Saudi King Salman’s royal decrees restore civil service and military allowances

Saudi Arabia's King Salman issued a series of royal decrees on Saturday, one of which restores financial allowances for civil servants and military personnel that had been cut under austerity measures.

"The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff," said the decree, broadcast on state-run Ekhbariya TV.

In September, Saudi Arabia cut ministers' salaries by 20 percent and scaled back financial perks for public sector employees in one of the energy-rich kingdom's most drastic measures to save money at a time of low oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis. The decree cancelled those orders, saying they had come as a response to the sharp drop in the price of oil, the main source of state revenues.

It said the measures had helped put the kingdom on a path to achieve the objectives set out in its economic reform programme, Vision 2030, which include improving state revenues and curbing the budget deficit.

A son of King Salman, deputy crown prince Mohammed bin Salman, 31, is second in line to the throne and is one of the kingdom's most powerful figures. He holds the post of defence minister and is also pushing the wide-ranging social and economic reform programme.

Under the reforms being directed by the deputy crown prince, Saudi Arabia is trying to make government operations more efficient and officials more accountable.

Following the decree, economic officials highlighted figures pointing to economic recovery:

Saudi Arabia's deputy economy minister said the kingdom had reduced its deficit in the first quarter of 2017 by more than half in part because of prudent public spending.

"The fact that the first quarter deficit was 26bn riyals [$6.93bn] when 54bn riyals was projected at the beginning of the year. This is a very excellent step toward rationalised spending," Mohammed al-Tuwaijri, deputy minister of economy and planning told state-run TV.

Saudi's deficit shrank to 297bn riyals ($79bn) in 2016, down from a record 367 billion-riyal gap in 2015. In its 2017 budget plan, Riyadh said the deficit would shrink further this year to 198bn riyals because of higher oil prices and non-oil revenues.

The Saudi central bank governor also told state-run TV that the kingdom's foreign currency reserves were healthy, representing 80 percent of GDP, and that the country's trade deficit could drop this year amid a decline in imports.

"The trade deficit is expected to drop this year and possibly to record as a surplus due mainly to the decline in imports and the rising value of exports," Ahmed al-Kholifey said.

"The state of foreign reserves ... is very good, which accounts for 80 percent of GDP and this represents a good line of defence to protect the local economy from any external fluctuations," he said.

Other decrees issued at the same time appointed another of Salman's sons, Prince Abdulaziz bin Salman, state minister for energy affairs.

Prince Abdulaziz is a long-time energy policy official who was appointed deputy oil minister in 2015.

Further decrees replaced the kingdom's information and civil service ministers and set up a committee to investigate allegations of abuse of the civil service office.

A national security centre was established under the royal court and Ibrahim al-Omar was named governor of the Saudi Arabian General Investment Authority, an agency managing foreign investment in the kingdom known as SAGIA.

Among other orders issued by King Salman, the head of the army Lieutenant General Eid al-Shalwi was removed. Fahad Bin Turki was promoted to replace him.

The army is helping to defend Saudi Arabia's southern border from rebel incursions but analysts say that, in Yemen itself, coalition troops from the United Arab Emirates have the most prominence in ground operations being conducted with local forces.

Saudi Arabia leads the air campaign, but after two years of coalition intervention, analysts say Yemen is more unstable than ever, and one called it a "quagmire".

Saudi military personnel in the Yemen operation will receive a salary bonus of two months, the king also ordered, in spite of a budget deficit forecast to be $53bn this year following the collapse in global oil prices since 2014.

Salman fired minister of civil service Khaled al-Araj, who will be investigated by a committee of the Royal Court.

The Arab News reported late last year that Araj was under investigation by the kingdom's anti-corruption commission for the alleged "irregular hiring" of his son.

In other changes, Salman dismissed minister of information and culture Adel al-Turaifi and replaced him with Awad al-Awad.

Minister of communication and information technology Mohammed al-Suwaiyel also lost his job, replaced by Abdullah al-Swaha.

The king changed some regional governors, along with numerous senior bureaucrats including the head of the General Authority of Sports as the kingdom tries to provide more athletic activities for its people.