Saudi government attempts to ease housing problem, insulate kingdom against revolts in parts of Arab world
Top OPEC oil exporter Saudi Arabia will draw on its reserves to help fund
government handouts unveiled by King Abdullah last week to address social
pressures, its finance minister said on Sunday.
Abdullah returned home on Wednesday from three months of medical treatment
abroad and unveiled benefits for Saudis worth around SR135bn ($36bn) an
apparent bid to insulate the kingdom from an Arab protest wave.
"We will fund this from the budget [but] we'll need to draw on reserves
to cover it," Finance Minister Ibrahim Alassaf told Al Arabiya TV channel,
adding that the measures would boost confidence in the biggest Arab economy.
Saudi Arabia has boosted foreign reserves over the past years thanks to
continued high oil prices. These hit 1.65 trillion riyals ($440bn) by the end
of December, according to the central bank.
Under its budget unveiled in December, Saudi Arabia plans to spend SR580bn in
Part of the king's handouts will go to new funds to help Saudis to get
housing loans, a pressing issue for the Gulf Arab state's rising local population
of 18 million.
"We are looking into two new initiatives... to facilitate obtaining
credit," Assaf said.
"The citizen can go to the banks and tap a special fund. This makes it
possible to the banks to give more credit and decrease the costs for the
citizens," Assaf said.
Saudi Arabia has so far escaped popular protests against poverty, corruption
and oppression that have raged across the Arab world, toppling entrenched
leaders in Egypt and Tunisia and spreading to Bahrain and Libya.
Saudi Arabia has pledged to spend $400bn until 2013 to upgrade its
infrastructure and has launched a plan to build five economic and industrial
cities to create new jobs. But several international firms have pulled out of
projects due to a credit squeeze after the global financial crisis.