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UAE finance minister seeks 5% budget cut: paper

UAE finance minister seeks 5% budget cut: paper.

October 22, 2010 3:10 by

The United Arab Emirates’ finance ministry has proposed a five percent cut in the state’s budget for the next three years to a total 126.3 billion dirhams ($34.4 billion), a local paper said.

Arabic daily Al Ittihad said it obtained a September letter to UAE officials from Obaid Humaid Al Tayer, the minister of state for finance, proposing the reduced budget for the period from 2011 to 2013 as a measure to prevent running a deficit.

On Thursday, the country’s legislature, the Federal National Council (FNC), rejected the proposed budget, Al Ittihad said.

Its secretary general cited the FNC’s right to reject the proposal under the constitution. The FNC has the constitutional right to reject laws, and in the UAE, the federal budget is drafted as a law.

In the past however, the government has passed laws without FNC approval during periods when the legislature is not in session. The president, Sheikh Khalifa bin Zayed Al-Nahayan, would also be able veto the FNC decision.

The Gulf Arab state had previously planned a 2011-13 budget of 132 billion dirhams.

In 2010, the UAE increased its budget by 3.4 percent to 43.6 billion dirhams from its 2009 budget.

(Reporting by Erika Solomon; Editing by Ruth Pitchford)

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