with a substantial increase of 23.7 percent in comparison to the current budget is a balanced one and does not contain any new increase in federal fees.
The increase in federal revenue is realised through the country's investments in various sectors in accordance with the cabinet decision, the Minister pointed out. Addressing a press conference Kharbash said that the principle of a balanced federal budget was adhered to as per the Federal law No. 23 for Year 2005. The last three budgets came in line with this principle and now it is the fourth successive year the country is going to have a balanced budget, Kharbash pointed out.
He added that special amounts have been earmarked to implement the federal strategy of governance and these amounts have been included in the budgets allocated for various ministries and federal authorities. This was done in coordination with the Prime Minister's office.
The budget for 2008 comes much early in time so as to give various ministries and federal entities the potential to begin their respective programmes on time when the new year dawns, noted the Minister.
The budget also contains provisions for a 70 pc increase in the salaries of all federal employees, including civilians and military personnel as well as the pensioners as per directives from President H.H. Sheikh Khalifa bin Zayed Al Nahyan and orders of H.H. Sheikh Mohammed bin Rashid Al Maktoum Vice-President and Prime Minister of UAE and Ruler of Dubai, noted Kharbash.
He explained that the salary increase for federal employees takes two things into consideration, first of which is to encourage human resources to stay in the federal machinery, to develop this resource giving adequate attention to it in a way that it will promote the sustained development.
The human consideration is the second one as it is reflected in the care given to the pensioners with a substantial increase in the pension amount. This is an expression of benevolence of the country's leadership. Kharbash underlined that that every employee in the federal government will benefit from the salary increase.
He also said that preferences have been given to the implementation of the strategies of various ministries during the budget year as every ministry has its own respective strategy which is clearly defined and is time bound. Kharbash noted that the social services sector has been allocated the biggest share as the Ministries of Education, Health, Social Affairs and Culture, Youth and Community Development take the major chunk sharing among them Dhs.14.4b.
The budget allocated Dh.11.6b for security and Justice sectors and this constitute 33 pc of the total budget. The press conference was also attended by Undersecretary of the Ministry Yunus Haji Al Khouri and Assistant Undersecretary for Resources and Budget Khalid Ali Al Bustani (Emirates News Agency, WAM)
Cabinet approves biggest, zero-deficit budget posted on 21/11/2007
The Cabinet passed on Tuesday the federal budget for the fiscal year 2008, the largest ever in the UAE's history and the fourth consecutive free-deficit state budget. The budget was approved in a cabinet meeting chaired by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The 2008 budget bill, submitted by the Ministry of Finance and Industry, accounted for Dh34.9 billion, an increase of Dh6.7 billion, or 23.8 percent, compared with the 2007 budget.
The budget, which is issued an year earlier for the second time on a row, included the Dh 1.4 billion financial allocations for implementation of the federal government strategy announced by Sheikh Mohammed. It also contains allocations resulting from the 70 percent increase in salaries of employees at federal government, personnel at the Interior Ministry and retired civilian and military personnel.
Education received the largest allocation in the budget with Dh9.7 billion earmarked for general and higher education. The Ministry of Education will receive a budget of Dh7.1 billion to enable it implement the strategic plan of developing school environment and to introduce modern technology methods. Higher education budget was also boosted to Dh2.3 billion.
The Ministry of Health's budget received a 66 percent increase to reach Dh2.5 billion, while an amount of Dh1.02 billion was added to the budget of Interior Ministry to enhance security sector. The amount will be used to maintain security and stability, to enhance capabilities of police personnel, to modernize civil defence equipment, to continue the e-passport project, to boost Emiratisation plan and to support the budget of Emirates Identity Authority.
The budget also covers the increase in salaries of diplomats and the drive to enhance diplomatic representation, ordered earlier by President H.H. Sheikh Khalifa bin Zayed Al Nahyan.
The Ministry of Justice also received a boost of Dh199.4 million to implement its strategy, aimed at creating a modern catalyst for legislation, improving service and developing alternative systems for litigation.
The Culture, Youth, Sports & Community Development sector will use its Dh138 million grant to bolster its strategy, aimed at preserving national identity, spreading cultural awareness, enhancing youth role and supporting UAE Football Association.
The economy sector was granted a Dh111.5 million boost to streamline its strategy of updating economic laws, providing attractive environment for investments and supporting small and medium-sized enterprises.
A Dh137 million grant was ear-marked to strengthen Labour Ministry's efforts to develop a comprehensive demographic policy.
The 10 key programmes in the 2008 budget comprised of MoE's general education (Dh6.5 billion), MoI's Police services (Dh2.3 billion), MoH's curative services (Dh1.9 billion), MoSA's social development (Dh1.3 billion), MoFA's external affairs (Dh1.2 billion), FEWA's electricity production & distribution (Dh1.01 billion), UAE University's education services (Dh1.06 billion), Higher Colleges of Technology's education services (Dh800 million), MoPW's roads network (Dh544 million), and MoI's internal affairs (Dh515 million). The total cost for infrastructure projects in the budget has been increased to Dh8.6 billion from Dh6.6 billion in 2007. (Emirates News Agency, WAM)