For the very first time in its history, Saudi Arabia has unveiled a series of economic reforms in the form of cuts to salaries, bonuses and perks for its government employees in a bid to slash spending amidst dipping oil prices. Public sector wages accounted for almost half of the government’s spending last year. About two-thirds of working Saudis are employed in the public sector.
A royal order declared that ministers’ salaries would be reduced by 20 percent, housing and car allowances for members of the Shura Council would be cut by 15 percent alongside limited overtime pay and vacation days capped at 30 per year. The decree has also frozen hiring for new positions through the end of the year. Exceptions to the order are soldiers fighting in neighbouring Yemen as part of an 18-month military intervention led by Saudi Arabia.
These measures have come as a rude shock to those employed in the public sector, which for years together, has served as a source of well-paid and cushy jobs. The drop in petroleum prices since 2014 has been a source of financial stress for the Saudi government, given that oil is a major source of income for the country.
In a further bid to overhaul the economy, balance spending and reduce dependency on oil, the government launched “Vision 2030“. This initiative aims to jumpstart the private sector employment by slashing the public sector payroll to 40 percent of the budget by the start of the next decade.
The response to these reforms have, as expected, not been welcoming. People are dismayed, many sharing photos of former King Abdullah and recalling past prosperity, on social media networks.
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