Saudi Arabia has announced that salaries for government employees will no longer be calculated according to the Islamic calendar, but according to the Western Gregorian calendar.
The change is expected to be resisted by religious conservatives and comes as part of huge cutbacks in government spending and subsidies.
Until now, Saudi Arabia has calculated the pay for public servants according to the Hijri lunar calendar, in which a year is 11 days shorter than in the Western system. By switching to the Gregorian calendar, public servants will effectively have to work an extra 11 days a year with no extra pay.
According to Joseph Kechichian, a senior fellow at the King Faisal Center for Research and Islamic Studies in Saudi Arabia, the change is part of a wider policy to slash government spending: “There are too many expenses that have to be settled. The subsidies are accumulating, and the price of oil is down. And some people are going to hurt as a result of this latest decision.”
For decades, the Saudi government has operated a generous welfare state for its citizens, backed by oil revenue. Essentials such as gasoline, water and electricity are all heavily subsidized, while the public sector is large and generously paid.
As the price of oil has fallen, the government has been forced to take emergency measures to reduce this spending. Last year, Saudi citizens saw the price of gasoline rise by 80 per cent as a result of the withdrawal of subsidies. Public employee pay has also been cut by up to 20 per cent, and bonuses and annual leave have been cut.
These cuts may still not be enough to balance the books. Last year, the Kingdom’s budget deficit amounted to $98 billion.
It is unclear how much of the backlash the new calendar and the cuts will provoke. According to Kechichian, religious conservatives have yet to register significant dissent, but resistance to the new policies is possible. However, he argues that the changes are inevitable: “At the end of the day, the religious folks can complain if they want to, but this is an economic decision, and the economic prerogatives are going to override them.”
NOW WATCH: Former Navy SEAL commanders explain why they still wake up at 4:30 a.m. — and why you should, too
Business Insider Emails & Alerts
Site highlights each day to your inbox.