With Inflation At 11%, Saudis Speak: "Gas Prices Are Low Here. So What? Can I Drink It?" - IHT

[hatrack]

While Saudis don't feel the pain at the pump, they feel it everywhere else, paying more at grocery stores and restaurants and for rent and construction material. While the country is getting richer selling oil at prices that climbed to a record US$145 last week, inflation has reached almost 11 percent, breaking double-digits for the first time since the late 1970s. "Gas prices are low here, so what?" said Muhammad Abdullah, a 60-year-old retiree. "What can I do with gas? Drink it? Take it with me to the supermarket?"

Al-Mazeen says his monthly grocery bill has doubled — to US$215 — compared to last year, when oil was at around US$70 a barrel. During that time period, the price of rice has doubled to about 72 cents a pound, and a pound of meat has gone up more than a third to about US$4. Moreover, Saudis are grappling with unemployment — estimated at 30 percent among youths aged 16 to 26 — and a stock market that is down 10 percent since the beginning of the year.

Many Saudis are realizing that this oil boom will not have the same impact as the one in the 1970, which raised Saudis from rags to riches. This time, the wealth isn't trickling down as fast or in the same quantities. One reason is the kingdom's growing population, says John Sfakianakis, chief economist at the Saudi British Bank. In the 1970s, the population of Saudi Arabia was 9.5 million. Today, it's 27.6 million, including 22 million Saudi citizens.

That means the state, which controls nearly all oil income, has to spread the wealth among more people. Besides the country's generous welfare system of free education and other benefits for citizens, the public sector employs some 2 million people, and 65 percent of the budget goes to salaries.

EDIT

http://www.iht.com/articles/ap/2008/07/07/africa/ME-GEN-Saudi-Wheres-the-Wealth.php

[Warpy]

1. The royals haven't shared wealth with the people since the 70s

which makes me think that country is overdue for a change in government.

The 9/11 hijackers, it must be remembered, were mostly middle class Saudis.

Most people in oil rich countries are sick of having the US military prop up brutal governments in the name of keeping the oil flowing.

9/11 was the symptom. Oil driven foreign policy is the disease.