‘Saudi Civil Servants Work 1 Hour Daily, Bankruptcy in 3-4 Years’
Saudi Civil Servants are worried. Top Saudi officials have hit out at shockingly low productivity in the country’s bloated public sector, as the kingdom – reeling from low oil prices – tries to cut a budget deficit that ran to nearly $100 billion last year.
Saudi Civil Servants are expected to run a budget deficit of 21.6 percent in 2015 and 19.4 percent in 2016, according the IMF’s latest regional economic outlook, cause they work less payed the most. The country needs to adjust spending, the IMF urged.
— MarketWatch (@MarketWatch) October 22, 2015
The Saudi Civil Servants are a topic that the IMF outlined two key factors shaping the region’s outlook. They are spreading and deepening regional conflicts and slumping oil prices.
The, Saudi Civil Servants, conflicts have given rise to large numbers of displaced people and refugees, on a scale not seen since the early 1990s, according to the report.
“Achieving fiscal sustainability over the medium-term will be especially challenging given the need to create jobs for the more than 10 million people anticipated to be looking for work by 2020 in the region’s oil exporting countries,” IMF Middle East and Central Asia Department Director Masood Ahmed told journalists after the report’s unveiling in Dubai.
According to the research, many experts suggest low oil prices will remain in place for the foreseeable future.
“For the region’s oil exporters, the fall in prices has led to large fall in revenue, amounting to a staggering $360 billion this year alone,” Masood Ahmed said.
‘Saudi civil servants work 1 hour a day, we’re headed for bankruptcy in 3-4 years’: Top Saudi officials have hit out at shockingly low productivity in the country’s bloated, ‘Saudi civil servants,’ public sector, as the kingdom – reeling from low oil prices – tries to cut a budget deficit that ran to nearly $100 billion last year.
“The amount worked [among state employees] doesn’t even exceed an hour – and that’s based on studies,” civil service minister Khaled Alaraj said during an official discussion of Saudi Arabia’s economy broadcast at prime time on Wednesday night.
Saudi Civil Servants have become a focus and two Saudi Arabia’s senior officials have warned that further cuts are needed to the kingdom’s swollen public sector otherwise the country faces bankruptcy in three years.
Khaled Al Araj, the civil service minister, told a TV debate on Saudi TV network MBC that civil servants in the kingdom barely put in one hour a day in the office and have little incentive to work.
The kingdom’s public sector, which employs more than 70 percent of the workforce, is extremely unproductive and its employees have a poor work ethic, the UK’s Times newspaper quoted him as saying.
The system is so badly run, he added, that wages were paid to government employees even if they had left their jobs.
Last month, Saudi Arabia announced it would cut ministers’ salaries by 20 percent and scale back financial perks for state employees in as part of austerity measures to plug the kingdom’s widening budget deficit.
Along with other GCC governments Saudi Arabia is struggling with falling revenues in a climate of low oil prices – its deficit was nearly $100 billion last year.
But Al Araj said further cuts were needed as civil servants’ timekeeping and productivity was so poor. “It directly and negatively affects government institutions,” he was quoted as saying.
Saudi Arabia’s deputy economy minister Muhammad al-Tuwaijri, speaking during the same TV debate, warned that government’s finances will come under severe pressure 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.”
“The amount worked [among ‘Saudi civil servants’ state employees] doesn’t even exceed an hour – and that’s based on studies,” civil service minister Khaled Alaraj said during an official discussion of Saudi Arabia’s economy broadcast at prime time on Wednesday night.
Two senior Saudi officials have warned that the kingdom could go bankrupt in three years unless serious cuts are implemented to trim the public sector which they have described as inefficient and overstretched.
Minister of Civil Service Khaled Al-Araj told a live TV debate that civil servants in the kingdom barely put in one hour a day in the office. The civil servants, he added, also have little incentive to work.
The kingdom’s public sector, which employs more than 70 percent of the workforce, is extremely unproductive and its employees have a poor work ethics, Al-Araj was quoted as saying by media.
The system is so badly run that wages are paid to government employees even if they had left their jobs, the UK’s The Times newspaper quoted him as saying in a report that was also carried by the arabianbusiness.com.
Al-Araj warned that the poor performance of the public sector could soon blow out of proportion.
“It directly and negatively affects governmental institutions,” he was quoted as saying by the media.
Saudi Arabia is struggling with falling revenues – what has been caused by low oil prices. The kingdom’s deficit was nearly $100 billion last year.
Saudi Arabia’s deputy economy minister Muhammad al-Tuwaijri, speaking during the same TV debate, also warned that government’s finances will come under severe pressure 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,” he said.
The government has announced a raft of unprecedented steps to cut costs, some systematic, others haphazard.
— RT (@RT_com) October 20, 2015
OPEC members Saudi Arabia, Iran, Iraq, Kuwait, Qatar, UAE, Algeria and Libya have all seen their revenues drop sharply as a result of a decline in oil prices.
Saudi Arabia is currently facing a budget deficit for the first time since 2009. The crude price decline has strongly influenced the kingdom’s economy since oil sales account for about 80 percent of its revenues. It has prompted the government to cut spending, delay projects and sell bonds.
The country’s net foreign assets fell by about $82 billion from January to August. The government sold state bonds worth $15 billion (55 billion riyals) this year.
With the economy expected to expand by only 1.2 percent this year, and oil prices hovering at around $50 per barrel, Saudi Arabia vast oil reserves, which still stand at over $500 billion, have been depleting at an alarming rate.
“If we didn’t take any reform measures, and if the global economy stays the same, then we’re doomed for bankruptcy in three to four years,” said Mohamed Al Tuwaijri, the deputy economy minister, at the same meeting.
The government has announced a raft of unprecedented steps to cut costs, some systematic, others haphazard.
As well as introducing sales taxes for the first time, charging for pilgrimage visas at about $530 per entrant, dropping some energy subsides, and levying heavy new road fines, the government has been trying to slash costs in the public sector.
Last month top Saudi civil servant officials had their salaries reduced by 20 percent, and their car and phone allowances sequestered, while ordinary workers lost 11 days’ pay when the government moved to the Gregorian calendar. Annual leave has been capped at 30 days.
— RT (@RT_com) September 7, 2015
“There have been a number of one-off spending proposals this year that have taken place, and those initiatives have added to the spending needs,” Masood Ahmed said.
The budget deficit caused project layoffs Saudi Civil Servants in Saudi Arabia. Companies working on infrastructure projects haven’t been paid for six months or more. Payment delays increased lately as the government wants to cut prices on contracts in order to preserve cash.
Despite the perpetual appeals to reduce output and support crude prices, OPEC has been refusing to do so as the cartel is trying to maintain its market share. However, last month the cartel signaled a possible change of stance, saying it might cut output and is ready to talk to other (non-OPEC) producers. But experts say OPEC’s statements are not important without a change of policy by its biggest crude producer Saudi Arabia.
Saudi Civil Servants, in Saudi Arabia, work only an hour a day and the country faces bankruptcy in three years unless austerity measures are enforced, senior officials have warned.
The bloated Saudi Civil Servants in the public sector, which employs more than 70 per cent of the workforce, is woefully unproductive, according to Khaled al-Araj, the civil service minister. He told a TV debate that state employees, many of whom had little incentive to work, barely put in 60 minutes a day at the office.
The uncharacteristically blunt and public assessment comes as the country struggles with falling oil prices. Its budget deficit was nearly $100 billion last year.
A two-year drop in oil prices has inflicted a dramatic blow to the economy of one of the world’s richest countries. If no changes are made, Saudi Arabia, according to some Saudi experts, will go bankrupt in three to four years.
Since 90 percent of the kingdom’s income is derived from oil exports, the price drop, from over $110 per barrel in mid 2014 to a low of just over $30 recently, is a disaster, as national monetary reserves are depleted at a breathtaking rate.
In 2015, Saudi foreign reserves were estimated at $654.5 billion, after the Saudi monetary agency lost almost $73 billion following the oil price drop, according to a 2015 Al Jazeera report. The monetary agency also withdrew some $70 billion managed by overseas financial institutions, and the state budget deficit that year was estimated at $98 billion. This year’s budget deficit is expected to be only slightly smaller. Riyadh, in an unprecedented move, offered its first international bond sale last week, worth $17.5 billion, to bring in additional much-needed cash.
Mohamed Al Tuwaijri, the kingdom’s deputy economy minister, said during a discussion of the Saudi economy, broadcast on Wednesday night: “If we didn’t take any reform measures, and if the global economy stays the same, then we’re doomed for bankruptcy in three to four years.”
To slow the drain on the kingdom’s treasury, Saudi leaders have resorted to cutting costs and expenditures, especially in the social sector.
Earlier this year, Saudi state media announced that the country’s finance ministry would cut spending, adopt new taxes, and reduce price subsidies for fuel, water and power.
But Saudis will not starve, it is worth noting, as popular citizen subsidies indicate that a Saudi work ethic is different from that of a country like the United States.
“The amount worked [among state employees] doesn’t even exceed an hour [a day] — and that’s based on studies,” Al Tuwaijri said, during the conference.
Even with the threat of reduced subsidies, government employees have little incentive to work, as they continue to be paid even if they lose their jobs, according to the Times. There are frequent additional perks given to civil servants as well, such as the one-time disbursement of the equivalent of two months’ pay to every bureaucrat at the time King Salman took the throne in early 2015, amounting to some $32 billion.
Some two-thirds of all employed Saudis work for the government, and Riyadh spent some 45 percent of its annual budget, about $128 billion, to pay their wages last year alone.
Kingdom leaders are very reluctant to change the status quo, preferring, according to RT, to instead introduce a sales tax, charge pilgrimage visas, eliminate many energy subsidies, and introduce new road tolls.
However, extraordinary times demand extraordinary measures, and those have arrived. So-called under-performing civil servants can now be fired after three years. At some departments, employees are now required to register their presence in the workplace several times a day, by swiping ID cards.
According to Forbes regards, regards the Saudi Civil Servants, top Saudi officials had salaries cut by at least 20 percent recently, and car and phone allowances were sequestered in September. Annual leave for ordinary government workers has been capped at 30 days.
However, the administration of King Salman is reportedly reluctant to introduce harsher measures, as easy money and expensive Western perks have long been the kingdom’s guarantee against political and social unrest.
Maybe selling all those abandoned luxury cars that Saudis have left rusting in the streets could help to sustain the national economy.