Saudi probe into alleged $29bn misappropriation |
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Saudi Arabia's government bodies haggled and traded accusations this week over a presumed wastage of a staggering $29bn (Dh106.43bn) in public money in a rare publicised official demonstration of intensifying anti-corruption crackdown in the world's largest oil exporter.
The heated debate between the Shura council (appointed parliament), the General Auditing Bureau (GAB) and other government institutions coincided with moves by the Kingdom to promote itself as one of the world's best and safest investment destinations within a long term diversification programme intended to reduce its reliance on unpredictable oil sales.
The exchange, which appeared to be over-publicised by the Kingdom's official media and newspapers, also came at a time when the country is reeling under a sharp fall in oil prices and production due to the global financial distress after years of fiscal euphoria.
In a strong attack on GAB and other public departments, the Shura said it believed around SAR109bn in public funds had been wasted or misappropriated and demanded the retrieval of that money.
The charges immediately triggered a response from GAB, which rebuffed Shura's claims and clarified the source and destination of those funds. But it acknowledged a sort of mismanagement of those funds.
In a detailed report carried by the official Saudi press agency and local newspapers, GAB said a large part of those funds included loans by the Kingdom's government lending institutions.
It estimated those loans at around SAR44bn and said they had been provided to companies and individuals over the past few years and accumulated by the end of 2006.
"The GAB made this statement while clarifying media reports that said the Shura Council took up the issue of the wastage of SAR109bn of public money. The media reports were based on the bureau's annual report for 2006 that was presented to the consultative body," a Saudi newspaper said.
"The GAB pointed out that unpaid loans to the tune of SAR44bn accounted for part of the SAR109bn public money mentioned in the report. It emphasised the need to step up efforts to recover this huge amount in order to give loans to other deserving beneficiaries."
The loans were paid by the state-owned Real Estate Development FundReal Estate Development Fund
, the Industrial Development FundIndustrial Development Fund and Agricultural Development Fund. Shura members demanded that the head of the bureau should be called in to clarify how the misappropriation of such a huge amount took place and what needed to be done to prevent the waste of public money. The members blamed "lack of proper supervision and investigations" against government departments for the unauthorised spending.
They clarified that government departments had given SR25.30bn to their branches for specific purposes. "In accordance with the law, this amount is to be settled by the end of every year and should not be pushed forward to the next year. Despite the efforts of the bureau and the Finance Ministry, such amounts are accumulating," it said.
Of the total, about SAR25bn was spent by government departments by transferring amounts from one area to another without following budgetary regulations. "This resulted in the non-implementation of several important projects that were on the priority list," GAB said, adding that misappropriations of 50 to 100 per cent were found during 2002 to 2006.
As much as SAR20bn, owed to others, have remained with the state because of different reasons. "We have been instructing all government departments to pay such trust amounts to their owners so that the amounts would not be a burden on the treasury."
The bureau said it had noticed that SAR315m was paid in 2006 in violation of regulations and urged measures to return it to state coffers, adding only SAR31m of the amount had been repaid so far.
By Nadim Kawach
© Emirates Business 24/7 2009
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