The economic downturn Saudi Arabia is going through, due to the lockdown over the past long months, the sharp decline in oil prices, and the suspension of the Hajj and Umrah groups, has begun to raise many questions about the capabilities of Saudi Crown Prince Mohammed bin Salman in managing crises, especially since he has no experience in the fields of politics, economics or even social life.
The economic downturn in which the Kingdom entered is also strong due to the Crown Prince’s policies which posed many challenges and difficulties to the idea of transformation from an economy entirely dependent on oil to a diversified economy.
In addition to poverty suffered by people alone compared to the luxurious life of members of the ruling family. The austerity measures of the Crown Prince caused an increase in prices to unprecedented levels, higher taxes on citizens, and cutting all benefits and aids to the people.
The past days revealed the failure of bin Salman’s policies in facing the economic challenges, and the increasing budget deficit, as reports of Saudi government institutions revealed a significant increase in the prices of all products, services, and markets in KSA.
The Saudi Crown Prince’s limited experience did not allow him to see that the austerity measures he imposed on the people would limit the competitiveness of the Saudi economy with the rest of the Gulf countries, especially in attracting foreign investments to the Kingdom’s markets, as these measures send a message to investors in the markets of other countries, that he is ready to impose more difficult and solid decisions to maintain the deficit within the limits acceptable to the government, and he does not care about the interest of the investor, or the trader who trusted our markets, especially after the owners of companies in the Kingdom’s markets closed their companies after increasing taxes and raising the cost of residence for workers and their families which forced many companies to terminate their projects in the Kingdom.
Temporary Economic Solutions
Economic analysts have made it clear that all the solutions that bin Salman pursues to deal with the country’s economic crises are temporary and interim solutions that do not address the real crises. This makes the Kingdom’s markets subject to economic shocks even if they stabilize for a while. Whether those solutions are by pumping money into the local market or raising taxes without being matched by services, creates a balance between what the investor pays and what he gets from the state, and the decline in the level of supply in KSA economically has negative effects on many projects that deal directly with the consumer, where a major recession occurred.
This caused a decline in profits, and thus caused the termination of the services of many employees in KSA and residents, and increased the unemployment rate to nearly 15%, according to the same state reports.
