September 28, 2016
BREAKING THE OIL CURSE:
Saudi Arabia cuts wage bill of government employees by 20% to cut costs (Glen Carey, Vivian Nereim, 9/28/16, Live Mint)
Saudi Arabia cancelled bonus payments for state employees and cut ministers' salaries by 20%, steps that further spread the burden of shoring up public finances to a population accustomed to years of government largesse.The government also decided to suspend wage increases for the lunar year starting next month and curbed allowances for public-sector employees, according to royal decrees and a cabinet statement published by state media. The salaries of members of a legislative body that advises the monarchy were cut by 15%.By curbing what many Saudis had for years taken for granted, the government is signalling a determination to reduce the highest budget deficit among the world's 20 biggest economies amid low oil prices and a lingering war in neighbouring Yemen.
The key is to drain their resource wealth to the point where they are forced to tax the citizenry--there is no representation without taxation.
Posted by Orrin Judd at September 28, 2016 6:35 PM