It took less than a week of Saudis grousing on social media and TV for authorities to announce they’d plow billions of riyals into people’s pockets to help offset government-initiated price increases.
World | (C) 2018 Bloomberg L.P. | Glen Carey, Vivian Nereim, Zainab Fattah, Bloomberg
King Salman on Saturday ordered extra pay for Saudi government workers and soldiers.
Saudi Crown Prince Mohammed bin Salman’s high-speed U-turn on state handouts suggests he’s betting on the backing of ordinary citizens rather than traditional pillars of support as he consolidates power.
It took less than a week of Saudis grousing on social media and TV for authorities to announce they’d plow billions of riyals into people’s pockets to help offset government-initiated price increases. That sidestepped a mainstay of the prince’s plan to revamp the economy in part by weaning citizens off government largesse, indicating that consistency in fiscal policy isn’t his top priority right now.
During his swift rise to power, the kingdom’s 32-year-old de facto leader has swept aside rivals, arrested senior royals and billionaires – including 11 princes detained on Thursday – and defied the ultra-conservative religious establishment by letting women drive. That’s left him reliant on those Saudis eager for social change but struggling with austerity measures needed to achieve his vision of turning Saudi Arabia into a global investment hub no longer reliant on oil.
“The crown prince can’t afford to alienate his young constituency,” said Fawaz Gerges, a professor of international relations at the London School of Economics. “It’s not just about economic reforms. It’s also about the consolidation of the new leadership’s social base and the opposition from very entrenched interests by some members of the royal family.”
King Salman on Saturday ordered extra pay for Saudi government workers and soldiers this year after the Jan. 1 introduction of value-added taxation and a surge in fuel prices stirred grumbling among citizens. The cost to the state: more than 50 billion riyals ($13.3 billion), Saud Al-Qahtani, an adviser to the royal court, said on his Twitter account.
Saudis privately expressed mixed feelings about the about-face, with some overjoyed, and others finding it too stingy or worried about its limited duration. Some said the sudden swerve – one of several since the prince announced his Vision 2030 blueprint for reordering the economy nearly two years ago – made them question the government’s strategy.