Saudi Arabia canceled bonus payments for state employees and cut ministers’ salaries by 20 percent, its latest steps to rein in a budget deficit that ballooned amid the oil price slump.
The government also curbed allowances for state employees and pared salaries of members of the Shura Council, which advises the monarchy, by 15 percent, the official Saudi Press Agency reported, citing a statement after the weekly Cabinet meeting and royal decrees.
The decision affects bonus payments for the lunar year that ends this month, the agency said.
Under Deputy Crown Prince Mohammed bin Salman, the world’s biggest oil exporter is seeking to tame a budget shortfall that expanded to 16 percent of GDP last year, the highest among the world’s 20 biggest economies. The government has delayed payments owed to contractors and started cutting fuel subsidies as it tries to manage lower oil prices.
“Spending on wages soared as oil prices boomed,” Simon Williams, HSBC Holdings PLC’s London-based chief economist for Central and Eastern Europe, the Middle East and North Africa, said in response to e-mailed questions.
With the deficit set to run above 10 percent of GDP for a second year in succession, “that era is over; wage spending has to be cut,” Williams said.
Lower oil prices and government austerity have started to impact the economy, with growth forecast to slow to 1.1 percent this year, the lowest level since 2009, according to data compiled by Bloomberg. Consumer spending has been hit by government’s efforts to lower the deficit.
Monday’s announcements made no mention of how much the cuts would save. Saudi Arabia was weighing plans to cancel more than US$20 billion of projects and slash ministry budgets by a quarter to repair its finances, people familiar with the matter said earlier this month.
There are also plans to sell the kingdom’s first international bond, which could raise more than US$10 billion, according to people aware of the plans. Authorities set up the National Project Management Office last year to control capital spending and ensure that government projects are carried out efficiently.
“This is clearly a sign to the people that the government is tightening its belt” and that it sees low oil revenues continuing for some time, said Paul Sullivan, an adjunct professor of security studies at Georgetown University in Washington.
“It may prompt some to move to the private sector, but don’t expect an exodus out of higher paying solid government jobs to riskier, lower paying private-sector jobs,” he said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day