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Bahrain okays $862M extra spending for public wages
Additional spending to cover higher public wages; Cabinet ups borrowing ceiling to 3.5 bln dinars
August 9, 2011 2:23 by Reuters
Bahrain, the tiny Gulf state rocked by anti-government protests in February, approved extra budget spending of 325 million dinars ($862 million) to cover an increase in public sector salaries, the state news agency said.
The additional spending in the state budget would cover the increase in wages from the financial years 2010 and 2011, BNA reported this week.
The cabinet approved the draft law in a meeting on Sunday, amending some provisions of a 2011 law regarding the adoption of the state budget for the fiscal years 2011 and 2012. It also approved a draft law to raise the borrowing ceiling to 3.5 billion dinars from 2.5 billion currently.
In May, Bahrain’s parliament approved a 44 percent rise in government spending in 2011-2012 compared to the previous two-year period.
The small non-OPEC oil producer was thrown into turmoil in February when protesters, mostly from the majority Shi’ite community, took to the streets demanding democratic reforms in the Sunni-ruled state.
Bahrain’s king approved parliamentary reforms in July, granting more powers of scrutiny to the elected lower house but preserving the dominance of an upper house appointed by the royal elite. He also ordered a pay rise for civilian and military government.
In 2010, the island kingdom’s budget deficit widened to 459.7 million dinars ($1.2 billion) from 446 million in 2009 due to lower oil prices.
Bahrain is the only Gulf state projected to see a budget deficit in 2011, though robust crude prices are seen alleviating some of the spending pressure this year.
Analysts polled by Reuters expected a deficit of 0.7 percent of gross domestic product in 2010 and 1.4 percent in 2011.
On Monday, the country’s chamber of commerce said the economy has lost up to $2 billion due to the political unrest. ($1 = 0.377 Bahraini Dinars) (Reporting by Martina Fuchs; Editing by John Stonestreet)