A massive socio-economic handout initiative announced by King Abdullah for Saudis over the past few weeks will cost the Gulf country nearly SR635 billion ($170 billion), the Kingdom’s largest bank said on Tuesday.
The estimates by National Commercial Bank (NCB) are far higher than earlier projections by another Saudi bank, which put the total costs at around SR485 billion ($131 billion), including nearly $94 billion for Friday’s initiative.
In a study sent to Emirates 24/7, NCB said the two initiatives would create nearly 150,000 jobs for Saudis directly and indirectly, nearly a third of the estimated number of jobless Saudis of around 450,000.
The report said King Abdullah’s first handout, announced last month, involved around SR135 billion while Friday’s initiative would cost SR500 billion.
“Less than a month ago, King Abdullah announced a series of benefits that amounted to SAR135 bn. Last Friday, the second round of decrees was announced and the appropriations amount to SAR500 billion, making the total of non-budgeted expenses to SAR635 billion,” it said.
It said the highlight of the second announcement was the approval of constructing 500,000 housing units across the country with an allocated amount of SR250 billion. This was coupled with raising the upper limit in housing loans to SR500,000 from the Real Estate Development Fund, a 67 per cent increase.
In addition, 60,000 jobs are to be created under the Ministry of Interior while a much needed minimum monthly wage has been set for government workers at SR3,000. As for those who are seeking jobs and are unemployed, a monthly salary of SR2,000 will help them ease the job seeking process.
“The King’s willingness to inject huge amounts of capital into the domestic economy reassures the commitment of the government to enhance quality of life in Saudi Arabia,” the report said.
“The series of decrees will help create over 150,000 jobs, directly and indirectly, over the long-run. As for current expenditures, the announcement included a two-month salary to all Saudi public sector workers and students under government scholarships. The latter decision was also announced by numerous private sectors in appreciation to the King’s gratitude to Saudi citizens. “