A third of Bahrain's new two-year budget will be spent on security, a government minister has revealed.

Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa said 31 per cent of the draft budget was allocated to the Interior and Defence ministries, along with other security organisations, for this year and next year.

However, he stressed that it covered a wide range of public services and did not only mean weapons spending or military training.

'The 31 per cent spending is divided among needed services such as immigration and traffic, which are included in the Interior Ministry,' explained Shaikh Ahmed.

'It also includes recurrent security expenditure and needed projects.'

More than BD1.6 billion is earmarked for security for the next two years, with BD688.74 million going to the Defence Ministry - BD72 million more than in the last budget.

However, specifics on where that money would be spent were not disclosed as Shaikh Ahmed gave a Press conference to announce Bahrain's spending plans at parliament's headquarters, in Gudaibiya.

He also revealed that no decision had yet been taken on whether a BD50 monthly inflation allowance would continue to be paid to needy families, saying it would be debated with MPs.

'We want to come up with a strong budget that benefits the people and that is why we are open to suggestions from parliament, which we hope will present us with good ideas on how to increase our revenue and control our spending,' he said.

'In the end, everyone is looking out for the public's interest - whether it is us in government or MPs and together I believe we can make a difference.'

He added that Bahrain's fiscal policies had so far proven successful, even as the world went through a financial meltdown.

'We opted to increase spending rather than decrease it during the financial crisis and it has paid dividends,' he said.

'The country has seen more achievements over the past two years than in any other year in comparison with other countries, which saw their economies stall.

'In those two years the government pumped in BD427.7 million on top of the allocated budget, which has helped speed up projects that might have been affected and are now ready, faster than expected.'

He said the budget had been drafted based on a predicted oil valuation of $80 (BD30.28) per barrel, up from the $60 valuation used in the 2009-2010 budget.

'Our average estimate per barrel this year is $97 and $100 next year,' he said.

The government plans to spend BD240 million on housing projects and BD116 million on housing services, around BD534 million on health projects and services, up to BD660 million on education services provided by the Education Ministry, Bahrain University, Bahrain Polytechnic, Bahrain Teachers College and other educational authorities and institutes.

Meanwhile, around BD287 million has been allocated for infrastructure facilities, including roads and sewage networks.

Shaikh Ahmed said government subsidies accounted for almost half of planned expenditure, but said the system needed to be amended to benefit those most in need.

'The system will have to be revised considering that everyone is benefiting now, when it should be directed to low-earning Bahrainis,' Shaikh Ahmed added.-TradeArabia News Service