Saudi Cabinet approves state budget for new fiscal year

Custodian of the Two Holy Mosques: SR475 billion budget, SR65 billion increase compared to 2008 budget

New budget, despite sharp oil prices decline, enhances development programs that lead to national economy growth

Full text of three royal decrees on new budget

Under the chairmanship of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud, the Cabinet held its weekly session Rawdhat Khuraim. During the session, the Cabinet approved the State Budget for the fiscal year 1430/1431H.

In a statement to the Saudi Press Agency (SPA) following the session, the Minister of Culture and Information Iyad bin Amin Madani said that "Under the directives of the Custodian of the Two Holy Mosques, the Cabinet approved the State Budget for the fiscal year 1430/1431H."

Following that, the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud addressed his fellow citizens, announcing the budget as follows:

"In the name of Allah, Most Gracious, Most Merciful

Thanks to Allah Almighty, prayers and peace be upon Prophets and Messengers

My brother citizens, my sister female citizens

Peace and blessings be upon you all

With the grace of Allah Almighty, we would like to announce the budget of the new fiscal year (1430-1431H) which amounts to SR 475 billion, with an increase of SR 65 billion compared to the budget of the current fiscal year.

The new budget, despite the sharp decline in the petroleum prices during its preparation, will be, God willing, enhancing the development programs which lead to the growth of the national economy and cementing confidence in it as well as making job opportunities available for the citizens and female citizens.

We have issued our directives to carry out new programs and projects at a cost of more than SR 225 billion, an increase of 36 percent from the allocations in this current budget, and three times of what was approved at the beginning of the Eighth Development Plan, which began four years ago.

In the sector of general education and higher education, training of workforce, sciences and technology, scientific research, and foreign scholarship programs about SR 122 billion have been allocated.

This figure constitutes more than a quarter of the allocations of the new budget.

"In complementary to investment in the infrastructure of this sector, new projects have been approved so as to make the suitable environment available for education, and to increase the capacity of the schools, universities and specialized colleges, notably the implementation of Princess Noora bint Abdurrahman University project, King Saud bin Abdulaziz University for Health Sciences and their affiliated branches.

In the sector of health services and social development, about SR 52 billion have been allocated to increase the capacity of the hospitals, and improve the primary health care.

The budget also included continuation in supporting the programs of tackling poverty in addition to giving attention to youth and sports affairs.

Allocations for expenditures in the sectors of water, municipal services, agriculture, industry and basic installations have amounted to about SR 49 billion.

Within the framework of the attention given to these sectors, the budget included new projects for the municipalities and additions to some existing municipal projects, enhancing water resources, sewage services, environmental protection and safety of food and medicine.

In the sector of transport and telecommunications, the allocations this year amounted to SR 19 billion.

Sums have also been approved for the implementation of new roads, and completion and repair of several existing roads. These amounts constitute the highest allocations so far, for the roads. This sector also included new projects for ports and airports.

We want all officials to remain keen on the follow-up of the implementation of the projects included in the budget so as to implement them in line with the fixed times so as to make the services required by the citizens available and to accelerate the wheel of comprehensive development.

At the end, we thank Allah Almighty for enabling us to mobilize our potentialities for the promotion of the services extended to the dear sons of our homeland, and to attain prosperity and development.

We pray to Allah Almighty to perpetuate his bounties on all, and to benefit the country and the citizens from this budget.

Peace be upon you all"

The Minister of Culture and Information said that under the directives of the Custodian of the Two Holy Mosques, the Minister of Finance provided a brief presentation of the draft new state budget and reviewed the developments of world economic situations, national economy and fiscal results for the current year 1428/1429H. The Minister of Finance reviewed the main features of the new budget, saying:

According to the Central Department of Statistics and Information, the gross domestic product (GDP) volume of this year 1428/1429H (2008) is expected to reach SR1,753,500,000,000 at current rates; growing by (22) percent compared to (7.6) percent for the past year. The oil sector is estimated to grow by (34.9) percent at current prices. The private sector is estimated to grow by (8) percent at current prices.

At fixed prices, the GDP is expected to grow by (4.2) percent. The government sector is expected to grow by (3) percent and private sector by (4.3) percent. All economic activities of private sector have achieved positive growth. The non-oil manufacturing industries are estimated to grow by (5.4) percent; communications, transport and storage (11.4); electricity, gas and water (6.3); construction and building (4.1); wholesale, retail trade, restaurants and hotels (4.2); and services, finance, insurance and real estate (2.2).

The procedures and decisions adopted by the Kingdom in the field of economic reforms have effectively contributed to achieving positive growth rates in the private sector. Such procedures and decisions have led to broadening and diversifying the base of national economy which contributed this year to the GDP by (46) percent at constant prices, except for import duties.

Such percentages indicate the increased effectiveness of this sector, especially manufacturing industries and services which are witnessing continued growth for several years.

Regarding the general level of prices, the Minister of Finance said that "According to the Central Department of Statistics and Information, the index for the cost of living showed an increase in 1428/1429H (2008) by (9.2) percent over 1427/1428H (2007)".

The GDP deflator of non-oil sector is expected to increase by (3.6) percent in 1428/1429H (2008) over the previous year.

The Finance Minister said that the initial projections on the public debt indicate that the net public debt will fall at the end of the current fiscal year 1428/1429H (2008) to SR 237,000,000,000 by (13.5) percent of GDP expected for the current fiscal year compared to (18.7) percent at the end of the previous fiscal year 1427/1428H (2007).

He pointed out that the initial estimates of the Saudi Arabian Monetary Agency indicate that the balance of trade will achieve this year a surplus of SR 820,200,000,000, an increase of (45.8) percent over the previous year.

The current account of balance of payments is expected to achieve a surplus of SR 564,800,000,000 in the fiscal year 1428/1429H (2008), an increase of (59.4) percent over the pervious year which was SR 354,300,000,000.

The Minister of Finance said that the Custodian of the Two Holy Mosques directed that the budget shall include more appropriations and projects than what has been approved in the current budget. The directives focused on the development projects that will provide career opportunities for citizens. When preparing the budget, consideration was taken to invest financial resources in a way that achieves the requirements of comprehensive and sustainable development. Also, the budget prioritized the services that directly concern the citizens such as health, educational, social and municipal services; water and sanitation; roads; and electronic transactions. The budget included new development projects in all regions of the Kingdom to support scientific research through science and technology plan and infrastructure projects.

The Minister of Culture and Information said that the Custodian of the Two Holy Mosques thanked Allah Almighty for blessing this country. The King urged all to thank Allah Almighty and directed all officials to fear Allah at all times and serve religion and homeland.

The Minister of Culture and Information said that the Cabinet approved during its session changing the name of the Saudi Red Crescent Society to become Saudi Red Crescent Commission.

The Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud has issued three royal decrees on the state budget for the fiscal year 1430 - 1431 H. and the Cabinet's decision approving the budget.

The first royal decree estimates the state revenues for the fiscal year 1430 - 1431 H. at SR410, 000,000,000 and expenditures are allocated at SRSR475, 000,000,000.

The Minister of Finance is authorized to withdraw from this account to replenish the expenditures for the projects currently financed from the surpluses of the fiscal years extending from 1424 to 1428 H.

Had the budget yielded a surplus, the authorities should transfer it to the state reserves. No withdrawals are allowed from it unless authorized by a royal decree.

The Minister of Finance is authorized to borrow and transfer from the state reserves, as deemed necessary, to settle public debt and cover the budget deficit.

Expenditures are disbursed according to the budget and relevant instructions.

The transfers from a budget's accredited chapter or branch could take place according to a decision by the Minister of Finance based on a joint report between him and the relevant minister or head of an independent- budget authority.

The transfers between appropriations in the budget's chapters could take place by a decision of the Minister of Finance.

The appointment or promotion of government personnel, workers and laborers is not allowed unless for jobs accredited in the budget.

Also, no new jobs or levels or ranks are created except what was allocated by the budget. Changes in job titles and classifications will be ordered by the Minister of Civil Service.

The second royal decree dealt with the revenues and expenditures of governorates, municipalities and rural compounds for the fiscal year 1428/1429 H. as follows:

First: The expenses of municipalities and rural compounds for the fiscal year 1428-1429 AH are estimated at (SR 16,257,946,000).

Second: The revenues of governorates, municipalities and rural compounds for the fiscal year 1428-1429 AH are estimated at (SR 2,103,506,000).

Third: The difference between direct revenues and expenses amounted to (SR 15,641,096,000) shall be approved in the State's general budget.

Fourth: The expenditures shall be disbursed in accordance with the applicable financial regulations and instructions.

Fifth: Governorates, municipalities and rural compounds shall levy their revenues in accordance with applicable regulations and instructions and the concerned bodies shall follow-up the implementation of this.

The third royal decree covered revenues and expenditures of general organizations whose budgets are annexed to the state's general budget for fiscal year 1430/1431 H.

First: Revenues and expenditures of general organizations whose budgets are annexed to the state's general budget for fiscal year 1430/1431 H. are estimated and approved as follows:

1-Revenues of General Organization of Ports are estimated at SR 2,270,000,000 and approved expenditures at SR 1,067,324,000.

2-Revenues and expenditures of General Organization of Saudi Arabian Airlines are estimated at SR 19,503,000,000.

3-Revenues of General Organization of Grain Silos and Flour Mills are estimated at 1,432,000,000 and approved expenditures at 935,387,000.

4- Revenues and expenditures of General Corporation of Saline Water Conversion are estimated at SR 7,645,527,000.

5-Revenues and expenditures of General Organization of Railways are estimated at SR 1,147,101,000.

6- Revenues and expenditures of Royal Commission of Jubail and Yanbu are estimated at 6,717,629,000.

7- Revenues and expenditures of Saudi Arabian Commission of Specification and Standardization are estimated at SR 161,637,000.

8- Revenues and expenditures of Saudi Arabian General Investment Authority are estimated at SR 136,303,000.

9- Revenues and expenditures of King Saud University are estimated at SR 5,423,782,000.

10- Revenues and expenditures of King Abdulaziz University are estimated at SR 2,906,650,000.

11- Revenues and expenditures of King Fahd University of Petroleum and Minerals are estimated at SR 921,060,000.

12- Revenues and expenditures of Imam Mohammed bin Saud Islamic University are estimated at SR 2,192,698,000.

13-Revenues and expenditures of Islamic University are estimated at SR 493,908,000.

14-Revenues and expenditures of King Faisal University are estimated at SR 2,741,146,000.

15-Revenues and expenditures of Umm Al-Qura University are estimated at SR 1,693,515,000.

16-Revenues and expenditures of King Khalid University are estimated at SR 1,974,558,000.

17-Revenues and expenditures of Taibah University are estimated at SR 1,150,611,000.

18-Revenues and expenditures of Al-Qassim University are estimated at SR 1,296,921,000.

19-Revenues and expenditures of Al-Taif University are estimated at SR 935,536,000.

20- Revenues and expenditures of Jazan University are estimated at SR 720,720,000.

21- Revenues and expenditures of Jouf University are estimated at SR 694,519,000.

22- Revenues and expenditures of Hail University are estimated at SR 588,137,000.

23- Revenues and expenditures of Tabuk University are estimated at SR 500,357,000.

24- Revenues and expenditures of Baha University are estimated at SR 445,880,000.

25- Revenues and expenditures of Najran University are estimated at SR 398,640,000.

7- Revenues and expenditures of Saudi Arabian Commission of Specification and Standardization are estimated at SR 161,637,000.

8- Revenues and expenditures of Saudi Arabian General Investment Authority are estimated at SR 136,303,000.

9- Revenues and expenditures of King Saud University are estimated at SR 5,423,782,000.

10- Revenues and expenditures of King Abdulaziz University are estimated at SR 2,906,650,000.

11- Revenues and expenditures of King Fahd University of Petroleum and Minerals are estimated at SR 921,060,000.

12- Revenues and expenditures of Imam Mohammed bin Saud Islamic University are estimated at SR 2,192,698,000.

13-Revenues and expenditures of Islamic University are estimated at SR 493,908,000.

14-Revenues and expenditures of King Faisal University are estimated at SR 2,741,146,000.

15-Revenues and expenditures of Umm Al-Qura University are estimated at SR 1,693,515,000.

16-Revenues and expenditures of King Khalid University are estimated at SR 1,974,558,000.

17-Revenues and expenditures of Taibah University are estimated at SR 1,150,611,000.

18-Revenues and expenditures of Al-Qassim University are estimated at SR 1,296,921,000.

19-Revenues and expenditures of Al-Taif University are estimated at SR 935,536,000.

20- Revenues and expenditures of Jazan University are estimated at SR 720,720,000.

21- Revenues and expenditures of Jouf University are estimated at SR 694,519,000.

22- Revenues and expenditures of Hail University are estimated at SR 588,137,000.

23- Revenues and expenditures of Tabuk University are estimated at SR 500,357,000.

24- Revenues and expenditures of Baha University are estimated at SR 445,880,000.

25- Revenues and expenditures of Najran University are estimated at SR 398,640,000.

26- Revenues and expenditures of Northern Border University are estimated at SR 444,299,000.

27- Revenues and expenditures of Norah bint Abdurrahman University are estimated at SR 1,425,603,000.

28- Revenues and expenditures of the General Organization for Technical Education and Vocational Training are estimated at SR 3,735,000,000.

29- The revenues and expenditures of King Abdulaziz City for Sciences and Technology are estimated at SR 1,115,413,000.

30- The revenues and expenditures of General Administration Institute are estimated at SR 339,639.000.

31- The revenues and expenditures of King Faisal Specialist Hospital and Research Center at 3,879,250,000.

32- The revenues and expenditures of Saudi Red Crescent Society are estimated at SR 1,399,403,000.

33-The revenues and expenditures of Military Industries Corporation are estimated at SR 1,206,061,000.

34- The revenues and expenditures of Saudi Geological Survey are estimated at SR 164,670,000.

35- The revenues and expenditures of Supreme Commission for Tourism are estimated at SR 384,935,000.

36- The revenues and expenditures of Communications and Information Technology Commission are estimated at SR 396,000,000.

37- The revenues and expenditures of Food and Drug Authority are estimated at SR 393,500,000.

38- The revenues and expenditures of Saudi Post are estimated at SR 1,796,315,000.

39- The revenues and expenditures of General Authority of Civil Aviation are estimated at SR 5,149,929,000.

40- Revenues and expenditures of Human Rights Commission are estimated at SR 55,743,000.

41- Revenues and expenditures of General Commission for Housing are estimated at SR 74,120,000.

42- Revenues and expenditures of General Authority of Survey are estimated at SR 175,881,000.

Second: The surplus of revenues and unpaid amounts drawn from budget allocations shall be deposited in the current account of the Ministry of Finance at the Saudi Arabian Monetary Agency (SAMA).

Third: Revenues and expenditures shall be levied and disbursed in accordance with applicable regulations and instructions.

Fourth: With the exception of the General Organization for Saudi Arabian Airlines, the budgets of other general organizations shall be governed by the provisions provided for in articles (3-7-8-9-10-11-12-13-14-15) of the Royal Decree No. (M/86) dated 24/12/1429 H. approving the General Budget for the fiscal year 1430-1431 AH.

Fifth: The Minister of Finance shall issue the necessary instructions for implementation.

Sixth: The Deputy Premier, Ministers and Heads of Authorities with independent budgets shall, each according to his liability, implement this Decree accordingly.

The decision of the Cabinet number 369 dated on 24/12/1429 H. approved the general budget of the state for the fiscal year 1430/1431 H and stated that all government agencies should spend no more than budget's allocations and should not commit to any expenditure that has no allocation. In this regard, the Cabinet's decision number 157 dated on 12/9/1420 H. should be applied. In the case of an emergency that cannot be deferred, the matter should be reported to the king according to article 73 of the Basic Law and article 27 of the regulation of the Cabinet.

Afterwards, the king directed that all ministers and heads of agencies to carry out their duties completely and to be keen on administering the approved budget for their departments skillfully and precisely.

The king stressed the utmost importance of implementing the projects perfectly and that the public expenditure increased by the state should accomplish its goal, namely the growth and protection of the national economy and the provision of investment opportunities, work and profit in it, especially that the whole world is passing through a financial and economic crisis that requires all to be vigilant and careful and deal with the capabilities provided by the budget soundly to enhance its results.

The king thanked God for the kingdom's current enjoyment of security, stability, potential and ability.