(MENAFN- Khaleej Times) With the oil prices plunging, the oil producing GCC nations may face the fiscal policy challenges, a top goverment official said.
They have to promote diversification into non-oil sectors in order to reduce dependence on hydrocarbon-related revenues.
"This is made possible through investments in infrastructure projects, which are critical to fuel expansions in vital sectors of the non-oil economy, including tourism, transport, manufacturing, finance, services and trade," said Hamad Al Hurr Al Suwaidi, chairman Department of Finance Abu Dhabi, while opening the 7th annual meeting of the Organisation for Economic Cooperation and Development, or OECD.
Al Suwaidi stressed the need to address key economic challenges as well as support sustainable economic and social growth through the continuous improvement of public financial management systems, financial policies and corporate governance standards. Over 70 representatives from 15 member countries of OECD and the Mena region, in addition to a number of experts and representatives from the World Bank and the International Monetary Fund (IMF) are attending the two day event. The participating countries included the UAE, Czech Republic, Sweden, Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Palestine, Qatar, Tunisia and Yemen. The meeting is being held to support communication and the exchange of knowledge between senior budget officials from OECD, providing a platform for attendees to discuss financial policies, best practices in the preparation and implementation of the general budget, in addition to the initiatives, innovations and experiences of OECD member countries and the World Bank and International Monetary Fund's contributions.
The chairtman said: "GCC governments have to strike a fine balance € the balance between spending for economic growth, social considerations and environmental concerns, and the balance between providing for the present generation and the many future generations to come. This requires finding financial management and government budget solutions that meet the political, social, economic and administrative complexities of each country."
"There are other key challenges that must be tackled. It is inevitable that a large portion of budget expenditure is allocated to the social sector, given the growing youth population, and the need to generate employment, meet rising housing demands and deal with food inflation, means that addressing social challenges in all forms is a key priority. Additionally, a large part of the spending should be allocated to sectors such as education, healthcare, infrastructure and housing," the chairman said.
He also highlighted the importance of adopting the latest government resource management technologies , which are essential to the accurate evaluation of assets, liabilities and costs, and to enhancing the auditing, transparency and analysis of public spending. The first day of the meeting included numerous sessions. The first session covered budgeting updates for the Mena region.
Abdul Aziz Al Youssef, Budget Director at DoF-Abu Dhabi covered important developments in public financial management across the Emirate during the second session, entitled 'Country Presentation: Budgeting in Abu Dhabi'. This was followed by a review of the budget's performance from Mohamed Mussalam Al Mazrouei, Division Manager, Security and Government Administration, Budget Department at DoF, and Dr. Hazem El Khatib, IT Director at DoF, discussed the Abu Dhabi ERP and the Enterprise IT systems.
The third session covered the 'Public Governance of Infrastructure Projects', and the fourth session featured a presentation about 'Integrating the medium-term perspective into the ordinary budget process'.
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