September 28, 2016 Leave a comment
In Saudi Arabia, 70% of the civilian population works for the government. This is a problem because the Saudi government is facing major financial strains due to low oil prices.
The great Patrick Cockburn writes:
…today the cuts are for the first time hitting public sector workers who are Saudi citizens, 70 per cent of whom work for the government. So far the austerity is limited with lower bonuses and overtime payments and a 20 per cent reduction in the salaries of ministers, though those close to political power are unlikely to be in actual need.
There are political dangers in this move. In the oil states of the Middle East there is a trade-off between the spectacular wealth of a corrupt and autocratic elite and an extensive patronage system through which much of the rest of the native population plugs into oil revenues. Some $120 billion, or half of government spending, went on salaries, wages and allowances in 2015.
With a Saudi budget deficit of $100 billion in 2015, this haemorrhage of cash may not be sustainable but will also be difficult to rein in. Great construction companies like Oger and Binladen are having serious difficulties getting paid by the government with Oger alone reportedly owed $8 billion. South Asian construction workers, who once saw Saudi Arabia as an El Dorado, are going home after waiting for months for pay cheques that never come.
The woes of foreign workers, and even of the native public sector employees, are not necessarily going to destabilise an absolute monarchy like Saudi Arabia that mercilessly crushes dissent. The fall or destabilisation of the House of Saud has been forecast for decades with no real sign of the prediction coming true. What makes the present economic stresses more significant is that they come at a moment when Saudi political influence is visibly under strain in the region and the world.
When Saudi Arabia’s patronage system fails, there will be a major meltdown in the Kingdom — a bottled-up “Arab Spring” on the Arabian Peninsula.
Trudeau might be worried that the Canadian military-industrial complex will lose the evil House of Saud as one of its biggest customers.
— Read more at CounterPunch —