Saudi Government Workers Pay the Price for Oil Slump


or more than four decades, the connection of Saudi Arabia and oil has meant an infusion of trillions of dollars into the Kingdom’s economy. However, the oil slump that’s now in the midst of its third year has created a situation that’s never happened before: the benefits and bonuses for government employees being cut.

Given the fact that two-thirds of such jobs make up all the jobs in Saudi Arabia, the September 27 decision affects a good portion of the estimated 32 million people that help constitute the country’s population. The lone individuals who aren’t affected by the ruling are soldiers that are currently serving in Yemen.

Due to the fact that more than 70 percent of Saudi revenues stem from oil, the previous efforts to get through the glut of this commodity has helped erode the Kingdom’s budgets. That was evident when it was disclosed in April that Saudi Arabia had a budget deficit of $98 billion.

The decision means government ministers will see their salaries reduced by 20 percent, overtime and annual leave now has an established cap and civil servants will have their wages frozen. Another freeze will take place in any hirings, which affects approximately 300,000 Saudis who are entering the job market for the first time.

Predictable grumbling soon followed by those noting that no members of the royal al-Saud family will likely be affected by these plans. This includes a large number of extended family members who receive bursaries-the equivalent of a scholarship.

Saudi Arabia had been able to amass a mountain of foreign reserves during its glory days in the oil business. However, those funds have taken a major hit and the Kingdom has resorted to using the resources of banks and lending institutions all around Riyadh.

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