01 January 2012

SAUDI ARABIA has set aside SR250 billion ($66.66 billion) from the 2011 budget surplus to fund one of its special projects, the construction of 500,000 homes.

Announcing next year’s state budget last month, the finance ministry said the kingdom will achieve a budget surplus of SR306 billion ($81.6 billion) this year. It projected the budget surplus, which depends largely on oil revenues, would shrink to just SR12 billion ($3.2 billion) next year.

Saudi Arabia plans to spend SR690 billion ($184 billion) in 2012, cutting expenditure from an estimated SR804 billion ($214 billion) last year, when social spending was ramped up in an effort to ensure political stability.

The ministry’s 2012 spending plan showed authorities would continue to spend heavily on welfare. It included funds to build 742 schools and 137 hospitals, a 13 per cent increase in education spending to SR168 billion ($44.8 billion), SR1.1 billion ($293 million) earmarked for technical and vocational training, SR87 billion ($23 billion) for health and social development, SR58 billion ($15.5 billion) for water, industry, agriculture and infrastructure, SR35 billion ($9.3 billion) for transport and communication and SR29 billion ($7.3 billion) for municipal services.

The 2012 spending plan also includes funds to complete new university campuses and vocational and technical training projects, and build new sports cities and social care centres. In addition, SR265 billion ($70.7 billion) has been allocated for new development projects as well as to complete the existing projects. The budget will also support the welfare projects worth over $100 billion announced in March 2011.

Custodian of the Two Holy Mosques King Abdullah has given the go-ahead to the finance minister to allocate funds from the surplus of 2011 to pay for housing projects and increase the capital of Public Investment Fund to cover the cost of the Haramain Railway.

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