Budget lays groundwork for growth

The Federal National Council (FNC) has endorsed the 2010 federal budget in a move that will strengthen the social and economic development of the UAE and increase its ability to ride out these troubled times for the international economy.

The UAE Cabinet had already approved the record budget of Dh43.6 billion for 2010, up from Dh42.2 billion in 2009. This amount does not reflect spending on infrastructure and other social and economic development initiatives by the individual emirates and other government-related entities.

At a time when global commerce is slowing and private companies are struggling to survive, government spending provides a vital boost to economic activity. The state becomes a vital source of business and income to the companies that provide it with goods and services. Government investment in social and economic development also lays the groundwork for future economic growth by increasing the skills of the workforce and putting necessary infrastructure in place.

Despite some concerns in the FNC about the size of the allocations for health and education, these are substantial investments in the wellbeing of residents of the UAE. The government has said that sufficient funds have been allocated for the needs of most departments.

It is only once departments have ensured that all the funds they received are being used effectively that they should be allocated additional resources. The effective use of funds to provide essential services and better the lives of residents is an important responsibility of government. And, in these difficult economic times, government must be conservative in its spending to ensure the long-term health of the country's economy.

By presenting the federal budget to the FNC for endorsement, the government is showing its commitment to transparency and good governance, in line with the best international standards.