Saudi Arabia brings back allowances and shakes-up cabinet

Saudi Arabia has announced that benefits for military personnel and civil servants will be reinstated, as King Salman unveiled a series of royal decree on Sunday.

The measures came after Deputy Crown Prince Mohammed bin Salman reviewed the cuts, part of government efforts to curb spending when oil prices tanked in 2014.

Mohammed bin Salman reasoned that the overall fiscal situation for Saudi Arabia looks better after two years of austerity and that Riyadh can ease off on some of its austerity measures.

"The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff," said the decree, according to Reuters.

Looking up

Riyadh's experiment with austerity saw economic growth slow, after the price of oil went below the $30 a barrel mark early last year.

Since then, the price of a barrel has stabilised to around $50 but economists argue that the days of plenty could be over for Saudi Arabia with oil will unlikely to rise significantly in the coming years.

Saudi Arabia has unveiled an ambitious diversification programme called Saudi Vision 2030, which Riyadh hopes will see growth in other non-oil sectors.

Part of this mission is to see Saudi youth take a bigger role in government and running the economy, while the puritanical vigor of the ulama will be kept in check.

This was seen with the announcement of a cabinet shake-up and new roles for young princes in diplomacy and government.

— Amena Bakr (@Amena__Bakr) 22 April 2017" style="color:#fff;" class="twitter-post-link" target="_blank">Twitter Post A lot of royal reshuffling going on in #SaudiArabia tonight with the king issuing a number of royal decrees #policy #saudi — Amena Bakr (@Amena__Bakr) 22 April 2017

One of King Salman's sons, fighter pilot Prince Khaled bin Salman, was given Saudi Arabia's top diplomatic post as ambassador to the US.

Meanwhile, another of the king's sons, Prince Abdulaziz bin Salman, was given one of Saudi Arabia's most important positions, becoming state minister for energy affairs on Sunday.

Eight princes were also given deputy governor posts for cities or regions in Saudi Arabia including Mecca, Medina and Riyadh.

Young blood

Saudi Arabia's ruling al-Saud family have dominated the country's political system since the establishment of the third al-Saud state, with only a few senior roles given to non-royals.

The announcement of these princes to senior positions - as well as the leading position Prince Mohammed plays - will do little to deflect accusations of nepotism.

But the launch of committee to investigate alleged abuse and corruption in government appears to be Riyadh's attempt to send out the message it takes the issue of graft seriously.

The first person who will likely be investigated by the committee is former Civil Service Minister Khaled al-Araj, who was deposed on Sunday.

The anti-graft team will look into allegations that Araj had abused his post this week, Saudi-funded al-Arabiya reported.

Araj angered Saudis in government jobs last year when he said that Saudi civil servants work on average one hour a day.

"The amount worked [by them] doesn't even exceed an hour – and that's based on studies," he said, drawing the ire of government workers.

Around two-thirds of nationals work in the civil service, and Mohammed bin Salman has been keen to show that the younger generation of Saudis are harder working than their predecessors. 

With the new appointment King Salman is likely making a statement that he trusts this vision for the country.

Yet oil prices look unlikely to rise to pre-2014 levels anytime soon - even if Riyadh goes ahead with more production cuts - while the IMF has had to reasses its growth rates for Saudi Arabia in 2017 with cuts to projections.