UAE plans three-year budgets

The UAE yesterday announced a major revamp to its budget strategy moving away from incremental budgeting.

As a result, the two major changes to the way the nation constructs its financial allocation are that the budget will be every three years and have a "zero-based" format.

"The federal government will apply a medium-term, zero budget for the 2011-2013 period," Obaid Humaid Al Tayer, Minister of State for Financial Affairs, said.

"The aim is to achieve the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to improve the level of government services, follow wise financial policies, develop income resources, satisfy clients and even exceed their expectations," he said.

Younis Khouri, the ministry's Director General, said there is no relation between the new zero budget and global financial crisis or rationalisation of expenditure.

Under zero-based budgeting, individual departments would have to build each three-year budget from the ground up, including approving all expenditures rather than just increases in spending, the ministry said.

"There are clear differences between original budget requests from ministries and approved budgets. But it will mean a lot more work than incremental budgets," it said.

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