Middle-east Arab News Opinion | Asharq Al-awsat

Opinion: Belt-Tightening or a Change in Approach? | ASHARQ AL-AWSAT English Archive 2005 -2017
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I do not think that the pricing decisions announced by the Saudi government is a case of belt tightening as some have said. They say that these decisions are temporary and a response to the terrible decline in oil prices that aim to reimburse huge losses suffered by the Saudi government. However, according to what was announced, the pricing decisions are corrective and are not austerity measures.

The cost of filling your petrol tank in Britain is around $100 whilst in Saudi Arabia, it is only $10. Whether the price of a litre is cheap because of subsidies or is priced according to the market, the price is not the issue. Rather, the issue is the need to raise the income of citizens. The economy needs to grow so that the country, and not only the government, becomes rich. The financial capabilities of a family should be adequate enough to buy goods in full without government help.

As for the politicians, it is easier for them to pay subsidies and employ the unemployed. However, there will come a day when the state will be unable to continue and the state and citizens will both pay the price, at which point the pain will be more severe and implementation will be harder. Price correction is a necessity in order to lift the heavy burden of subsidies off the state’s back. The most important thing here is that all of this plays a part in changing the philosophy of the economy and its dynamics. Many will be patient with what they are not accustomed to, i.e. the rising of prices as a result of the government decreasing subsidies, on condition that there is real economic and developmental reform. This is what the government is promising and it is a very big challenge.

The task of reform and development is a complex operation. It requires the correction of education from beginning to end, the provision of support, changing inactive bank investment interests and the introduction of modern management concepts. In addition to this, the map of industries needs to be modified; women need to be encouraged to work in order to strengthen the incomes of their families; social habits of depending on others must be fought; failing governmental institutions must be brought to account and a programme to fight corruption at all levels must be adopted.