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Bahrain is gearing up for austerity measures



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It is expected that the new parliament in Bahrain will quickly approve the austerity measures the country needs to secure the Gulf aid package, but the Bahraini government can gradually introduce these measures to avoid public anger.

Authorities have suppressed the opposition because they have suppressed Shiite uprising in the country in 2011 with help from Riyadh, fearing riots in Bahrain that could trigger riots among the Shiite Muslim minority in Saudi Arabia.

But Bahrain, which is the cornerstone of US military power in the region, may face a new test of its ability to block opposition protests, subsidies, and pension reforms required by the Gulf donors to avert a debt crisis.

Analysts said the authorities are expected to make changes in phases to avoid protests by opposition forces deemed illegal by Parliament after it was banned from last week's election.

Bahrain, which does not have huge oil wealth as its neighbors in the Gulf, has to cut government spending because its public finances have been hit by declining oil prices since 2014.

The country is trying to cut costs while avoiding public anger over financial reforms.

"The economy will remain the biggest problem in the new parliament," said Jamal Fakhro, Vice President of the Shura Council.

"The new parliament must realize that there are certain problems that can not be postponed because there will be no delay in Bahrain."

Saudi Arabia, Bahrain's main supporter, alongside the United Arab Emirates and Kuwait, offered Manama a $ 10 billion aid package over the five-year period until 2022 to save the government if it continues with fiscal reforms to reach its budget commitment.

Savings from Bahrain are likely to be austerity measures, claiming they are already deprived of state jobs and services, and are considered second-class citizens in a country with 1.5 million people in the United States Fifth Fleet.

Authorities deny any discrimination and blame Iran for causing riots between protesting and security forces that have been bombed. Tehran denies fees.

He described electoral activists as a "humor game" after the authorities dissolved the main opposition groups and prevented their members from participating.

The opposition can use austerity measures to challenge the legitimacy of the new parliament.

"We are studying the call to protest and move the street against savings and new taxes," said Ali al-Aswad, leader of the al-Wefaq opposition, who was dissolved by the authorities and living in exile in London and sentenced in absentia to life imprisonment for spying accusations.

Al-Wefaq, the largest opposition group in Bahrain, once ruled about half of the Bahrain Parliament with about 18 seats in 2010. Opposition groups boycotted the election in 2014.

* Economic pain
Alain Ransom, chief analyst at Control Risks Middle East, said Bahrain may march against rising cost of living, but protests against savings are unlikely to spread. Previous subsidy cuts, introduction of factory tax and VAT approval Main failures.

"The government will try to prevent all violent people's reactions by mitigating the impact on the people of Bahrain," Ransom said. "This may include some support and gradual introduction of austerity measures."

Most candidates during the last week's election campaign have hindered economic reforms as a need to maintain stability.

"Value added tax is linked to political will and is part of our commitment to our values ​​and to everyone's interest," said Jamal Daoud, a Parliamentary Social Media MP.

Bahrain has published a 33-page financial plan last month after signing the Gulf Support Agreement to reform its finances and lift the budget deficit by 2022. Manama expected a budget deficit of $ 3.5 billion in 2018.

Bahrain is expected to receive up to $ 2 billion by the end of the year as the first installment of the aid package after the legislators agreed to apply value added tax in 2019.

The Bahrain Parliament has limited powers, but its bicameral parliament approves the state budget and economic policy.

"The new parliament will take part in every step of the government's fiscal balance program," a government spokesman for Reuters said.

Deputy Prime Minister Ali al-Aradi said the government's plan will be approved in January, as well as the state budget in 2019-2020, which should expect further cuts by April.

Other Gulf states have approved similar subsidies and taxes after the fall in oil prices in 2014.

Elizabeth Dickinson, senior analyst for the Arabian Peninsula in the International Crisis Group, said Bahrain had to adjust austerity measures at a time when revenues slowed down and opportunities were falling.

"These trends are in line with the rising mood among many Bahrains, particularly those that have supported the government in revolt and after 2011, that the pace of economic change and improved social services are very slow," she said.

This content (Arab World Bahrain is about to take austerity measures cautious – Thursday, November 29, 2018) Moved to the Egypt 24 search engine and was transferred as it is from the source (Sunrise portal) and does not reflect the view of the place and policy of liberation, the original publisher is the gateway sunrise.


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