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Saudi chops wage, benefit bill in delicate pursuit of austerity
Source: Reuters
BUSINESS NEWS | Tue Sep 27, 2016 | 11:25am EDT
Saudi chops wage, benefit bill in delicate pursuit of austerity
By Katie Paul, Marwa Rashad and Celine Aswad | RIYADH/DUBAI
A decision to slash ministerial pay by a fifth reflects Saudi Arabia's resolve to nudge its citizens into tolerating a fall in living standards at a time of low oil prices.
Along with reductions unveiled on Monday that will affect all public sector workers, the cuts also flag to financial markets before a debut sovereign bond issue that the oil exporter is committed to budget discipline.
The measures appear largely to formalize savings introduced ad hoc in parts of the state apparatus since last year, but their announcement on state media, which gave an official start date of Oct 1., is not without political risk.
In a country that has no elections and where political legitimacy rests partly on distribution of oil revenue, the ability of citizens to adapt to reforms aimed at reducing oil dependence and improving self-reliance is crucial for stability.
[font size=1]-snip-[/font]
Saudi chops wage, benefit bill in delicate pursuit of austerity
By Katie Paul, Marwa Rashad and Celine Aswad | RIYADH/DUBAI
A decision to slash ministerial pay by a fifth reflects Saudi Arabia's resolve to nudge its citizens into tolerating a fall in living standards at a time of low oil prices.
Along with reductions unveiled on Monday that will affect all public sector workers, the cuts also flag to financial markets before a debut sovereign bond issue that the oil exporter is committed to budget discipline.
The measures appear largely to formalize savings introduced ad hoc in parts of the state apparatus since last year, but their announcement on state media, which gave an official start date of Oct 1., is not without political risk.
In a country that has no elections and where political legitimacy rests partly on distribution of oil revenue, the ability of citizens to adapt to reforms aimed at reducing oil dependence and improving self-reliance is crucial for stability.
[font size=1]-snip-[/font]
Read more: http://www.reuters.com/article/us-saudi-economy-idUSKCN11X1SL
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