Global General

Dubai seeks to cut govt spending by 20-25%

(Xinhua)
Updated: 2011-05-21 07:10

DUBAI - Dubai's government is asking its departments to reduce expenditure by 20 to 25 percent in a bid to help achieve a budget surplus up to 3.5 billion dirhams (about $953 million) by 2013, a local daily reported Friday, citing a member of the sheikhdom's Supreme Fiscal Committee.

"Fiscal prudence comes as the government looks to do some trimming of its own after running up deficits to the Dubai budget 2011," Gulf News quoted Ahmad Humaid Al Tayer as saying.

"Thus to fill the resulting financing gap, expenditure by government bodies in Dubai should be cut by 20 to 25 percent until 2013," he added.

However, Al Tayer urged government departments not to increase their revenues by charging more fees or indirect taxes for the services they provide.

"There is a persistent need to restructure and merge operations of several government entities, departments and commissions to reduce government expenditure in general," he said.

According to the budget for 2011, the Dubai government expects to generate 29.9 billion dirhams (about $8.15 billion) in revenue against expenditure of 33.6 billion dirhams (about $9.16 billion), leaving a deficit of 3.77 billion dirhams (about $1.03 billion).

But Dubai is not concerned about the budget shortfall and is looking for "alternative revenue streams," Al Tayer noted, saying: "It is a precautionary procedure."

He also called for the establishment of an institution to manage the public debt in Dubai, Gulf News said.

According to a report published earlier this year by Credit Suisse Group, Dubai and its state owned companies carry at least 129.3 billion dollars of debt in total.

The emirate and its state owned companies have $17.5 billion of debt falling due this year, $17 billion in 2012, $9.7 billion in 2013 and $26 billion in 2014, the report said. Another $12.8 billion matures in 2015.