JEDDAH, 8 December 2007 — Government employees in the Kingdom are expected to receive a 30-percent salary increase after some private companies declared pay hikes of up to 40 percent as part of efforts to confront an unprecedented rise in consumer prices.
According to a report carried by Al-Arabiya satellite channel, a decision on the salary increase for public sector employees would be issued shortly. But there was no official confirmation of the report.
Abdullah Dahlan, a member of the Shoura Council, emphasized the need for urgently discussing the issue in the Shoura in order to present its recommendations to the Council of Ministers.
“I am very happy to learn this news and hope the government would take a quick decision on this matter,” said Mohammed Shaker Al-Dahlawi, director of compensations at the Ministry of Transport.
He also urged the Ministry of Commerce and Industry to prevent businessmen from increasing prices of essential commodities further after the new salary raise as they did last time.
In August 2005, Custodian of the Two Holy Mosques King Abdullah issued an order raising the salaries of public employees, including military officers, by 15 percent. Businessmen exploited the increased purchasing power of consumers and hiked prices.
Al-Dahlawi called on the government to take steps for bolstering the value of the Saudi riyal against other currencies as part of efforts to control growing inflation in the country. The riyal’s peg to a weakening US dollar has made imports more expensive.
“I believe that the large number of loans received by people is another reason for inflation,” he said, proposing a 25 percent cut in such loans. An increase in salaries and reeling in inflation would reduce the demand for consumer loans.
Al-Dahlawi said he favored de-pegging of the riyal from the declining dollar and said it was essential to strengthen the Saudi currency.
Rising inflation has sent shockwaves among Saudis and expatriates.
“It’s normal that if prices increase, the salaries increase with them,” said Sultan Abdul Wahab, a high school teacher. He noted that UAE increased the salaries of government employees by 70 percent to meet the high cost of living there.
The UAE increased salaries by 70 percent and Kuwait is studying to increase the salaries of workers in the country by 30 percent. There are strong rumors that Qatar might increase salaries by 200 percent.
Published reports on Wednesday named Saudi companies, including the state-owned oil giant Saudi Aramco, that raised wages by 15-40 percent to offset the impact of rising inflation on employees. It said Aramco decided to raise wages of low-levels employees by 10 percent and agreed lesser increases for mid-level and top management.
Mobile telephone operator Etihad Etisalat (Mobily) has decided to raise wages by 20-40 percent for its 2,800 employees, a company official was quoted as saying.
The report also mentioned that all employees of Saudi Investment Bank will be given a 15-percent salary raise from January next year.
