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| Arabia |
| Saudi chops wage, benefit bill in delicate pursuit of austerity |
| 2016-09-28 |
| [IN.REUTERS] A decision to slash ministerial pay by a fifth reflects Soddy Arabia ...a kingdom taking up the bulk of the Arabian peninsula. Its primary economic activity involves exporting oil and soaking Islamic rubes on the annual hajj pilgrimage. The country supports a large number of princes in whatcha might call princely splendor. When the oil runs out the rest of the world is going to kick sand in the Soddy national face... 's resolve to nudge its citizens into tolerating a fall in living standards at a time of low oil prices. Along with reductions unveiled on Monday that will affect all public sector workers, the cuts also flag to financial markets before a debut sovereign bond issue that the oil exporter is committed to budget discipline. The measures appear largely to formalise savings introduced ad hoc in parts of the state apparatus since last year, but their announcement on state media, which gave an official start date of Oct 1., is not without political risk. In a country that has no elections and where political legitimacy rests partly on distribution of oil revenue, the ability of citizens to adapt to reforms aimed at reducing oil dependence and improving self-reliance is crucial for stability. Some Saudis appeared prepared to accept austerity following the signal that ministers would share the pain. "Most of my colleagues are furious, but I see it as normal at such times," said Fahad, 27, a post office worker, who said his monthly take-home pay, including benefits, would fall to 4,800 riyals ($1,280) from 6,000. "The country has given us a lot in the past and it is our duty to show solidarity now." However, denial ain't just a river in Egypt... with about two thirds of working Saudis employed by the state, scepticism surfaced on social media. "The beginning of the end!" tweeted a writer using the name Nashat Haider. "Not a rise in efficiency, it's a rise in poverty" wrote Alsheikhah Madawi. The ruling Al Saud family has often hesitated to enact reforms that may stir unrest among Saudis, but with oil prices stubbornly low, it is now pushing changes to revitalise the private sector, slim the state, and get more Saudis into work. A lack of taxes, a big public sector, subsidised fuel and abundant government spending are benefits that officials have long cautioned are unaffordable, yet are seen as a right by many citizens because of the kingdom's high oil output. But energy prices have plummeted since mid-2014, causing steep declines in income and putting economic growth at risk. It was unclear how far the steps will trim a budget deficit that reached a record $98 billion last year. In any case the wage cuts for ministers and others "of ministerial rank", while unlikely to win big savings by themselves, appear specifically aimed at deflecting public anger by targetting those at the apex of society, economists said. |
| Posted by:Fred |
| #3 Saudi and austerity in the same sentence? Couldn't happen to nicer folks. |
| Posted by: Tennessee 2016-09-28 10:05 |
| #2 Call me when they start collecting for starving Saudis. |
| Posted by: g(r)omgoru 2016-09-28 02:03 |
| #1 Dear Saudi Arabia - please start dumping your Treasury bills & bonds now, ok? Your pal, Raj |
| Posted by: Raj 2016-09-28 00:27 |