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Government Should Give Loans, Not Homes - ASHARQ AL-AWSAT English Archive
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People across the world share the same dream: a good job and home. Saudi citizens have the same dream. This is why the government pledged it would provide millions of its citizens with housing—but this subsequently became a source of contention. Why is the government late in fulfilling its promise? Why did it not pay the promised loans, only spending SAR 3 billion of the promised SAR 66 billion?

According to a well-known Arabic proverb, the happiest people are those who do not know governments and are not known themselves by governments. Living in this way has become impossibile today. In the past, the majority of the population was made up of farmers and shepherds who could live independently, but now the government is involved in even the smallest details of people’s lives. In light of this, it is natural for governments to become responsible and accountable for their requirements and dreams.

The housing promise is a developmental, economic, social and—of course—political project. If the government fulfils its pledge, it may be one of the largest such projects ever undertaken in the world. There are two ways to ensure its success: either give citizens the money, or give them a pre-built house. It would be better if the government grants each citizen SAR 500,000 and lets them be in charge, while ensuring that the price of basic construction materials is regulated. The less favorable option would be for the government to handle the entire construction process.

Thirty years ago, the country witnessed a new urbanization experience when Saudi citizens, benefiting from interest-free government loans, constructed their own homes. This is how most of Saudi Arabia’s new cities were built. However, the government construction projects at the time all ended in failure, and this is something that the government itself has acknowledged. This is something that will not change much today, no matter how many Chinese or Irish experts are consulted or how many international companies are involved and how much money they are paid.

A home, with all its architectural details, is an expression of personal choice, and government engineers cannot impose their own tastes on the public. Even after construction is completed and these new houses are handed over, official bodies will still face a number of problems regarding how addresses and houses are distributed—not to mention complaints regarding every broken drain or leaking roof. At this point, people will begin accusing the government of corruption, rather than being thankful for all its hard work. Why should the government place itself in a position where it would face such accusations, when it can let the people decide what they want and build their own homes themselves?

One of the positive results of the project was the decision to allow loan seekers to use government support to buy pre-constructed houses, removing the old condition stipulating that they must buy and develop the land themselves. This has significantly facilitated the housing project. The government can also impose restrictions to prevent profiteering from its loans, such as prohibiting the sale of houses built using them. (This same decision was also taken by the Abu Dhabi government.) The Saudi government could also set a minimum period of time that the original owner must live in the house before being allowed to sell it.

The government should learn from the mistakes of others and not take on the job of building these houses itself. The socialist countries that were in complete control of their people’s needs, under the pretext that they could be kinder and fairer than the free market, met with utter failure. Those governments provided people with electricity and gas, supplied their bread, sold their cars and built their homes. However, this approach did not work: such expansion of the government’s role was accompanied by rampant nepotism, corruption and inefficiency. Governing in such a way also contradicts the people’s desire to have freedom of choice. It is better to allow people to build their own homes by regulating the market and the laws to prevent manipulation and price fixing.

There are, of course, a number of complex questions that highlight the disadvantages of allowing citizens to find housing independently after obtaining the initial loan. For example, what is the solution to the complicated problems of purchasing desirable land, particularly in light of the land price boom? Government institutions are themselves responsible for these price hikes after they banned the constructionof multi-story buildings in the cities. At the same time, they have permitted those who own huge swathes of land to leave their property without development or construction, and without paying any fees or taxes. As a result, land prices continue to rise.

All the pretexts for preventing the increase in the cost of land are invalid, as are the excuses for not bringing land traders to task. The state now has a golden opportunity to review the entire issue in a comprehensive and cohesive manner. Saudi Arabia enjoys a strong rail network that facilitates movement, and new suburbs can be constructed along these train lines.

Saudi Arabia should dedicate all the land around the proposed railway network, both inside and outside the cities, to housing projects. While these railways are being built, vital infrastructure—like waterworks and electrical grids—can be put in place, while housing loans and land can be allocated to the people. Within three years, these areas will be populated satellite cities.

The state should allow citizens to handle their own housing construction. It should not play the role of the father and give homes to the people, only tomorrow to be beset by complaints and accusations.

Abdulrahman Al-Rashed

Abdulrahman Al-Rashed

Abdulrahman Al-Rashed is the former general manager of Al-Arabiya television. He is also the former editor-in-chief of Asharq Al-Awsat, and the leading Arabic weekly magazine Al-Majalla. He is also a senior columnist in the daily newspapers Al-Madina and Al-Bilad. He has a US post-graduate degree in mass communications, and has been a guest on many TV current affairs programs. He is currently based in Dubai.

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