JEDDAH, 3 November 2006 — Now that the candy wrappers have been scattered by the wind and the last of the iftar tents and holiday lights have all gone, many people across the Kingdom are tragically awakening to near financial ruin.
Many families have become economically crippled this year by the sharp financial costs relating to buying back-to-school supplies, Ramadan necessities and Eid Al-Fitr expenses immediately following each other.
“We barely have enough to make ends meet this year. It sort of took us by surprise,” said Majid Imam, a Saudi father of two from Makkah. “Many were financially hit this year and unless people had extra savings, I don’t think they’re going to survive,” he added.
Some have even taken up second jobs to ease their financial woes. “I work during the day and I am also a taxi driver at night,” said one Saudi father preferring to remain anonymous. “I have five children and I am doing this because no matter what the cost is, I want to see them happy and get what they need, as any father would,” he smiled.
While trying to tide over the problems, many families and small investors are now finding themselves being forced to take loans, invest in the stock market and Initial Public Offerings (IPOs) in the hope that subscription prices would triple or quadruple.
“I don’t think it was just the synchronizing of the shopping seasons that caused the problem. I think that the stock market crash had an adverse effect especially on small investors who had borrowed, overspent and now find themselves in debt,” said Mazen Tammar, a senior economist at the National Commercial Bank in Jeddah.
When asked by Arab News how people could financially get back on their feet he said, “My recommendation to those in debt is to plan for future. Money management is a vital part of attaining economic health and stability. Those with a fixed income and little or no savings and those who live on salaries need to especially draw up a budget plan. They should also be careful not to over-prioritize purchasing items considering them to be a necessity when they are wants not needs.”
In an effort to better the living conditions of Saudi citizens, one of the first royal decrees issued by Custodian of the Two Holy Mosques King Abdullah was to arrange for the Kingdom’s economic surplus of SR98 billion to be used to increase salaries paid to government employees, military personnel, and pensioners by 15 percent.
Another endeavor the king made to help the citizens was to reduce gasoline prices.
According to statistics provided by Euromonitor International, the world-renowned market research company, credit card sales were up in the Kingdom with approximately 11 million credit cards in circulation. The financial card market is also expected to grow to an estimated SR323 billion in 2009 — an increase of 41 percent — with the number of cards in circulation increasing to 20 million in the same year.
“My advice to people when banks offer credit cards is just to say no,” said Ayman Al-Shariff, a Saudi father of nine and an Aramco employee from Yanbu. “I have six different credit cards through various local banks and have nearly completely used every one of them,” he admitted.
Many banks, realizing that the majority of clients were running on a tight budget this season capitalized on the situation by launching an aggressive credit card promotion campaign offering unique rates and special gifts just for signing up.
Some advertisements were even found at places such as public rest rooms, on escalators and attached to the handles of shopping carts in hypermarkets across the country.
