In an article in the British Middle East Eye website titled "The Saudi Financial Crisis Will Spark Resistance to State Looting", Madawi Al-Rasheed wrote that the state is demanding that the people endure austerity measures, but has questioned criticism about the billions of dollars spent on the Saudi royal family, huge projects and weapons?
Madawi - a visiting professor at the Middle East Institute at the London School of Economics - pointed out that the Saudi authorities announced on Monday unprecedented measures to save their financial resources from an imminent collapse, because of what it described as mismanagement and not Corona pandemic or the collapse of oil prices, and that starting from July 1 / Next July, the value-added tax will increase from 5% to 15%, and the cost of living allowance will stop (1000 riyals per month).
She commented that these measures are desperate attempts to save an economy that has been looted for generations, and that this step is only the beginning where the government may resort to the final solution by cutting jobs in the public sector and reducing the salaries of current state employees, or simply finds itself unable to pay their salaries permanently.
She added that with no sign of an improvement in oil prices and the continued outbreak of the Corona virus worldwide and within the country, it is not certain that the new increase in value-added tax and suspension of the living allowance will generate enough savings for the country to offset the severe losses.
The author considered that the political effects of the crisis outweigh these limited and desperate measures that will not in themselves be enough to stop the slide towards the unknown.
She indicated that the so-called Saudi social contract that is based on a mutual agreement whereby the government provides various services such as jobs in the public sector, education, housing, and health, and in return citizens continue to pledge loyalty to the leadership, accept their full political marginalization, deny them their rights, and even repress them in the name of security and wealth.
The chosen family said that this social contract is based on wishful thinking and not on an accurate assessment of the relations between the state and Saudi society. Since the discovery of oil in 1933, the Saudis have never stopped challenging their government, even in times of wealth and affluence.
Madawi criticized the claim of the Saudi leadership to bear the austerity measures while the princes of Al Saud and their direct branches receive monthly salaries from the state treasury, not to mention other privileges that aim to keep a large group of princes busy with hunting trips and luxury holidays in European resorts and the purchase of football fields and real estate at home and abroad.
The writer indicated that the leadership is still silent about the secret cost of such salaries that thousands of unemployed princes receive every month, simply because they belong to the "chosen family" who their lineage to Al Saud gives them a huge monthly sum of state treasures, without appearing in the budget statement or in Budget.
On the regional level, the spending of billions to block uprisings in many Arab countries and wage war in Yemen to accelerate the depletion of wealth, and the huge spending on weapons that does not provide internal security and does not guarantee peace in a troubled region remains outside the scope of criticism or scrutiny.
And she saw that such spending on regional conflicts exacerbated local rivalries, and enabled these Arab leaders, determined to deprive their citizens of a decent life.
In her article, Madawi concluded that the gradual erosion of state services and salaries, along with high consumption prices and the possibility of continuing poverty, would be the spark for a new era of opposition policies brought about by the catastrophic mismanagement of the state under its current leadership.