New Saudi King Decides To Give $32 Billion To His Country's Citizens
The new king of Saudi Arabia celebrated his crowning with an unbelievably generous gift for his citizens.
Salman bin Abdulaziz Al Saud became king of Saudi Arabia last month after his brother King Abdullah passed away.
It is a tradition in the conservative, oil-rich nation for rulers to earn loyalty with gifts, and it sounds like King Salman really tried to win over his citizens.
According to Vice, he bestowed a two-month stipend to all government employees, servicemen, students and pensioners in addition to hefty grants for many private companies and literary and sports organizations.
The gifts combine to a total of over $32 billion.
King Salman tweeted shortly after announcing the gracious act,
Dear people: You deserve more and whatever I do will not be able to give you what you deserve.
Approximately 3 million out of the country's 5.5 million working individuals are state employees, and private companies have also reportedly given bonuses to workers.
Therefore, nearly every single member of Saudi Arabia's workforce has seen his or her bank account increase thanks to King Salman.
The founder of Dubai-based Emerging Markets Intelligence and Research, Trevor McFarlane, told Vice that a coronation typically comes with handouts in Saudi Arabia.
Although it may seem bizarre to Western policy makers, Gulf monarchies are government-led economies and the social contract dictates such bonuses as not just necessary, but almost expected from some quarters of society.
The tradition began with tribal sheikhs who believed generosity was just as important as wisdom and bravery in terms of qualities for leadership, Chris Davidson, author of "After the Shiekhs," added.
Such generosity and the standards of living it produces, however, may not be replicated for some time.
Global oil prices have fallen considerably, and Vice reports around 90 percent of the Saudi Arabian government's income comes from exporting oil.
Saudi Arabia has at least $700 billion in savings from formerly high oil prices, but Davidson told Vice the industry's transformation will prevent Saudi Arabia from ever setting such prices again.
An extension and indeed ramping up of pre-2011 wealth distribution strategies at a time when the kingdom is entering into steep deficit territory… does not protect the long-term interest of citizens.
The country's falling credit rating has it on track to run up a deficit of up to $39 billion in 2015.
Saudi Arabia's population is also reported to be skyrocketing, so how its new economy will play out amidst these changes remains to be seen.