RIYADH (Reuters) - Saudi Arabia reinstated financial allowances for civil servants and military personnel on Saturday after better-than-expected budget figures, ending unpopular cuts to a key perk triggered by low oil prices and cheering the stock market.

FILE PHOTO: Saudi King Salman salutes as he attends a graduation ceremony and air show marking the 50th anniversary of the founding of King Faisal Air College in Riyadh, Saudi Arabia, January 25, 2017. REUTERS/Faisal Al Nasser/File Photo

The king issued a royal decree restoring “all allowances, financial benefits, and bonuses” following calls for protests in four Saudi cities over the weekend, adding a two-month salary bonus for forces fighting in the kingdom’s intervention in Yemen.

The Saudi share index .TASI gained 1.0 percent on Sunday, buoyed by expectations of a positive impact from higher disposable incomes on consumer sectors like retail and food.

In September, Saudi Arabia cut ministers’ salaries by 20 percent and scaled back perks for public sector employees in one of the energy-rich kingdom’s most drastic measures to save money after tumbling oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis, and prompted complaints about the impact of austerity on ordinary Saudis.

Under the Twitter hashtag “April 21 movement,” Saudis circulated statements last week demanding the reinstatement of benefits, a halt to the sale of shares of state oil giant Aramco, a constitutional monarchy and the restoration of the powers of the religious police.

Security forces lined the streets of central Riyadh over the weekend, although no demonstrations appeared to materialize.

IMPROVING FISCAL POSITION

The decree said the cuts had come as a response to the sharp drop in the price of oil, which sank to a low of around $28 last year. Prices have rebounded since late 2016, with Brent crude LCOc1 now trading around $52 a barrel compared to last year’s average of $45.

Minister of State Mohammed Alsheikh said Deputy Crown Prince Mohammed bin Salman recommended the change after better-than-expected budgetary performance in the first quarter of 2017.

“The government has conducted a review of the measures initiated in the fall in relation to the public-sector employees’ allowances,” Alsheikh said in a statement provided to Reuters.

“A number of fiscal adjustment measures were taken over the last two years which led to a strong improvement in the government’s fiscal position.”

Alsheikh and other key officials highlighted trends pointing to economic recovery.

The central bank governor said the trade deficit was expected to drop in 2017, possibly moving into a surplus, while the deputy economy minister said the kingdom had reduced its deficit in the first quarter of the year by more than half, in part because of prudent management of government spending.

“We believe this move will boost positive sentiment as domestic demand recovers on the back of enhanced government employees’ disposable income,” said Alsheikh.

In a further concession to low-income Saudis, the central bank instructed banks to maintain the current favorable terms of consumer and property loans, having ordered their rescheduling in the fall to aid Saudis affected by the cuts.

PERSONNEL CHANGES

Other decrees installed two of King Salman’s sons in key posts, further securing a next generation of Al Saud leadership.

Prince Khaled bin Salman, an F-15 pilot who has trained in the United States, was made ambassador to Washington. Another son and long-time oil policy official, Prince Abdulaziz bin Salman, was appointed state minister for energy affairs.

Saudi Arabia's King Salman bin Abdulaziz Al Saud, attends a banquet hosted by Shinzo Abe, Japan's Prime Minister, at the prime minister's official residence in Tokyo, Japan, Monday, March 13, 2017. REUTERS/Tomohiro Ohsumi/Pool

The decrees also made a handful of young princes from various branches of the Al Saud family deputy governors of the kingdom’s provinces.

A national security center was established under the royal court and Ibrahim al-Omar was named governor of the Saudi Arabian General Investment Authority (SAGIA), an agency managing foreign investment in the kingdom.

Further decrees replaced the information and civil service ministers and set up a committee to investigate allegations of abuse for the latter. The kingdom’s anti-corruption body Nazaha concluded the minister had hired his son in a post for which he was unqualified.</s>Saudi Arabia’s King Salman issued a royal decree Saturday restoring financial allowances for civil servants and military personnel that had been cut under austerity measures.

“The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff,” said the decree, broadcast on state-run Ekhbariya TV.

In September Saudi Arabia cut ministers’ salaries by 20 percent and scaled back financial perks for public sector employees in one of the energy-rich kingdom’s most drastic measures to save money at a time of low oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis.

The decree canceled those orders, saying they had come as a response to the sharp drop in the price of oil, the main source of state revenues.

It said the measures had helped put the kingdom on a path to achieve the objectives set out in its economic reform program, Vision 2030, which include improving state revenues and curbing the budget deficit.

Following the decree, economic officials highlighted figures pointing to economic recovery. The central bank governor said the kingdom’s trade deficit was expected to drop in 2017, possibly moving into a surplus.

The deputy economy minister said the kingdom had reduced its deficit in the first quarter of the year by more than half, in part because of prudent public spending.

 

 Other decrees issued at the same time appointed one of Salman’s sons, Prince Khaled bin Salman, ambassador in Washington and another, Prince Abdulaziz bin Salman, state minister for energy affairs.

 Further decrees replaced the kingdom’s information and civil service ministers and set up a committee to investigate allegations of abuse of the civil service office.

Saudi Arabia's King Salman (right) meets with U.S. Defense Secretary James Mattis, in Riyadh, April 19, 2017. Salman restored financial perks for Saudi Arabia's military and civil servants, who make up two-thirds of working Saudis.</s>RIYADH: Saudi Arabia's King Salman issued a royal decree on Saturday restoring financial allowances for civil servants and military personnel that had been cut under austerity measures.

"The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff," said the decree, broadcast on state-run Ekhbariya TV.

In September Saudi Arabia cut ministers' salaries by 20 percent and scaled back financial perks for public sector employees in one of the energy-rich kingdom's most drastic measures to save money at a time of low oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis.

The decree said they were a response to the sharp drop in the price of oil, the main source of state revenues.

It said the measures had helped the kingdom begin achieving the objectives set out in its economic reform program, Vision 2030, which include improving state revenues and curbing the budget deficit.

Other decrees appointed one of Salman's sons, Prince Khaled bin Salman, ambassador in Washington and another, Prince Abdulaziz bin Salman, state minister for energy affairs.

Further decrees replaced the kingdom's information and civil service ministers and set up a committee to investigate allegations of abuse of the civil service office.

A national security center was established under the royal court and Ibrahim al-Omar was named governor of the Saudi Arabian General Investment Authority, known as Sagia.</s>Saudi Arabia’s King Salman issued a royal decree on Saturday restoring financial allowances for civil servants and military personnel that had been cut under austerity measures. “The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff,” said the decree, broadcast on state-run Ekhbariya TV. In September Saudi Arabia cut ministers’ salaries by 20 percent and scaled back financial perks for public sector employees in one of the energy-rich kingdom’s most drastic measures to save money at a time of low oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis. The decree cancelled those orders, saying they had come as a response to the sharp drop in the price of oil, the main source of state revenues. Oil prices sank to a low of around $28 last January amid a two-year price slump. Since late 2016, however, prices have partially rebounded, with Brent crude now trading around $52 a barrel compared to last year’s average of $45.

Minister Of State Mohammed Alsheikh said Deputy Crown Prince Mohammed bin Salman, who serves as chairman of the Council for Economic and Development affairs, recommended the reinstatement of allowances after an official review and better-than-expected budgetary performance in the first quarter of 2017. “The government has conducted a review of the measures initiated in the fall in relation to the public-sector employees’ allowances. A number of fiscal adjustment measures were taken over the last two years which led to a strong improvement in the government’s fiscal position,” said Alsheikh.

He joined other key officials in highlighting figures pointing to economic recovery. The central bank governor said the trade deficit was expected to drop in 2017, possibly moving into a surplus, while the deputy economy minister said the kingdom had reduced its deficit in the first quarter of the year by more than half, in part because of prudent management of government spending.

“We believe this move will boost positive sentiment as domestic demand recovers on the back of enhanced government employees’ disposable income,” said Alsheikh.

PERSONNEL CHANGES

 Other decrees issued at the same time appointed one of Salman’s sons, Prince Khaled bin Salman, ambassador in Washington and another, Prince Abdulaziz bin Salman, state minister for energy affairs. Prince Khaled is an F-15 pilot who has trained in the United States and carried out air strikes against the Islamic State militant group in Syria. Prince Abdulaziz is a long-time energy policy official who was appointed deputy oil minister in 2015.

Further decrees replaced the kingdom’s information and civil service ministers and set up a committee to investigate allegations of abuse of the civil service office. A national security centre was established under the royal court and Ibrahim al-Omar was named governor of the Saudi Arabian General Investment Authority, an agency managing foreign investment in the kingdom known as SAGIA.

For all the latest World News, download Indian Express App now</s>RIYADH, April 22 (Reuters) - Saudi Arabia's King Salman issued a royal decree on Saturday restoring financial allowances for civil servants and military personnel that had been cut under austerity measures.

"The royal order returns all allowances, financial benefits, and bonuses to civil servants and military staff," said the decree, broadcast on state-run Ekhbariya TV.

In September Saudi Arabia cut ministers' salaries by 20 percent and scaled back financial perks for public sector employees in one of the energy-rich kingdom's most drastic measures to save money at a time of low oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis.

The decree cancelled those orders, saying they had come as a response to the sharp drop in the price of oil, the main source of state revenues.

It said the measures had helped put the kingdom on a path to achieve the objectives set out in its economic reform programme, Vision 2030, which include improving state revenues and curbing the budget deficit.

Following the decree, economic officials highlighted figures pointing to economic recovery. The central bank governor said the kingdom's trade deficit was expected to drop in 2017, possibly moving into a surplus.

The deputy economy minister said the kingdom had reduced its deficit in the first quarter of the year by more than half, in part because of prudent public spending.

Other decrees issued at the same time appointed one of Salman's sons, Prince Khaled bin Salman, ambassador in Washington and another, Prince Abdulaziz bin Salman, state minister for energy affairs.

Prince Khaled is an F-15 pilot who has trained in the United States and carried out air strikes against the Islamic State militant group in Syria.

Prince Abdulaziz is a long-time energy policy official who was appointed deputy oil minister in 2015.

Further decrees replaced the kingdom's information and civil service ministers and set up a committee to investigate allegations of abuse of the civil service office.

A national security centre was established under the royal court and Ibrahim al-Omar was named governor of the Saudi Arabian General Investment Authority, an agency managing foreign investment in the kingdom known as SAGIA. (Reporting by Ali Abdelaty, Sami Aboudi and Katie Paul; Writing by Tom Finn; Editing by Andrew Roche and Jonathan Oatis)</s>Saudi Arabia has replaced its ambassador to the United States, naming a son of King Salman to the post in a shake-up of the country's top leaders.

The official Saudi Press Agency on April 22 said Prince Khaled bin Salman bin Abdulaziz has been appointed ambassador to the United States, a key ally of Saudi Arabia.

He replaces Prince Abdullah bin Faisal bin Turki as the envoy to Washington.

The new ambassador is an F-15 pilot who received U.S. training and carried out air strikes against the Islamic State (IS) militant group in Syria.

Saudi Arabia also announced that Prince Abdulaziz bin Salman, another of the King's sons, had taken the post of state minister for energy affairs.

Muhammad al-Suwaiyel, the minister of communication and information technology, was also replaced, with Abdullah al-Swaha taking that position.

King Salman also issued a royal decree to restore financial allowances for civil servants and military personnel that had previously been cut.

Last September, Saudi Arabia slashed ministers' salaries by 20 percent and reduced financial perks for public-sector employees in a series of austerity measures made in the face of lower oil prices.

Based on reporting by AFP, Reuters and The Arab News
Saudi Arabia's King Salman issues a number of royal decrees, one which restores financial allowances for civil servants and military personnel that had been cut seven months ago in response to the drop in oil prices.