Top Government Officials Claim Saudi Arabia May Go Bankrupt

by San Antonio Attorney

A report released by the International Monetary Fund revealed that the cash reserves of Saudi Arabia are going down and its financial resources could only last for five years.  But if there are no tough measures implemented, it may not reach five years.  Top officials of Saudi Arabia have claimed stumpy productivity in its blown up public sector is chomping its reserves.

Khaled al-Araj, Saudi’s minister of civil service, says the government employees hardly work for one hour every day.  This is disquieting considering that two out of three workers in Saudi are government employees.  In contrast, the government employees in the United States only comprise 20% of the country’s total work force.  In 2015, the Saudi used more than 45% of its funds for salaries, $128 billion to be precise.

The minister made the commentary at an official talk about the country’s economy aired at prime time.

Prior to the latest reforms, all of the government employees have major benefits.  The working week is 35 hours, they get bonuses regularly and they cannot be made redundant.

The government sector is distressed by the plummeting price of oil, which is not $50 per barrel.  In 2016, the budget shortfall was almost $100 billion.  The expected expansion in Saudi’s economy for this year is just 1.2 percent.  As a result, Saudi Arabia’s enormous oil reserves, which could be worth around $500 billion, are diminishing at a startling rate.

In the meantime, the public sector has been cutting costs.  The measures includes introducing higher sales taxes, minimizing energy subsidies, fees for pilgrimage visas at $530 per person, and bigger fines for new road.

In September, salaries of top officials were lowered by 20%, their vehicles and phone allowances seized.  Meanwhile, the wages of regular workers were reduced by 11 days’ pay after the administration shifted to the Gregorian calendar.  In addition, the yearly leave has also been limited at 30 days.

The biggest move is probably changing the public sector’s policy in terminating employment of underperforming workers.  Many employees and departments are now required to record their attendance a number of times every day, by swiping their identification cards.

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