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Saudi Arabia’s Big Dreams and Easy Living Hit a Wall Saudi Arabia’s Big Dreams and Easy Living Hit a Wall
(32 minutes later)
BEIRUT, Lebanon — Saudi Arabia knows about head-spinning change.BEIRUT, Lebanon — Saudi Arabia knows about head-spinning change.
“One day there was nothing, the next day there was everything,” a business student, Noura Khalid, 23, said in Riyadh in December, describing how it felt to watch her once-staid country welcome international rap stars and wrestling champions, cars steered by women, movie theaters, gender-mixed cafes and other previously unimaginable innovations in just the last few years. “There’s no break! It’s happening so quickly.”“One day there was nothing, the next day there was everything,” a business student, Noura Khalid, 23, said in Riyadh in December, describing how it felt to watch her once-staid country welcome international rap stars and wrestling champions, cars steered by women, movie theaters, gender-mixed cafes and other previously unimaginable innovations in just the last few years. “There’s no break! It’s happening so quickly.”
Now the kingdom faces yet more whiplash.Now the kingdom faces yet more whiplash.
Not only is the coronavirus redefining daily life for Saudis, but plummeting oil prices are robbing the kingdom of the enormous wealth that was underwriting the new Saudi Arabia. The twin blows threaten to sink Crown Prince Mohammed bin Salman’s sweeping social and economic agenda, and have already curtailed the vast welfare state that has given most Saudis a comfortably subsidized life.Not only is the coronavirus redefining daily life for Saudis, but plummeting oil prices are robbing the kingdom of the enormous wealth that was underwriting the new Saudi Arabia. The twin blows threaten to sink Crown Prince Mohammed bin Salman’s sweeping social and economic agenda, and have already curtailed the vast welfare state that has given most Saudis a comfortably subsidized life.
Prince Mohammed, Saudi Arabia’s de facto ruler, has upended his country out of a recognition that the kingdom could not keep living off oil forever. Alongside the social reforms have come swaggering moves to diversify the Saudi economy by building up tourism, entertainment and even a futuristic new city called Neom, under a grand scheme he called “Vision 2030.”Prince Mohammed, Saudi Arabia’s de facto ruler, has upended his country out of a recognition that the kingdom could not keep living off oil forever. Alongside the social reforms have come swaggering moves to diversify the Saudi economy by building up tourism, entertainment and even a futuristic new city called Neom, under a grand scheme he called “Vision 2030.”
But with tourism canceled, concerts out of the question and oil prices crashing, a country that was jangling with nervous excitement a few months ago is confronting a very different future from the one Prince Mohammed had promised.But with tourism canceled, concerts out of the question and oil prices crashing, a country that was jangling with nervous excitement a few months ago is confronting a very different future from the one Prince Mohammed had promised.
“I think Vision 2030 is more or less over,” said Michael Stephens, a Middle East analyst at the Royal United Services Institute in London. “I think it’s finished.”“I think Vision 2030 is more or less over,” said Michael Stephens, a Middle East analyst at the Royal United Services Institute in London. “I think it’s finished.”
Saudi Arabia, he said, was facing “the hardest time it’s ever been through, certainly the most difficult period of Mohammed bin Salman’s tenure.”Saudi Arabia, he said, was facing “the hardest time it’s ever been through, certainly the most difficult period of Mohammed bin Salman’s tenure.”
The crown prince has given no indication of scratching any specific plans, and his finance minister, Mohammed al-Jadaan, told Bloomberg News that projects such as Neom would simply be delayed.The crown prince has given no indication of scratching any specific plans, and his finance minister, Mohammed al-Jadaan, told Bloomberg News that projects such as Neom would simply be delayed.
Still, Saudis long accustomed to generous fuel and electricity subsidies, cushy government jobs and free education and health care may live far less comfortably than previous generations did, rewriting the relationship between Saudis and their rulers.Still, Saudis long accustomed to generous fuel and electricity subsidies, cushy government jobs and free education and health care may live far less comfortably than previous generations did, rewriting the relationship between Saudis and their rulers.
The government announced Monday that it would triple the country’s value-added tax on goods and services from 5 to 15 percent, strip a roughly $266 monthly allowance for state workers and review other financial benefits paid to employees and contractors.The government announced Monday that it would triple the country’s value-added tax on goods and services from 5 to 15 percent, strip a roughly $266 monthly allowance for state workers and review other financial benefits paid to employees and contractors.
“We are facing a crisis the world has never seen the likes of in modern history,” Mr. al-Jadaan said in a statement. The changes in taxes and benefits, he said, “as tough as they are, are necessary and beneficial to maintain comprehensive financial and economic stability.”“We are facing a crisis the world has never seen the likes of in modern history,” Mr. al-Jadaan said in a statement. The changes in taxes and benefits, he said, “as tough as they are, are necessary and beneficial to maintain comprehensive financial and economic stability.”
While the austerity measures may not make a noticeable dent in the lives of the rich, they are likely to hit hard in the rest of the country.While the austerity measures may not make a noticeable dent in the lives of the rich, they are likely to hit hard in the rest of the country.
“We’re really worried,” said Abdulrahman, a 52-year-old trader in car parts and construction materials in Riyadh who, like many Saudis, asked to be identified only by first name to speak openly about government policy. “The ultimate suffering is going to the end users. The middle and lower class will suffer a lot from this.”“We’re really worried,” said Abdulrahman, a 52-year-old trader in car parts and construction materials in Riyadh who, like many Saudis, asked to be identified only by first name to speak openly about government policy. “The ultimate suffering is going to the end users. The middle and lower class will suffer a lot from this.”
Social changes such as women’s expanded freedoms appear here to stay, attitudes already having begun to shift. But the economic transformation would have taken decades even in the best-case scenario, most analysts agree.Social changes such as women’s expanded freedoms appear here to stay, attitudes already having begun to shift. But the economic transformation would have taken decades even in the best-case scenario, most analysts agree.
The kingdom was counting on oil to finance the transition, its proceeds paying for foreign singers and sports events, educating young Saudis abroad, fostering Saudi filmmakers, developing desert tourism sites and more.The kingdom was counting on oil to finance the transition, its proceeds paying for foreign singers and sports events, educating young Saudis abroad, fostering Saudi filmmakers, developing desert tourism sites and more.
But the price of crude oil plunged by more than half in March after the pandemic froze demand and Prince Mohammed started a price war with Russia. It is now far below what the government needs to balance its budget.But the price of crude oil plunged by more than half in March after the pandemic froze demand and Prince Mohammed started a price war with Russia. It is now far below what the government needs to balance its budget.
Saudi Aramco, the state oil company, said Tuesday that its first-quarter profits had fallen by 25 percent compared with last year.Saudi Aramco, the state oil company, said Tuesday that its first-quarter profits had fallen by 25 percent compared with last year.
“A lot of things that were free may not be free anymore,” said Kristin Smith Diwan, an analyst at the Arab Gulf States Institute in Washington. “It’s a test of the new nationalism. It’ll be more, ‘You’re part of this nation, you have to contribute to the nation.’”“A lot of things that were free may not be free anymore,” said Kristin Smith Diwan, an analyst at the Arab Gulf States Institute in Washington. “It’s a test of the new nationalism. It’ll be more, ‘You’re part of this nation, you have to contribute to the nation.’”
The government has taken care of its own during the pandemic in ways that Americans can only dream of: It has paid to fly Saudis from around the world back home, quarantined them in hotels at government expense and subsidized up to 60 percent of the salaries of private-sector workers.The government has taken care of its own during the pandemic in ways that Americans can only dream of: It has paid to fly Saudis from around the world back home, quarantined them in hotels at government expense and subsidized up to 60 percent of the salaries of private-sector workers.
Saudis face hardly any layoffs; the kingdom has also offered interest-free loans, electricity discounts and other stimulus aid.Saudis face hardly any layoffs; the kingdom has also offered interest-free loans, electricity discounts and other stimulus aid.
But at current oil prices and government spending levels, Saudi Arabia would run out of money in three to five years, forcing it to take on additional debt, said Karen Young, a Gulf analyst at the American Enterprise Institute.But at current oil prices and government spending levels, Saudi Arabia would run out of money in three to five years, forcing it to take on additional debt, said Karen Young, a Gulf analyst at the American Enterprise Institute.
A few analysts said the kingdom was well positioned to quickly resume production when the demand for oil eventually rebounds. Still, no one expects oil prices to soar as high as they did between 2004 and 2013.A few analysts said the kingdom was well positioned to quickly resume production when the demand for oil eventually rebounds. Still, no one expects oil prices to soar as high as they did between 2004 and 2013.
Saudis already live less easily than they did then. After oil prices dropped in 2014, the government cut some subsidies and in 2018 introduced the value-added tax, preparing Saudis for the day when they would rely on private-sector income, not oil largess.Saudis already live less easily than they did then. After oil prices dropped in 2014, the government cut some subsidies and in 2018 introduced the value-added tax, preparing Saudis for the day when they would rely on private-sector income, not oil largess.
By tripling the tax, Saudi Arabia is accelerating the shift away from a welfare state, argued Ali Shihabi, a Saudi commentator. The kingdom’s huge public payroll, which provides stable and well-paying jobs to a majority of Saudis in the labor force, will cushion the tax’s impact, and the coronavirus would have kept people from spending much this year anyway, he said.By tripling the tax, Saudi Arabia is accelerating the shift away from a welfare state, argued Ali Shihabi, a Saudi commentator. The kingdom’s huge public payroll, which provides stable and well-paying jobs to a majority of Saudis in the labor force, will cushion the tax’s impact, and the coronavirus would have kept people from spending much this year anyway, he said.
Updated June 12, 2020Updated June 12, 2020
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
Other analysts found the move counterproductive. Instead of helping businesses and consumers stimulate the economy, Mr. Stephens said, the government was putting the burden of austerity on the people least equipped to weather it.Other analysts found the move counterproductive. Instead of helping businesses and consumers stimulate the economy, Mr. Stephens said, the government was putting the burden of austerity on the people least equipped to weather it.
On social media, some Saudis responded with resignation or patriotism. Others questioned why the Saudi sovereign wealth fund was financing a $370 million takeover of Newcastle United, an English Premier League soccer team, while the government cut spending at home.On social media, some Saudis responded with resignation or patriotism. Others questioned why the Saudi sovereign wealth fund was financing a $370 million takeover of Newcastle United, an English Premier League soccer team, while the government cut spending at home.
If the flashy investments and spending on star-studded concerts continue, analysts said, the kingdom could risk public grumbling, but probably no more than that.If the flashy investments and spending on star-studded concerts continue, analysts said, the kingdom could risk public grumbling, but probably no more than that.
Saudi Arabia has not hesitated to spend heavily on benefits when needed to shore up domestic support and to use force to squelch dissent.Saudi Arabia has not hesitated to spend heavily on benefits when needed to shore up domestic support and to use force to squelch dissent.
And many Saudis remain grateful for the generous benefits they have received. The regional turmoil of the last decade “taught Saudis they have a good deal, warts and all,” said Mr. Shihabi, the Saudi analyst.And many Saudis remain grateful for the generous benefits they have received. The regional turmoil of the last decade “taught Saudis they have a good deal, warts and all,” said Mr. Shihabi, the Saudi analyst.
Khalid, a 50-year-old government employee, said he understood the need for cutbacks, though they would force him to trim spending.Khalid, a 50-year-old government employee, said he understood the need for cutbacks, though they would force him to trim spending.
“Since we’re Saudi, the government gave us a lot for years, and it was there for other countries when they needed help,” he said. “We accept the decision if it will help the government.”“Since we’re Saudi, the government gave us a lot for years, and it was there for other countries when they needed help,” he said. “We accept the decision if it will help the government.”
Abdu Mansour contributed reporting from Taif, Saudi Arabia.Abdu Mansour contributed reporting from Taif, Saudi Arabia.