Saturday 21 April 2018

Saudis sound inflation alarm

Riyadh, March 19, 2008

Saudi Arabia is showing signs of nervousness about popular discontent over inflation, as Saudis suffer sharp price rises despite an unprecedented cash windfall from high oil prices, observers say.

Saudis saw price rises hit seven per cent in January, the highest since at least 1981, while the riyal has declined in the past year along with the US dollar to which it is tightly pegged.

A January wage hike of 5 per cent for government employees was met with disappointment by many ordinary Saudis, after Gulf neighbours moved more quickly to raise wages by larger amounts.

Public avenues for expressing views are limited by a ban on political parties and public protest. Internet forums have provided an outlet for people to vent their feelings.

But in January a caller to a television programme attacking the government over the wage rise led to an temporary ban on all live television phone-ins.

A new trade and industry minister was appointed this month, promising a plan to combat price rises which the government has partly blamed on traders manipulating prices.

At a reformist "salon" last week - evening gatherings where issues of the day are discussed - a group of Saudis were scathing about the government's economic policies.

"That was a joke," said one official in a government ministry referring to the salary raise. "Who created this insult to the intelligence of the people?"

Another employee in a government company talked about the soaring price of oil, which this month hit $100 a barrel. Saudi Arabia is the world's largest oil exporter.

"People make a simple calculation. If we're producing 10 million barrels a day and its at $100 each, where does all the money go?" he said.

The inflation issue cuts to the fundamental problem of wealth distribution. Forbes magazine has listed Saudi princes and businessmen among the richest people in the world, while some civil servants earn around 1,000 riyals ($266) a month.

The authorities hoped that expanding popular participation in the stock market through initial public offerings in state-run firms would help spread the wealth during the current oil boom, but a bourse crash in 2006 spoiled those plans.

Tags: inflation | Saudi | alarm |

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