Saudi King Salman yesterday ordered extra pay for Saudi Arabian government workers and soldiers this year, after the implementation of a value-added tax 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 yesterday restored an annual pay raise for Saudi civil servants, which was suspended as part of attempts to rein in a hefty public-sector wage bill. King Salman also ordered a 5,000-riyal (US$1,333) bonus for soldiers fighting in the kingdom’s war in Yemen and granted Saudi Arabians 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 value-added tax as well as a substantial increase in electricity tariffs and gasoline prices as of Monday last week.
The measures were part of Saudi Crown Prince Mohammed bin Salman’s plan to raise non-oil revenue and repair public finances strained by low oil prices.
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.
Saudi Arabian Minister of Finance 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 cuts “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 each month for retirees and social benefits recipients, and a 10 percent bump in student allowances. The government is to bear the cost of value-added tax for citizens benefiting from private healthcare and education services
The handouts will cost more than 50 billion riyals, royal adviser Saud al-Qahtani said on Twitter.
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