Monday, February 8, 2016

A bitter pill for a better future

The re-cent hike in gasoline prices in Saudi Arabia — up to 67 percent for some grades of fuel — came as a shock to many Saudis. But it shouldn’t.
Pretty much since the 1970s, Saudis have been given a free ride when it comes to fuel prices. While Europe and the United States have paid a premium at the fuel pumps we have been paying a few halalas to drive around. Now gasoline prices in the Kingdom are about $1 per gallon. In England it’s about $5.40 a gallon, and in the US gasoline prices average about $2 a gallon depending on the region.
We are witnessing an end of an era in Saudi Arabia in which dependency on the government and the economic model that Saudi citizens have become accustomed to is changing rapidly. Many Saudis see this with an attitude of doom and gloom while many others view the transformation as a challenge to emerge from our four-decade-old lethargy.
Of course, much of the changes are directly linked to low oil prices, but it has been expected in the last decade as Saudi Arabia pursued projects to generate nonoil revenue. Those generous government subsidies had to end some day. The first hint occurred in the 1990s with Saudization to provide Saudis with jobs, particularly in the private sector. The indirect message was that the government jobs would not always be available to young Saudis.
Half of the Saudi population is now under the age of 25 and must find employment. Women are entering the workforce in large numbers after earning university degrees abroad and have high expectations of good salaries, positions of authority and good working conditions. The Ministry of Labor has been making efforts to reduce the country’s dependency on foreign labor, although getting Saudis to accept jobs that include manual labor remains to be a tough nut to crack. There has been tremendous success in getting more Saudis into the workplace with bank jobs for men and women and the thousands of jobs now available for young women in the retail sector.
So the signs have been obvious for a long time. Although the government may impose harsh penalties on businesses that pass the additional costs to the Saudi consumer, it’s inevitable that food, services and public transportation — such as it is — will increase over the next year. This will further force Saudis to seek to increase their income. Although there is no indication as of yet, some economic experts expect free education and free health care to Saudis may also be reconsidered. These benefits, however, are what make Saudi Arabia a great nation. But there is a caveat. The public education system needs a desperate overhaul if Saudis are to be competitive in the global workplace. The Ministry of Education must set its sights on a workable model that gives young people a global view with an emphasis on science and technology.
The ministry also must consider reestablishing humanities and arts curriculum that will help Saudis better connect with individuals from different faiths and different walks of life. By stripping ourselves of our tendency to live in an insular, highly private world, young Saudis will become more competitive in the domestic and international job market with fewer expectations of government handouts. If the government removes some of the safety nets that many Saudis have come to expect as their entitlement they will be put in a position to flourish.

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