King Abdullah of Saudi Arabia has committed to SR 40 billion ($10.7 billion) in spending to boost housing, along with funds marked for social welfare and education, in response to the protests occurring across the Arab region.
The budget for social security was increased by SR 1 billion, as stated on a government TV station. According to official statements, King Abdullah has also ordered that 1,200 supervisor jobs in Saudi be created and instigated a 15 percent allowance to cover the cost of living for public sector employees.
As political uprisings spread across the region, Saudi Arabia, the largest global oil supplier, has pushed through massive social spending. The governments of Yemen, Bahrain and Libya are cracking down on activists and oppositions that are crying out for better employment opportunities and an open political system after the Tunisian and Egyptian leaderships toppled.
In a recent phone interview to Bloomberg chief economist for Banque Saudi Fransi, John Sfakianakis stated that the governments are attempting to broaden the benefit pool for the society in response to the events in the Middle East region.
In Saudi Arabia the Tadawul All Share Index climbed 1 percent to reach 6,337.37, the first increase seen in nine days.
King Abdullah has been abroad for three months obtaining medical treatment and only recently returned to Riyadh, according to state TV. Saudi Press Agency reported that King Abdullah, who is 86 years old, was in the U.S. for medical treatment on his back injury and then traveled to Morocco back in January for physical therapy and recuperation.
King Abdullah has also pardoned some debtors who have been in jail and made an announcement that Saudis who are out of work will receive financial assistance for up to 12 months, as reported by state TV.
Saudi, along with other oil producing nations in the Persian Gulf, are investing petrodollars in employment creation programs and bids to attract investors. This contrasts with the tight government resources seen in Jordan, Yemen and Egypt.
A chief economist at National Commercial Bank in Jeddah, Jarmo Kotilaine, stated that the oil producing nations in the Gulf have much more cash to spend than other Arab countries. Although the political situation in the surrounding region, and in fact the world, is unstable, these governments are looking to show their commitment to their citizens.
Back in August the government of Saudi Arabia announced that a spending plan covering five years will amount to $385 billion and be aimed at reducing the unemployment rate for Saudis aged 20 to 24, currently sitting at around 40 percent. Overall, the 2009 jobless rate was 10.5 percent, based on the Central Department of Statistics and Information’s data.
Saudi may also see inflation rise rapidly in the first quarter with global food prices continuing to go up, according to Saudi’s central bank’s quarterly report found online. In the fourth quarter the average inflation was recorded at 5.7 percent.
Uprisings in Egypt resulted in the February 11 resignation of Egyptian President Hosni Mubarak. One month before that, Zine Al Abidine Ben Ali, then leader of Tunisia, was forced to go into exile.
Protests in Bahrain, a nation that is physically linked with Saudi Arabia thanks to a 16-mile-long (26km) causeway, have spread over the border to Saudi in times past. The capital of Bahrain, Manama, is close by the capital of Saudi, Riyadh, separated by only a four-hour-long drive. Based on information compiled by Human Rights Watch, Saudi’s government arrested a large group of Shiites back in 1995. This group was in the Eastern Province and was arrested under suspicion of being involved in Bahraini protests.
Libyan protests over the last several days have resulted in hundreds of deaths as portions of the population rise up against Muammar Gaddafi, who has led the nation for forty years. Demonstrations have also taken place in Jordan, Morocco, Algeria and Iraq.
Saudi Arabia, where the Islam religion began, is pushing to develop infrastructure and housing and diversify away from an oil-based economy. Bloomberg states that Saudi oil production hit 8.4 million bpd in January.Paul Holdsworth, Staff Writer, Gulf Jobs Market News