Dr. Ibrahim bin Abdulaziz Al-Assaf, Minister of Finance, said that the chairmanship of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud of the cabinet session which approved the state's budget yesterday after being discharged from hospital is a good omen for our homeland.
In an interview with Saudi TV on the occasion of the issuance the state's budget for the new fiscal year 1434/1435H, Al-Assaf said the new budget came as an extension of previous developmental plans, focusing on the vital sectors of the national economy including education, health, infrastructure and social services and strengthening financial institutions. We have witnessed large increases in these vital sectors, he commented.
The minister added that there is a significant growth on funding of education. Although the size of previous expenditure on education was high but this year it was higher. In fact, next year it will rise at a rate of 21% as comparerd to current year. The education will constitute 25% of the government spending, considered among the highest in the world. Similar highs will be seen on health sector and others.
Al-Assaf added that highest sector in the growth rate, not in size, is the municipal sector, pointing out that there are dozens of municipalities in the Kingdom providing direct services to citizens. Therefore, the appropriations of the municipal services, including asphalting and storm water drainage system were increased.
He attributed allocation of 37% of the budget to education, health and social services worth SR304,000,000,000 to the importance of these sectors. 'Education is the basis of investment in any country, and investment in human resources is the permanent investment which has continuing outcomes,' Al-Assaf said.
With regard to diversification of non-oil income sources, Dr. Assaf asserted that petroleum is still the dominant sector in terms of the state's revenues, yielding around 90% of the total income. Sometimes this percentage is less, depending on the size of oil revenues, he said. On the other hand, other revenues are growing, ranging from 10 - 12%, considered among the highest compared to other oil exporters. However, oil revenues remain the dominant source of income, he stated.
Minister of finance revealed a tendency to increase non-oil revenues.
On social insurance, he said all Zakat (alms) revenues were allocated for that purpose together with government aid.
Quoting Statistics and Information Department figures, Dr. Assaf added that the private sector's contribution to the national economy surges year after year to reach a record high of more than 50% this year.
He said the oil sector fell by 5.5%, noting that the private sector contributes 58% to the national economy size, noting that Saudi private sector size is bigger than other Arab economies.
Al-Assaf said the work is not only through the financial policies but also through investment in infrastructure, human resources, and others. As a result of continuing reforms, Saudi Arabia is now one of the main stations foreign investors are resting while maneuvering for investment in the world.
On the State's debt, he said the Kingdom is running its debt with the most possible professionalism, noting that the situation is good and satisfying.
He defended the policy of pegging the Saudi Riyal to the U.S. dollar as helping the Kingdom very much according to testimonies of international institutions, defying allegations that such pegging caused increase of prices of imported goods and stating that other reasons and circumstances like drought have caused the price hikes.