Wajhat Watan: Ministry of Finance... Accounting Mindset or Economic Mindset?
The annual circular issued by the Ministry of Finance regarding the preparation of budget estimates for government entities for the upcoming fiscal year 2027/2028 is a procedural document, which government entities often do not adhere to. In each fiscal year, these entities request higher budget appropriations than the previous year, reaching KD 26.1 billion this year, despite the Ministry of Finance’s annual calls to curb expenditures, rationalize spending, and boost revenues.
The Ministry of Finance’s problem lies in its accounting mindset rather than an economic one when dealing with the state budget. Its objective—ideally at least—is to reduce or stabilize financial spending and increase public revenues, with the aim of narrowing the budget deficit. While these goals are important—or rather, self-evident—they do not reflect sound economic thinking for a country whose entire economy is tied to oil prices and market fluctuations.
What we need from the Ministry of Finance is not merely to cut annual budget expenditures or raise revenues, which is secondary, but to make the budget a reflection of fundamental economic policies. These policies should create opportunities for tens of thousands of young people in the private sector and small and medium-sized enterprises, expand and diversify the size and output of the economy, and convert state assets into benefits, services, and opportunities. Additionally, the public tendering model should be transformed into partnership projects that leverage foreign expertise and technology.
When budget figures improve as a result of efforts and policies aimed at enhancing the business and investment environment, this reflects an economic mindset characterized by sustainability, future impact, and reform. In contrast, focusing solely on cutting expenses, trimming expenditures, and increasing revenues through fees—without considering social or even economic dimensions—reflects a purely accounting mindset that neither ensures sustainability nor reflects reform policies.
I am aware that accounting thinking is appealing to many officials, as it yields quick, apparent results and requires only a decisive leader who makes decisions without regard for consequences. An economic mindset, however, demands specific policies and implementation measures aimed at addressing structural economic imbalances, so that budget figures become a reflection of reforms with longer-term sustainability and deeper impact on employment, services, business activities, and the economy as a whole. This, apparently, is far from the mindset of the Ministry of Finance, and indeed, of the broader public administration.
