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Monday, October 24, 2016

2 SAUDI OFFICIALS, WARNS "BANKRUPTCY" IN THE KSA WITHIN 3-4 YEARS

Bankruptcy in the Kingdom of Saudi Arabia is possible in the span of three to four years if there are no economic reforms, budget cuts and austerity measures to implement especially in the public sector.  This is the warning of two Saudi Arabia senior officials in a television debate on Saudi TV network MBC.  A Civil Service Minister Khaled Al Araj said, civil servants in the kingdom barely put in one hour a day in the office and have little incentive to work.Around 70 percent of the Kingdom's workforce employs in public sector with the kingdom spending roughly 45 percent of its budget, or $128 billion, to pay their salaries in 2015.  Al Araj commented, the public sector is unproductive, has a poor work ethic and the system is so badly run.  In spite of this, wages are paid to civil servants even if they had left their jobs.



Bankruptcy in the Kingdom of Saudi Arabia is possible in the span of three to four years if there are no economic reforms, budget cuts and austerity measures to implement especially in the public sector.

This is the warning of two Saudi Arabia senior officials in a television debate on Saudi TV network MBC.

A Civil Service Minister Khaled Al Araj said, civil servants in the kingdom barely put in one hour a day in the office and have little incentive to work.

Around 70 percent of the Kingdom's workforce employs in public sector with the kingdom spending roughly 45 percent of its budget, or $128 billion, to pay their salaries in 2015.

Al Araj commented, the public sector is unproductive, has a poor work ethic and the system is so badly run.

In spite of this, wages are paid to civil servants even if they had left their jobs.


Austerity measure has been announced last month of September to combat the ballooning budget deficit.

It includes

  • Ministers' salaries are reduced by 20%.
  • Housing and car allowances for members of the advisory Shura Council are cut by 15%.
  • Wage increases for lower-ranking civil servants are suspended.
  • Overtime payments were curbed at between 25 and 50 percent of basic salaries
  • Annual leave should not exceed 30 days
But Al Araj said further cuts were needed as civil servants’ timekeeping and productivity was so poor.  He added that it directly and negatively affects government institutions.


Other than the problem with the government workers, Saudi Arabia is also struggling with falling revenues due to low oil prices with a deficit of nearly $100 billion in 2015.



Inline with this, Saudi Arabia’s deputy economy minister Muhammad al-Tuwaijri, supports the claim of Al Araj that Saudi will fall within three to four years unless austerity measures are enforced.

“If oil prices keep declining and the Saudi government does not take action with economic and austerity measures . . . bankruptcy in the kingdom is inevitable within three to four years.”


Here is the Arabic Video posted by MBC







Read Also:

Saudi official warns over bankruptcy in 'three to four years'


State employees work 60 minutes a day, says civil service minister Khaled Al Araj
Related Post:

Saudi deputy minister: kingdom faces bankruptcy in 3-4 years unless economy reforms

(WATCH:Is Saudi Arabia Going Bankrupt?)


On the other hand, many Saudi Aramco employees have tender their resignations because of reported changes in allowances and incentives.

 

Al-Hayat Daily Newspaper reported that HR executive director and personnel manager are among those who submit their resignation.

According to reports, employees are concerned about budget cuts in the company which might affect their salary and allowances.

However, Saudi Aramco denied that the company’s officials have requested early retirement.

Only last month, a senior Aramco official said that the company plans to invest a total of about $334 billion by 2025, including spending on infrastructure and projects to maintain oil capacity of the Kingdom.

(Sources:saudigazette.com, AL ARABIYA)



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