THE first thing to be noted about Saudi Arabia's budget for the fiscal year 1434-35H (2013), unveiled on Saturday, is that this is the largest-ever annual budget in the Kingdom's history. No less important is its emphasis on human capital development and creation of more job opportunities for Saudis. No doubt, the budget would help achieve sustained and balanced development in all sectors and improve the living condition of citizens. There is continued focus on development in vital sectors such as education, health, security, social and municipal services, water and sanitation, roads, electronic transaction and scientific research. This was only to be expected given Custodian of the Two Holy Mosques King Abdullah's emphasis on accelerating the process of development and creating an investment-friendly environment and his desire to invest more in the country's human resources. Budget allocations show the government is aware of the disturbing unemployment rates in the country. The number of jobless Saudis has been estimated at some 1.5 million. This is only part of the problem. The other part is that more and more boys and girls are entering the job market. An increase of 21 percent in the allocation for education has to be viewed in this context. The budget outlay for education now stands at $54.3 billion. If Saudization which means locals taking over the jobs now being done by more than seven million foreigners is to be successful, locals should have the training, technical and others, to take up the new challenges. Huge spending on health sector would make available highly advanced medical facilities and improved medical services to citizens and expatriates. The budget projects revenues of SR829 billion or $221 billion for the next year and SR820 billion or $219 billion of expenditure. This foresees a surplus of SR9 billion ($2.4 billion). The Cabinet meeting on Saturday reported that revenues in 2012 amounted to $330 billion with $227 billion expenditure, leaving a $103 billion surplus. This surplus was due to the fact that the government calculated oil prices at $70 per barrel, while the actual price stood at around $100. The Kingdom has always proceeded on the assumption that high oil prices are unsustainable in the long run. The same prudence can be seen in the government's management of other aspects of the economy. This is why government intervention in the economic and financial system has had a positive effect in Saudi Arabia unlike in some other countries. Saudi economy is expanding on all fronts because of a $130 billion stimulus package announced early last year. Even the International Monetary Fund is glowing in its assessment of Saudi economy. The Fund has commended the Kingdom for investing oil revenues to achieve local development objectives and noted in this context a number of initiatives Saudi government has taken to address pressing social issues such as unemployment among nationals, housing shortages, etc. Preliminary economic data show that 2012 was a healthy year for the economy with a real GDP growth of 6.8 percent. Although the economy is booming, the government is aware that this has driven up the prices for food and fuel. In June, inflation hit a 30-year high of 10.6 percent, mainly because of increases in food and housing costs. Allied to this is the fears of a widening gap between the rich and the poor. Another worry concerns nonoil private sector. It has maintained a strong growth of 7.5 percent year-on-year but some analysts believe this could be slowing.
