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Tue 9 Aug 2011 03:35 PM

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Bahrain okays $862m spending for public wages

Additional budget spending will cover increase in government staff salaries

Bahrain okays $862m spending for public wages
Bahrain has unveiled a number of public spending initiatives since political unrest rocked the state earlier this year

Bahrain, the tiny Gulf state rocked by anti-government
protests in February, approved extra budget spending of BD325m ($862m) to cover
an increase in public sector salaries, the state news agency said.

The additional spending in the state budget would cover the
increase in wages from the financial years 2010 and 2011, BNA reported this

The cabinet approved the draft law in a meeting on Sunday,
amending some provisions of a 2011 law regarding the adoption of the state
budget for the fiscal years 2011 and 2012. It also approved a draft law to
raise the borrowing ceiling to BD3.5bn from BD2.5bn currently.

In May, Bahrain's parliament approved a 44 percent rise in
government spending in 2011-2012 compared to the previous two-year period.

The small non-OPEC oil producer was thrown into turmoil in
February when protesters, mostly from the majority Shi'ite community, took to
the streets demanding democratic reforms in the Sunni-ruled state.

Bahrain's king approved parliamentary reforms in July,
granting more powers of scrutiny to the elected lower house but preserving the
dominance of an upper house appointed by the royal elite. He also ordered a pay
rise for civilian and military government.

In 2010, the island kingdom's budget deficit widened to BD459.7m
($1.2bn) from BD446m in 2009 due to lower oil prices.

Bahrain is the only Gulf state projected to see a budget
deficit in 2011, though robust crude prices are seen alleviating some of the
spending pressure this year.

On Monday, the country's chamber of commerce said the
economy has lost up to $2bn due to the political unrest.

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