COVID Pandemic Can Worsen Pre-Existing Societal Tensions in Saudi Arabia

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While the regime tries to justify stripping again on the livelihoods of Saudi residents, it might worsen pre-existing societal tensions.

Saudi Arabia has applied harsh value hikes and spending cuts because the Kingdom faces an enormous financial downturn from the Coronavirus pandemic. 

The Value Added Tax (VAT) elevated from 5 % to 15 % on July 1, with shoppers speeding to malls and procuring centres to replenish on items earlier than the value hike. 

Saudi Arabia additionally elevated petrol costs by 34 % in July, triggering opposition from some residents. Gasoline 91 elevated from 0.98 riyals ($0.26) to 1.29 riyals ($0.34), whereas Gasoline 95 rose from 1.18 riyals ($0.32) to 1.44 riyals ($0.38).

One Saudi social media person stated the frequent taxation of individuals doesn’t create a strong financial system, however reasonably will increase discontent, anger and outrage. 

Meanwhile, Saudi Arabia ended an important financial help program known as the “Citizens Account” for 2 million folks, which averages 930 riyals ($245) per household, simply as these different crippling austerity measures are rolled out. 

“It feels like death,” Bandar Awad, a 34-year-old courier stated after dropping his month-to-month stipend. “Even recharging my cell-phone credit has become difficult.”

Despite these drastic insurance policies, which pro-government commentators defend as an “economic necessity,” Riyadh has pursued lavish spending sprees. 

From its faltering try to purchase English Premier League Football Club, Newcastle United, to buying extra weapons for use within the already pricey conflict with Yemen, there has additionally been an announcement launching a $20 billion tradition and tourism mission within the capital Riyadh.

Saudi residents might not look kindly on such strikes. The regime continues to justify stripping again on livelihoods, all of the whereas risking but extra societal tensions.

Growing social unrest

“Among certain demographics in the kingdom, grievances are on the rise, which ultimately leads to dissent,” Dr. Andreas Krieg, Assistant Professor at King’s College London, instructed me. 

He says this will probably be felt significantly in areas the place reforms are “less appreciated and cannot counterweight the grievances” reminiscent of in rural areas and extra conservative constituencies.

“These communities are less integrated into the economy and will feel the socio-economic fallout of COVID-19 more harshly than those in the urban middle class.”

Following the downsizing of the 2020 Hajj pilgrimage, one of many 5 pillars of Islam, together with the monitoring of prayer instances, and restrictions to Umrah, the ‘minor’ Islamic pilgrimage to Mecca and Medina, there’s a threat of additional discontent among the many kingdom’s ultra-conservatives. 

Saudi Crown Prince Mohammed bin Salman has grappled with this a part of society in his ‘reformist’ Vision 2030 plans, meaning to diversify Saudi Arabia’s financial system away from its oil dependency. 

“Another demographic are Shiites in the Eastern provinces who have traditionally felt marginalized in the kingdom, despite generating most of its revenue,” added Dr. Krieg. 

“Many feel that the Saudi patrimonial networks still disproportionately benefit from the country’s hydrocarbon wealth and that the Saudi family is shielded against the fallout of this crisis in comparison with other parts of society.” 

“So here we see sectarian grievances merged with socio-economic ones. All of this is a dangerous cocktail for social unrest.”

Adding to its beforehand unsure financial system, Riyadh confronted additional troubles after costs of oil sank to unprecedented lows in April – it makes up 50 % of its gross home product and 70 % of its international exports. The lack of income from Hajj, beforehand tipped to overhaul oil revenue as the dominion’s major money-maker, is one other blow. 

On Wednesday, the Saudi finance ministry introduced a $29 billion deficit for the second quarter of 2020, with oil revenues falling 49 % year-on-year to $25.5 billion, whereas whole revenues dropped 49 % to nearly $36 billion.

The International Monetary Fund (IMF) forecast in July that Saudi Arabia’s financial system would shrink 6.eight % this 12 months, signalling laborious instances forward for the Saudi financial system. Riyadh has tried to downplay this forecast. 

While economists say these reforms won’t essentially assist with restoration, extra slashing of the general public sector is anticipated. Saudi Finance Minister, Mohammed Al Jadaan, beforehand warned of additional cuts later this 12 months, which means MBS might, in concept, push the prices of the Coronavirus pandemic onto the folks. 

Could protests erupt?

With the inevitable long-term financial injury from the Coronavirus pandemic, and the lack of monetary privileges to Saudi residents, whom Riyadh has historically placated with its wealth, protests and new opposition politics might emerge.