DTIC ADA529256: Saudi Arabian Budgetary Dilemmas pdf

DTIC ADA529256: Saudi Arabian Budgetary Dilemmas

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In 1986, Saudi Arabia experienced widely fluctuating oil markets. The decline in oil prices from a high of $28 a barrel in January 1986 to a low of $8 in mid-year called for a radical restructuring in several areas of the economy and administration. An indication of the seriousness of the decline in the oil market became apparent in March 1986 when the 1986/87 national budget was deferred for at least five months, with public spending continuing at the average monthly level of 1985. In August, 1986, the budget was deferred again because of the difficulty of predicting national revenues at a time of great uncertainty in the oil markets. When the budget was announced on 31 December 1986, it contained a surprisingly high expenditure level of SR 170,000 ($43,335 million), only six percent below that allocated in the previous fiscal year. There were also substantial allocations for capital projects–SR 50,0000 ($13,335 million) and for operations and maintenance–SR 20,000 ($5,335 million).

The OPEC accord reached in Geneva in December enabled the kingdom to set a higher target for oil revenues in 1987 than in fiscal 1985/86. At SR 65,200 million ($17,390), estimated oil earnings are 6.5 percent up, representing more that 55 per cent of total government revenues. The rest will come from investment income, estimated at about $8 billion, and reserves. The budget allows for a deficit of SR 52,700 million ($14,055 million). In the previous budget no deficit was foreseen but a $14,000 million shortfall was incurred. Avoiding borrowing or politically sensitive tax measures deficits will most likely continue to be made up from reserves estimated at around $90 billion

• Creator/s: Defense Technical Information Center
• Date: 1/1/1990
• Year: 1990
• Book Topics/Themes: DTIC Archive, , NAVAL POSTGRADUATE SCHOOL MONTEREY CA, *SAUDI ARABIA, *PETROLEUM INDUSTRY, *AGRICULTURAL ECONOMICS, *BUDGETS, IMPORTS, GOVERNMENT(FOREIGN), REPRINTS

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