King Abdullah, in Speech, Promises Reforms and Doles out Cash, Benefits

News

Big news in Saudi Arabia today: King Abdullah announced a multibillion dollar package of “reforms, raises, cash, loans and apartments on Friday in what appeared to be the Arab world’s most expensive attempt to appease residents inspired by the unrest that has swept two leaders from power,” the Associated Press reports.

This package, and a previous one announced a few weeks ago, amount to some pretty impressive wealth distribution. There is something in it for nearly everyone.

In an email, Banque Saudi Fransi’s John Sfakianakis wrote:

The measures are geared to support the economic inclusiveness of the population and increase the filtering down process. Some of the measures have a direct hand out character but others such as housing and medical services are attempting to address essential sustainability issues. The announced social policies are designed to ease the burden of high property prices and housing market imbalances, while helping its young population cope with a mounting unemployment challenge. We find the additional housing benefits for those in need to be well timed and place. Some SR250 billion will be allocated for housing measures (to the General Housing Authority) as well as ordering the building of 500,000 housing units. However, we do not have any clarity about the beneficiaries of planned housing units. Also building half a million units takes time. The Real Estate Development Fund will increase the maximum facilities provided from SR300,000 to SR500,000. We believe housing is a very crucial component of the economy even if the half a million units will not be constructed in one year. The Real Estate Development Fund has received an injection of fresh capital of SR40 billion as part of the February measures.”

We will closely monitor the packages and all of the details in the coming days, but our quick analysis is that this will do wonders for Saudi Arabia’s middle class and youth.