Saudi Arabia, Kuwait, UAE to sign $10 billion Bahrain aid deal — report
Saudi Arabia, Kuwait and the United Arab Emirates will soon sign an
agreement to provide up to $10 billion of financial support to Bahrain,
Kuwait’s Al Rai newspaper said on Thursday, quoting an unnamed Gulf
diplomatic source.
The agreement will be signed in Bahrain after the ministers complete
their current visit to Jordan, where they are concluding a financial aid
deal for that country, the newspaper reported.
“A Gulf decision at the highest levels was taken to start the execution
steps for a program to support the financial stability of Bahrain,” the
diplomatic source was quoted as saying.
Bahrain’s international bond prices and currency have come under
pressure this year as the kingdom runs fiscal and current account
deficits partly caused by low oil prices.
Saudi Arabia, Kuwait and the UAE, which are diplomatic allies of
Bahrain, announced in June that they were in talks on a major aid
package for the kingdom that would be linked to its progress in
reforming its finances.
Sources in Bahrain told Reuters last month that the government planned
to push reforms through parliament before Nov. 24 elections to the
assembly. These include the imposition of value-added tax and changes to
the pension system,
Al Rai did not give details of the aid package. Sources previously told Reuters that it would extend over several years.
A $10 billion package would be worth about a quarter of Bahrain’s annual
gross domestic product and 28 percent of public debt, and cover over
two years of state budget deficits according to International Monetary
Fund projections.
It would put no significant strain on the combined finances of Saudi
Arabia, Kuwait and the UAE, which have hundreds of billions of dollars
in their sovereign wealth funds and with Brent oil trading above $80 a
barrel, have seen their own deficits narrow sharply or disappear in
recent months.
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