First, from Bloomberg View on Friday, \u201cThe Right Dream for Saudi Arabia<\/a>,\u201d which describes the Deputy Crown Prince\u2019s plan to sell shares in the state oil company and use the proceeds to create a diversified Sovereign Wealth fund, and prescribes a larger agenda: \u00a0in order to reform its economy, remedy existing problems and plan for a future with less oil wealth,<\/p>\n A population accustomed to relying on immigrant labor and government assistance will have to work more and pay taxes. At the same time, the state will have to be more responsive to the citizens it\u2019s now asking to start businesses and fend for themselves. It will have to provide them with better health care and an educational system that helps them succeed in a new economy. More women will need to work (and drive to work, too). Fewer princes will be able to enjoy luxurious lifestyles at state expense. And when there is political unrest, the government will have to resist the temptation to buy off the opposition.<\/p><\/blockquote>\n The staff editorial references a news article, \u201cSaudi Arabia Plans $2 Trillion Megafund for Post-Oil Era: Deputy Crown Prince<\/a>,\u201d which describes the objective as that of helping \u201cwean the kingdom off oil,\u201d though the objective appears to be more about helping the government obtain diversified sources of revenues, rather than building a diversified employment base for the Saudi people.<\/p>\n This reminded me of an article I had read, and saved to my facebook page (have you liked Jane the Actuary on Facebook yet?), a while back, from the New York Times, \u201cYoung Saudis See Cushy Jobs Vanish Along With Nation\u2019s Oil Wealth<\/a>.\u201d<\/p>\n For decades, the royal family has used the kingdom\u2019s immense oil wealth to lavish benefits on its people, including free education and medical care, generous energy subsidies and well-paid (and often undemanding) government jobs. No one paid taxes, and if political rights were not part of the equation, that was fine with most people.<\/p>\n But the drop in oil prices to below $30 a barrel from more than $100 a barrel in June 2014 means that the old math no longer works. Low oil prices have knocked a chunk out of the government budget and now pose a threat to the unwritten social contract that has long underpinned life in the kingdom, the Arab world\u2019s largest economy and a key American ally.<\/p><\/blockquote>\n The Saudi workforce is similar to Greece in that, in both places, government jobs are cushy and highly desired, and private sector jobs are scorned \u2014 in fact, 70% of the Saudi workforce (as opposed to expats\/guest workers) work in government jobs. \u00a0The country is young, which makes for large numbers of new job seekers, ill-prepared from their univesity training for skilled and professional jobs, where guest workers are preferred for their skills and their work ethic. \u00a0And the Times describes the situation even at McDonalds:<\/p>\n In recent years, the government has pushed for greater Saudi employment, penalizing companies with few Saudi employees. Many employers hate the program, saying it forces them to swell their payrolls with people who contribute little.<\/p>\n Even companies that have hired lots of Saudis have often had to rely on significant social engineering to get them working.<\/p>\n Saudis made up one-third of the crew at a Riyadh McDonald\u2019s on a recent morning, manning the drive-up window and cash register and making fries.<\/p>\n \u201cIs this spicy?\u201d one yelled to a colleague. \u201cOne large fries, please!\u201d<\/p>\n While they do the same work as foreigners, they earn much more. Salaries for foreign crew start at $320 a month, while Saudis get $1,460, part of which is subsidized by the government.<\/p><\/blockquote>\n Which led me to dig into the situation a bit more, and find an article from The Guardian from 2013, \u201cSaudi Arabia\u2019s riches conceal a growing problem of poverty<\/a>,\u201d according to which<\/p>\n press reports and private estimates suggest that between 2 million and 4 million of the country\u2019s native Saudis live on less than about $530 a month \u2013 about $17 a day \u2013 considered the poverty line in Saudi Arabia.<\/p>\n The kingdom has a two-tier economy made up of about 16 million Saudis, with most of the rest foreign workers. The poverty rate among Saudis continues to rise as youth unemployment skyrockets.<\/p><\/blockquote>\n But details are hard to come by. \u00a0According to Wikipedia<\/a>, 80% of its private-sector workers are foreign workers, and, though its unemployment rate across the entire workforce<\/a> is 5.3%, for Saudi youths ages 16 \u2013 29<\/a>, it\u2019s 29%. \u00a0Are they truly unable to get jobs because private sector workers are able to hire foreigners instead? \u00a0Are they unwilling to accept jobs they consider as beneath them, while they wait for the right, middle-class, take-it-easy job to open up?<\/p>\n Another tidbit: \u00a0one always hears that they have a high fertility rate, because women have nothing better to do, being restricted from pretty much everything else. \u00a0But according to the World Factbook<\/a>, their fertility rate is right at replacement \u2014 but I was unable to figure out whether this is artificially low because a great portion of the childbearing-age population consists of foreign workers who are forbidden from bringing spouses along. \u00a0Are they included in the metrics, giving the impression of a lower birth rate than is the case for Saudi nationals? \u00a0 The World Bank<\/a> reports their TFR is much higher, at 2.8, which is odd, because usually the two sources are pretty close.<\/p>\n And that\u2019s as far as I\u2019ve gotten, except that I now have a library book to read on the topic!<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":" First, from Bloomberg View on Friday, \u201cThe Right Dream for Saudi Arabia,\u201d which describes the Deputy Crown Prince\u2019s plan to sell shares in the state oil company and use the proceeds to create a diversified Sovereign Wealth fund, and prescribes a larger agenda: \u00a0in order to reform its economy, remedy existing problems and plan for […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[236],"class_list":["post-4261","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-saudi-arabia"],"yoast_head":"\n