Sun, Feb 21, 2016 - Page 9 News List

Young Saudis see cushy jobs vanish along with nation’s oil wealth

As oil prices slump, the future for young Saudis could mean lower pay, hard work and less security

By Ben Hubbard  /  NY Times News Service

Illustration: Lance Liu

In pressed white robes and clutching crisp resumes, young Saudi men packed a massive hall at a university in Riyadh this month to wait in long lines to pitch themselves to employers.

It was one of three job fairs in the capital in two weeks and the high attendance was fueled in part by fear among the younger generation of what a future of cheap oil might mean in a nation where oil is everything.

For decades, the Saudi royal family has used the kingdom’s immense oil wealth to lavish benefits on its people, including free education and medical care, generous energy subsidies and well-paid (and often undemanding) government jobs. No one paid taxes, and if political rights were not part of the equation, that was fine with most people.

However, the drop in oil prices to below US$30 a barrel from more than US$100 a barrel in June 2014 means that the old mathematics no longer works. Low oil prices have knocked a chunk out of the government budget and now pose a threat to the unwritten social contract that has long underpinned life in the kingdom, the Arab world’s largest economy and a key US ally.

The shift is already echoing through the economy, with government projects delayed, spending limits imposed on ministries and high-level discussions about measures long considered impossible, like imposing taxes and selling shares of Saudi Aramco, the state-run oil giant that is estimated to be the world’s most valuable company.

The proposal announced on Tuesday last week by the oil ministers of Saudi Arabia, Russia, Qatar and Venezuela to freeze output levels is one attempt to stabilize world oil prices, but it remained uncertain how effective it would be if other nations, like Iran and Iraq, declined to follow suit.

For younger Saudis — 70 percent of the population is under 30 — the oil shock has meant a lowering of expectations, as they face the likelihood that they will have to work harder than their parents, enjoy less job security and receive fewer perks.

“For the older generation, it was easier,” said Abdulrahman Alkhelaifi, 20, during a break from his job at McDonald’s. “They’d get out of university and get a government job. Now you need an advanced degree.”

Of his generation, he said, “The weight is on our necks.”

It is hard to overstate the importance of oil in the development of modern Saudi Arabia. In decades, it rocketed a poor, mostly rural nation to affluence, with most of its 21 million citizens now living in cities festooned with skyscrapers and streets filled with SUVs. Oil wealth also allowed the ruling Al Saud family to maintain its grip on power, wield clout abroad through checkbook diplomacy and invest billions of dollars in promoting an austere interpretation of Islam around the world.

The oil boom over the past decade helped all of this and was good for Saudis at home. Household incomes rose and the number of men and women pursuing higher education multiplied, but the fat years left the economy poorly structured, economists said: 90 percent of government revenues are from oil; 70 percent of working Saudis are employed by the government; and even the private sector remains heavily dependent on government spending.

Nor did advances in education create a large professional class or inculcate a culture of hard work. Most of the nation’s engineers and healthcare workers are foreign and many government employees vacate their offices midafternoon, or earlier.

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