Page 313 - Records of Bahrain (7) (ii)_Neat

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Economic and financial affairs 703
C/ONLMDKNTJ Ah
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capital works in I(J60 is allocated J.'or the deep-water harbour;
tuid over 'jO'/u of the budgeted expenditure in on capital works,
vdiicji leave in their train an increased recurrent bill.
Kecurrent expenditure in i960 shows an increase or £l|27,!>00
over recurrent expenditure in 1959.
5. I entirely agree with Mr. smith's view that the Bahrain
Government should, Tor any future large capital works, act aside
a capital account and not try to pay for them out of current
revenue. But the buhruin Government would be well advised
to put off any further large capital works until those in haad
at present are completed and firmer view of the Government's
recurrent commitments becomes possible. I regret that it lias
not been possible to l.eruuude the idj'ler of Bahrain to accept
our offer to carry out ari economic survey of his tttutc, on* the

results of which it would huvo (been possible for the Bahrain
Government to frame a (financial! policy for the future, At
present there is no budgetary policy tailing into account a
balunccd view of the requirements and resouroos of the Gtato.
I intend to continue t press upon the kuler and Government
,of Bahrain the advantages of an economic survey and policy
* and I hope that the report which!sir Brie Ivlillbourn is
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preparing on the operation of the deep-water harbour will, in
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putting before the Bahrain Government the economic consider­
ations involved in running u port, bring homo to the'Hulor
and his Government the folly of conceiving and carrying out
capital projects without a proper economic appreciation and
persuade them of the urgent need for an economic sur*voy.

o, 1 am sending a copy of this despatch to Her Majesty's
Political Agent at Bahrain, to the Head of the Development

/Division

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