Subsidies Subsidies

13 Feb, '07

Bahraini Prime Minister

I’m still a bit confused from reading various reports yesterday of the government subsidising basic necessities to the tune of BD500 million (US$1.326 billion) a year. Of that staggering figure, we know that BD12 million are spent on subsidising meat, poultry and flour.

Okay, that is good in that it keeps prices of necessities low, it’s not good economic sense I don’t think, there are other more effective ways to get these subsidies to the people who need it most (ration cards of coupons would do better I think) as these blanket subsidies offered would apply to multimillionaires and rock-bottom poor people too. I think it would be much more effective actually to raise the education level, work ethics, and provide jobs. The old adage “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for life.” should be taken to heart and implemented.

Apart from that, a question begs to be asked: where does the remaining BD488 million go? And if only 12 million suffices for providing reasonable prices for the basic necessities, what else is actually subsidised? Lipstick? Deodorant? Soap? Alfalfa?

What constitutes a dire necessity that the government takes away that huge figure – which is almost equivalent to the total infrastructure projects budget the government got approved but never fully used in 2005?

I know I’m no economist, but simple maths is all that is necessary here. When HH the PM declares that staggering budget but only specifies how 2.4% of the total sum is applied, a multitude of questions are raised, and it behooves our parliamentarians to seek their answers. Apart from those present at HH’s majlis, included the press, who should have questioned HH even just a little bit to get him to explain these figures a bit more.

I hope that parliament will correct this situation by tabling a question to HH’s office to seek a full explanation of the subsidies strategy adopted by the government and what actually constitutes a basic necessity deserving of this subsidy. I wonder too if this figure is actually approved in the national budget, because if it had and no red flags were raised, then we do have a problem on our hands.

I feel that this must be a mistake in recording the figure or that it has been taken out of context, but none of the papers I read this morning so far offer this avenue of escape. Half a billion Dinars on subsidies? This is insane!

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Comments (4)

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  1. Silver says:

    yeah good question, where does the rest of BD500 million go? anyone??

  2. Anonymous says:

    GAS WATER and ELECTRICITY. :sleeping:

  3. Anonymous says:

    Electricty for sure… Do you know what the prices will rocket to if the govt decides to privatize this sector..

    God forbid!!!

  4. anonymous says:

    electricity and water are heavily subsidised in Bahrain, same applies to Baladiya services many families especially the poor ones are exempt from paying the fees, petrol is also subsidised ( and correct me if im mistaken BD 60 million per year), and maybe the 50% reducation of the housing loans which exceeded BD100 million is also included in the package? as you said when dealing with subsidies it should be targeted only to those who really need especially on necessary commodities like food, a solution would be like you’ve mentioned ration cards or coupons or as they call it in the UK means-testing, which is simply those who are need will only recieve aid and benefit. masama7a 3la ilcomment il6aweel 🙂

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