Mechanisms for activating development plans

The Kingdom has been preparing five-year development plans since 1370 AH (1970). An independent ministry was established for this effort, and all government agencies were tasked with cooperating with it. Despite the need for such an effort in a developing country where the government allocates no less than 45 percent of the total national income, which necessitates the importance of planning for the Saudi economy, the observer notices that the performance of the plans is less than hoped for, which constitutes an economic burden on many government agencies and an additional cost to the national economy, as all agencies are required to fill out the special forms for the plan and answer all inquiries from the Ministry of Planning, I mean the Ministry of Economy and Planning. In order to theoretically determine the budget of each government agency based on that, at the same time, each government agency is obligated to discuss its budget with the Ministry of Finance and prepare for it in a way that may be different from what was submitted to the Ministry of Planning, and the budget of government agencies is usually approved away from what was specified in the development plan. We find at the end of the plan that actual spending exceeds the plan by no less than double, in some plans, and at varying rates for economic sectors. This duplication of work constitutes economic costs borne by the national economy, despite the integration of the economy with planning and the Ministry of Finance remaining alone to address this imbalance, which is not enough and did not touch on the real causes of the problem. Successive plans have also failed to predict many of the problems facing the Saudi economy, such as unemployment, poverty, and the absorptive capacity of the education and health sectors… etc… until they emerged to become the goals that the plans seek to address.

The development plan suffers from stagnation and inflexibility, as work to prepare the plan begins no less than two to three years before the year of implementation. It is completed approximately one year before the first year of the plan due to the need to submit it to government agencies, the Council of Ministers, the Shura Council, and the Supreme Economic Council… for approval, after which implementation begins, and during the implementation period, which takes five years, the plan is not changed or modified, even if the world turns upside down! Because any change requires going through all the previous authorities, which takes no less than a year to obtain the approvals of those authorities. In other words, the centralized system followed in government agencies represents a developmental obstacle (as discussed in a previous article), so the ministry is required, after obtaining approval for the plan, to make the necessary annual update to interact with local and global economic variables, provided that the update is published on the ministry’s website, and the plan period is amended as I suggested in last week’s article.
The plan’s obligation and linking it to the budget for the relevant authorities is a necessary condition for its success, but it is noticeable that many government agencies do not adhere to implementing the plan, and there is also a difference between what is planned and the annual budget, as the budget has become the real guide to the economy and the role of the plan is secondary in guidance. One of the most important reasons for this is the weakness of the Ministry of Economy and Planning compared to the Ministry of Finance. To address this defect, the Ministry of Economy and Planning should be transformed into a research and studies department and attached to the Supreme Economic Council so that plans and their role in distributing government agencies’ budget allocations are imposed and monitored through the council.
The plan must be realistic, accurate, credible, and free from exaggeration and idealism. These are essential for the national economy to benefit and gain the trust of the private and public sectors. This requires developing a comprehensive plan that takes into account the available potential, after studying the current economic reality with credibility and self-criticism, and not neglecting the economy’s tendency to rely on the private sector, which in turn relies on the development plan as a guide for its activities and investment decisions if the plan is credible and realistic. The plan is a tool for economic and social change. In order for all parties to interact to achieve the plan’s objectives, it must avoid exaggeration and idealism, and be built in light of the financial and natural resources actually available to the economy.