The Saudi Arabian government recently assured citizens that they
will not be left behind when it comes to energy subsidies.
Citing
subsidies now in place in the kingdom, the Saudi Ministry of Energy,
Industry and Mineral Resources promoted something called a “Unified
Citizen Account” that will take over aspects of subsidy
management after initial disbursements are made in coming months.
The government is also notifying citizens about a
registration portal that will open on Feb. 1.
A Saudi
Fiscal Balance Program ensures that eligible beneficiaries will get
the payments they are currently entitled to under subsidy practices,
the ministry said, describing the intent of subsidies this way: “The
purpose of the subsidy was to reduce the effect of the rise in prices
and make them affordable to citizens, residents, companies, stores
and factories.”
The ministry also said that eligibility
under the Unified Citizen Account will extend to both public- and
private-sector employees.
For more on the subsidies and
their economic and political impact, the Gulf News Journal
spoke with Mahfuz Meherzad, an adjunct professor of government and
political affairs at Millersville University in Lancaster County,
Pennsylvania.
“Economically, (subsidies) may not make a
lot of sense in the near term,” he said. “But it’s part of an
overall model of governance.”
Essentially, Meherzad
said, what subsidies and government payments allow the Saudi
leadership to do is control a populace that has many economic
supports.
“They’re able to quell any sort of push for
democracy.” he said, pointing out that even the American Revolution
was, in part, based on economic issues around taxation.
Meherzad
said subsidies and other giveaways help ensure the “durability”
of the kingdom’s political order by staving off the cries for
democracy that have been heard in so many other parts of the
world.
“The Middle East is an outlier.” Meherzad said,
suggesting that it’s precisely the economic support that has
stunted any call for real representation and democratic progress in
Saudi.
“Subsidies keep prices low for the citizens,”
he said, adding that other incentives, like an abundant child credit,
contribute to a sense of economic well-being among the Saudi rank and
file.
Other analysts agree that any angst surrounding
Saudi subsidies occurs in the context of profound economic support
for citizens there.
“The ultimate goal is not to dismantle the
welfare state, but to make it more durable through incremental reform
over years,” Matthew Reed, vice president of Foreign Reports
Inc., a consulting firm with interests in Middle Eastern affairs,
wrote in a January
2016 Fuse article. “The latest changes are not
whiplash-inducing.”
Reed said Saudis still pay only about half of
what Americans do to fill up their tanks, so there won’t be much
hand-wringing about modest efforts to cut subsidies, which might also
be linked to an effort to promote the use of renewable energies.
“Saudi Arabia’s deep pockets mean it can endure low oil prices
for years,” Reed wrote, “but that doesn’t mean it can afford to
do nothing and simply wait for prices to rebound. Saudi leaders have
made that clear.”
