Bahrain stands out amongst Gulf Cooperation Council (GCC) countries by issuing budgets for two fiscal years consecutively. Reference is made to last week’s release of basic statistics relating to budgets of 2013 and 2014.

Notably, the authorities continue overlooking calls for altering the practice by opting for a single year budgeting, a practice prevalent in many parts of the world. Those calling for change cite inability of predicting oil prices and steady turbulent economic conditions worldwide amongst other reasons.

For their part, officials put forward powerful arguments for the two-year budgeting practice like that of providing private sector investors a clear picture of directions of governmental spending over two years. This places pressures on the authorities to make good on promised spending levels.

Much to their credit, officials have developed a tradition of releasing key budget details ahead of start of the fiscal year, as per statutory requirements. Thus, primary details relating to budgets of fiscal years 2013 and 2014 were made public recently.

The appropriated expenditures tell a great deal about government intentions. The figures stand at $9.15 billion (Dh33.65 billion) in 2013 and $9.4 billion in 2014. These statistics compare favourably with those of $6.9 billion and $7.16 billion set aside for 2011 and 2012, respectively.

Still, additional spending is expected from financial aid promised by fellow GCC countries, something not recorded in the budget. In 2011, the GCC as an entity agreed to provide $10 billion of financial aid to Bahrain and Oman each over a span of 10 years to help them with overcoming socio-economic and socio-political issues.

Not surprisingly, Kuwait assumed leadership of granting Bahrain its share of $2.5 billion over a span of 10 years. Starting from fiscal year 2013, Kuwait has signed a deal with Bahrain for providing an amount $250 million for financing numerous development projects including construction of housing unit, road expansion, and upgrading of utilities, to name a few.

Still, additional amounts are being worked for other projects for 2014 and beyond with priorities for housing and utilities. Kuwait has a track record of providing financial assistance to Bahrain.

What’s more, cash injection from Kuwait should help making up for limited appropriations planned for development projects. Bahrain officials have set aside a mere $1.6 billion for development schemes in each of 2013 and 2014. This translates into setting aside about 78 per cent of total spending for recurrent programmes notably salaries of public sector employees.

One such characteristic of Bahrain’s budgets for the next two years relates to being heavily reliant on contributions of the petroleum sector. As such, despite all talks about economic diversification, the country’s treasury remains at the mercy of developments in the oil markets.

The petroleum sector, including crude oil and refined products such as diesel, is projected to constitute around 86 per cent of total treasury income both in 2013 and 2014, effectively no different from the earlier two fiscal years.

In contrast, the petroleum sector accounted for 76 per cent of budgetary sources in 2009 and 2010. These facts suggest that Bahrain’s economy is becoming more rather than less dependent on petroleum sources.

The other notable feature of 2013 and 2014 budgets concerns the leading role played by the public sector in the local economy. Total governmental spending makes up about one third of the country’s gross domestic product (GDP) of $26 billion.

Again, this fact runs against a primary goal of Vision 2030, in turn aimed to strengthening private sector’s position in the economy. Clearly, the authorities need to revisit the vision’s principles.

The writer is a Member of Parliament in Bahrain.