New budget is a breath of fresh air

A Saudi man at a gasoline station in Jeddah. (AFP photo)

A Saudi man at a gasoline station in Jeddah. (AFP photo)

This column appeared in Arab News on Jan. 03, 2016:

By Rasheed Abou-Alsamh

The new Saudi budget approved and announced last week by the Cabinet is a breath of fresh air in that it addresses the budget shortfalls in intelligent and must-needed ways.

Announcing an immediate 40 percent to 50 percent rise in fuel prices was something long overdue since we have had some of the cheapest gasoline in the world for many years. With the barrel of oil at less than $40 a barrel and our government spending needing at least a price of $90 a barrel to balance our accounts, something had to give.

Our electricity and water rates are also being readjusted upward starting Jan. 11. These rises are also long overdue. Our cheap water and power rates have meant that many Saudis have wasted both by leaving their lights and air-conditioning on the whole day, even when they were not home! This wastage of our resources is sinful and should be stopped. Hopefully, the rate rises will make those who are wasteful more appreciative of our resources, which are not infinite.

Those of us who have lived abroad and have paid much more for our utilities have learned the value of these utilities and have learned how to be thrifty, turning off lights when not using them and not leaving the tap running when shaving or washing the dishes. These are simple behavioral adjustments that any human being can learn.

The introduction of a value-added tax that the Kingdom along with other Gulf Cooperation Council states are planning to introduce perhaps by next year, is also a very good move to raise income for our respective governments. This obviously would be like a sales-tax added to the cost of services and goods, except for food and other essential items. The Kingdom is also going to raise taxes on tobacco and sugary drinks, which is excellent news. There are far too many young smokers in our country, fueled in part by very cheap cigarettes. In the UK and the US, cigarettes are taxed heavily in an official effort to discourage smoking. In New York City a pack of cigarettes can cost $15 because of the taxes. Can you imagine our youth having to pay SR56 for a single pack of cigarettes? Many would stop smoking overnight. Of course, I do not think our taxes on tobacco will initially be as high as that, but I do hope the tax is significant enough to make a sizeable portion of our population reconsider their smoking habits.

Some foreign commentators have been quick to ring the death knell for the Kingdom because of the new budget, calling it austerity-driven. Obviously these people are keen to rush to these conclusions because of ill-will toward us. But they seem to have forgotten that the country has more than $600 billion in foreign reserves, and that we have gone through low oil prices before in the early 1990s, when the barrel of oil hit a low of $20. We survived that and will, God willing, survive this downturn again.

The new budget for sure has seen come cutbacks in spending on the crucial education and health sectors, but nothing very drastic. I was looking at the budgets for our state universities and was surprised that so much was being allocated for each. King Saud University in Riyadh was allocated more than SR5 billion in the new budget, while King Abdulaziz University in Jeddah got more than SR4 billion. Quality education is expensive.

As good citizens we have to do our part to help our leaders balance the books. We cannot expect the state to keep giving us everything we need for free. This is unrealistic and will bankrupt any society that tries to do so. But we also cannot forget the poorer Saudis and the difficulties they will face with higher prices and the inflation that they are sure to bring. The government has assured the public that measures will be put into place to protect them. I hope they will be enough to protect the truly disadvantaged, and that those of us with the means pay our share of these new fees and taxes in order to make a better country for all Saudis.

What Did Cheney Talk About With King Abdullah?

THE LIGHTNING trip that US Vice President Dick Cheney made to Riyadh to hold talks with Saudi King Abdullah just two days after Thanksgiving left all of the American media in the dark and consequently atwitter.

“What did Cheney talk about with King Abdullah, that was so important that he flew 14-hours each way to just spend eight hours on Saudi soil?” many journalists said, scratching their heads.

Officially, the talks encompassed the escalating civil war in neighboring Iraq, the mess in Lebanon, the ongoing Israeli-Palestinian feud and Iran’s expansionist ambitions in the region.

The Washington Post’s Robin Wright appeared on MSNBC to talk about the trip and said she was still trying to crack what the other, secret, topic that was discussed. Since no press corps was taken with Cheney on his plane, and no press conference was held in Riyadh, the press remained in the dark. And as you may know, journalists don’t like being kept in the dark.

I talked to a Saudi source of mine to try and find out what was discussed at that meeting, and my source said that there were two major areas of concern to the US: The ongoing battle within the Saudi royal family between the powerful Interior Minister Prince Naif and King Abdullah, who are not seeing eye-to-eye, and the continued threat of a terrorist attack on Abqaiq, Saudi Arabia’s main oil processing plant in the Eastern Province.

Prince Naif has been an arch-conservative in the ruling family, keeping a tight reign on all security aspects of the Kingdom and being against women driving and giving more political rights to Saudis. This has placed him at odds with King Abdullah’s reformist agenda, through which the first municipal council elections were held last year for the first time in over 40 years, and four reformists were pardoned after being jailed for more than a year and being found guilty by a court of law of promoting dissent in the country.

The threat of a terrorist attack against Abqaiq is not being overstated. Al-Qaeda linked terrorists used two cars laden with explosives last February in an attack on the Abqaiq facility, managing to explode their munitions and damaging the oil processing plant. It was repaired quickly as Simon Henderson wrote in a report for the Washington Institute entitled “Al-Qaeda Attack on Abqaiq: The Vulnerability of Saudi Oil.”

“But Washington must be keenly aware that Saudi oil production remains extremely vulnerable to sabotage. A Saudi police raid on a terrorist hideout last year reportedly uncovered copies of maps and plans of the prestigious, newly producing field of Shaybah. At particular risk also must be the estimated twelve thousand miles of pipeline in the kingdom,” he wrote.

Perhaps more interesting and alarming, is the report by Paul Rogers entitled “Abqaiq’s message to Washington which appeared in November on the website.

A professor at Bradford University in England, Rogers says that the February attack on Abqaiq was more serious than previously reported, and that the US Navy’s Fifth Fleet, which is based in neighboring Bahrain, has been recently tasked to provide security for the Kingdom’s largest oil exporting facility of Ras Tanura which is on the Gulf coast.

“The new development at Ras Tanura – even if it is a naval presence rather than ground troops stationed on the kingdom’s soil…has a wider value to the Bush administration as it tries to gain greater support from Arab states in the western Gulf in its ongoing confrontation with Iran,” writes Rogers.

As Rogers rightly points out, the attack on the Abqaiq facility in February has given the US the chance to once again be directly involved in Saudi security, something it has not been militarily been able to do ever since most US troops were withdrawn from the huge US base outside Riyadh in 2002 and moved to Qatar and Kuwait.

It also allows the US to send the clear signal to Iran that it is still very much present in the Gulf countries and is willing to deploy its military muscle to protect them from any Iranian threat.

But don’t be fooled by the lack of visible US troops in Saudi Arabia. Hundreds of US security and intelligence personnel have been reportedly working quietly behind the scenes for the past three years helping the Saudis deal with their ongoing crackdown on local Al-Qaeda terror groups. Just this week, the Saudi government announced that 139 terrorists, who had been planning suicide attacks, had been arrested around the country. I’m sure that Americans helped in these arrests, and have helped foil many other attacks by Al-Qaeda.

So, when I read whiny neo-cons in the US complain that Cheney was just kow-towing to the Saudis by flying to Riyadh last week for talks, they couldn’t have been more wrong. The stakes are high in the fight against terror and Al-Qaeda, and never more so than in Saudi Arabia.

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