Saudi deputy minister: kingdom faces bankruptcy in 3-4 years unless economy reforms
— الثامنة MBC (@MBC8PM) October 19, 2016
Saudi Arabia’s deputy economy minister has said that the kingdom is headed for bankruptcy unless the kingdom follows through with economic reforms.
“If we don’t take any reform measures, and if the global economy stays the same, then we’re doomed for bankruptcy in three to four years,” Mohamed Al Tuwaijri said.
The comments were made during a televised discussion on the kingdom’s economy, during which Civil Service Minister Khaled Alaraj also hit out at the lack of productivity in the kingdom’s public sector.
“The amount worked [among state employees] doesn’t even exceed an hour – and that’s based on studies,” Alaraj said.
More than two-thirds of Saudis work for the government, with the kingdom spending roughly 45 percent of its budget, or $128 billion, to pay their salaries in 2015.
Recently, the kingdom announced 20 percent pay cuts for all ministers and 15 percent pay cuts for Shura Council members, while also switching to the Gregorian Calendar in effort to save 11 days of payments to public sector employees. Bonuses and other perks were also targeted by the reforms and sales taxes have been introduced.
The wide ranging economic reforms come as an integral part of the kingdom’s Vision 2030,which aims to triple non-oil revenues to 530 billion Saudi riyals ($141.33 billion) by 2020.
This week, the kingdom sold $17.5 billion in debt, in the largest-ever bond sale from an emerging market. The sale was hailed as a major success for the world’s top oil exporter, as it attracted investor interest totaling $67 billion, nearly four times the amount of the sale.