Saudis Get Extra Pay After Price Surge Sparks Public Complaints
By Vivian Nereim
January 5, 2018, 7:02 PM EST
https://www.bloomberg.com/news/artic...lic-complaints
Royal orders restores annual pay raise to government workers
Also orders 1,000-riyal monthly ’cost of living’ allowance
King Salman ordered extra pay for Saudi government workers and soldiers this year after the implementation of value-added taxation and a surge in fuel prices stirred grumbling among citizens, highlighting the kingdom’s struggle to overhaul its economy without risking a public backlash.
Royal orders issued early Saturday restored an annual pay raise for Saudi civil servants, suspended as part of attempts to rein in a hefty public-sector wage bill. The monarch also ordered a 5,000-riyal ($1,333) bonus for soldiers fighting in the kingdom’s war in Yemen and granted Saudis working for the state an extra 1,000 riyals a month as a “cost of living” allowance for a year.
Saudi citizens, including some prominent writers, took to social media and television to complain about rising prices after the introduction of a 5 percent VAT as well as a substantial increase in electricity tariffs and gasoline prices as of Jan. 1. The measures were part of Crown Prince Mohammed bin Salman’s plan to raise non-oil revenue and repair public finances strained by low oil prices.
Read more: Saudi Arabia looks to post-oil age in great makeover: QuickTake
The handouts show how hard it is for Saudi rulers to overhaul a decades-old social contract based on government largesse for political loyalty, even after Prince Mohammed, 32, tightened his grip on power to emerge as the kingdom’s predominant leader. Last year, King Salman also reversed cuts to public sector salaries.
Finance Minister Mohammed Al-Jadaan, appearing on state television to explain the reasons behind the price increases, struggled to keep up with repeated questions over the impact on citizens. Calls for the return of annual pay raises for public sector workers were persistently trending on social media.
King Salman said he issued the orders after Prince Mohammed, his son and heir, explained that the recent measures “would increase the burden on some citizens,” according to the royal decree published by the official Saudi Press Agency.
The orders also included:
500 riyals extra a month for retirees and social benefits recipients
10 percent bump in student allowances
The government will bear the cost of VAT for citizens benefiting from private healthcare and education services
The handouts will cost the state more than 50 billion riyals, Saud Al-Qahtani, an adviser to the royal court, said on his Twitter account.
— With assistance by Nadeem Hamid
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