Saudi Takes First Steps To Rein In Bloated Public Sector

Saudi Arabia has cut ministers’ wages, setting the stage for the wide-ranging politically sensitive cuts needed to implement plans to transform the economy.

Saudi Arabia has taken its first steps towards implementation of the National Transformation Program (NTP) designed to reform the kingdom’s economy. Salaries and benefits for government ministers and members of the consultative Shura Council have been cut in a move that paves the way for deeper cuts down the line. The latest measures won’t make a visible dent in the kingdom’s budget deficit, but by starting with the political elite the government will hope that future cuts that impact a wider section of the community will be more palatable.

The Council of Ministers announced on 25 September that King Salman had issued a number of decrees ordering a cut of 20% in the salaries of ministers and officials with ministerial ranks; a 15% reduction in the remuneration for members of the consultative Shura Council; a 15% cut in housing allowances for the council members; and a 15% reduction in transportation allowances for these members over their four-year appointment to the council; these allowances currently cover the cost of purchasing a car, maintenance and fuel. These cuts are due to come into effect with the new Islamic lunar year which starts on 1 October. (CONTINUED - 963 WORDS)