The UAE, Saudi Arabia and Kuwait have pledged $10 billion (Dh367bn) in financial support for Bahrain's reforms package that aims to eliminate the kingdom's budget deficit by 2022.
Bahrain announced the details of its Fiscal Balance Programme on Thursday as the UAE Minister of State for Financial Affairs Obaid bin Humaid Al Tayer, Saudi Finance Minister Mohammed bin Abdullah Al Jadaan and Kuwaiti Finance Minister Nayef Al Hajraf arrived in Manama for the signing of the support agreements.
Crown Prince Salman bin Hamad Al Khalifa thanked the ministers for their countries' continual support for Bahrain when he received them at the Gudaibiya Palace, the Bahrain News Agency reported.
"The support reflects the deep-rooted historic relations and represents an ideal example of true brotherhood as the UAE, Saudi Arabia and Kuwait have proven, through years and in multiple stances, that we have one economy and renaissance should be one," the crown prince said.
Bahrain's Fiscal Balance Programme, drawn up after a thorough review of government spending, aims to achieve annual savings of 800 million Bahraini dinars (Dh7.8bn). It builds on previous fiscal consolidation efforts that yielded annual savings of 854m dinars during 2015-2017, the BNA said.
The kingdom's finance ministry said the programme was centred on six pillars designed to align non-oil government revenues with economic growth. These include reduction in public expenditure through six dedicated government task forces; a voluntary retirement scheme for government employees; balancing the Electricity and Water Authority expenditures and revenue to make it self-sufficient by 2022; streamlining the distribution of cash subsidies to citizens; ensuring spending efficiency and strengthening accountability within government departments; and simplifying government processes and increasing non-oil revenues to drive economic growth.
The government will also set up units to monitor spending, streamline processes, and increase transparency and efficiency in government, the finance ministry said. These include internal and central government procurement units within the ministry and a new debt management office.
Bahrain's economy has been hit by the drop in oil prices since 2014, and its budget deficit is expected to reach $3.5bn this year, down from about $5bn in 2017. The kingdom requires $20bn to balance its books and the government will provide half of that figure, according to Khalid Al Rumaihi, executive director of Bahrain's Economic Development Board.
Bahraini Finance Minister Sheikh Ahmed bin Mohammed Al Khalifa said the fiscal reform programme "secures the foundations of an economy that affords even more opportunity, more jobs, and greater living standards for the kingdom's generations of today and tomorrow".
Speaking after the signing of the support agreement, the Sheikh Khaled bin Abdulla Al Khalifa, Bahraini deputy prime minister and chairman of the ministerial committee for financial affairs, said: "Our Fiscal Balance Programme combined with the Financial Support Agreement from Saudi Arabia, the UAE and Kuwait allows for a swift and achievable consolidation programme that balances fiscal sustainability with continued economic growth and prosperity."
The UAE, Saudi and Kuwaiti ministers had earlier on Thursday travelled to Amman to sign agreements worth a combined $2.5bn to help Jordan revive its economy.
The three countries deposited more than $1bn in Jordan's central bank on Thursday as part of the package, with $333.3m each from the UAE and Saudi Arabia, and $500 million from Kuwait, according to a government statement.
The Gulf nations were delivering on promises of assistance made during a summit held in Mecca in June as Jordan was experiencing nationwide protests over economic conditions, government austerity measures and a proposed income tax.