Is the erosion of the Saudi middle class a threat to stability?

A lot is expected from the new government reshuffle. Among the many challenges that need to be addressed is the erosion of the middle class, which Saudi economists and analysts warn will be detrimental to the development, strength, security, and stability of society. Therefore, there is a dire need to produce new mechanisms to guarantee and maintain a strong and secure Saudi middle class.

Decision makers are expected to expedite economic reforms and come up with more effective long-term strategies to address the needs of a growing population that has soared from six million in 1970 to 28 million today.

Government policies should not be confined to the present limited fixes that have caused further deterioration of the middle class. According to a recent study by the General Organization for Social Insurance (GOSI), the estimated number of the middle class workforce is within the range of 30 percent of the Saudi population while in other countries that have a similar per capita income, the figures are around 60 percent.

There are many reasons behind this crisis. The state is unable to provide adequate support because the economy is largely dependent on expat labor that continues to occupy most jobs. The government is faced with the challenge of providing employment for a rising population of unqualified Saudi professionals and unskilled laborers. The subject is a major concern for Saudi researchers, economists and state officials.

Why is the middle class still suffering?

There is no doubt that the government is eager to revive the middle class. The Ministry of Labor is focused on providing employment and better wages for Saudi youth in the public and private sectors. A nationwide campaign is being conducted to monitor market prices of goods and services and there are entrepreneurial incentives to encourage small and medium size businesses.

Moreover, the state offers welfare programs to support the growing numbers of the underprivileged. More than 20 percent of the total population receive welfare. Billions are spent to address the problem.

So why is the middle class still suffering? Why are the initiatives inadequate and why is the allocated money spent in vain and all sincere efforts wasted? Why is it that only a few businesses manage to survive and many continue to struggle to pay their bank debts? Obviously, we need to reassess our strategies, address our challenges more appropriately and implement corrective measures with more efficiency. We can no longer afford to bear soaring market prices, poor wages, lack of adequate job opportunities, inefficient support for small and medium size businesses, and the menace of nepotism and corruption. All these shortcomings are the reasons behind the erosion of our middle class today.

Saudi families are struggling to maintain the basic needs of adequate health care, housing, retirement savings, modern day necessities of a car, a computer and a cell phone, school bills and modest summer vacations and recreation for their children. They are in need of better wages and decent benefits to maintain a decent modern-day lifestyle. Officials need to give serious attention to the needs of the average middle class family in order to preserve social stability nationwide.

According to economic experts, “families that are neither rich nor poor may be under more downward economic and financial pressure. They are under the constant fear of falling below the poverty level”. They assert that one of the reasons why families feel that they are struggling is that their wages remain limited. They also feel insecure because they do not have enough money saved for emergency eventualities or for retirement.

Middle class people include educated professionals who should be reasonably paid. They are teachers, journalists, social scientists, researchers, managers, doctors, lawyers, architects and engineers. Most decisions and laws are usually based on the needs and beliefs of middle class people. They are the professionals who shape public opinion. According to some modern theories a large middle class is considered to be “the backbone of any country”.

Economists maintain that middle class families can help the economy and allow society to prosper and develop. If people have a comfortable and steady income, they will be encouraged to take entrepreneurial risks, volunteer to serve the community and make a better contribution to society. When their income is not adequate, they become a liability and a burden on society. The Saudi middle class continues to be on shaky ground, and if this situation is not given more serious attention, we will be compromising an essential stabilizing force in our society.

This article was first published in the Saudi Gazette on May 2, 2015.

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Samar Fatany is a Chief Broadcaster in the English section at Jeddah Broadcasting Station. Over the past 28 years, she has introduced many news, cultural, and religious programs and has conducted several interviews with official delegations and prominent political personalities visiting the kingdom. Fatany has made significant contributions in the fields of public relations and social awareness in Saudi Arabia and has been involved in activities aiming at fighting extremism and enhancing women’s role in serving society. She has published three books: “Saudi Perceptions & Western Misconceptions,” “Saudi Women towards a new era” and “Saudi Challenges & Reforms.”