By Zero Hedge
Members of Saudi Arabia’s royal family have apparently learned nothing from their cousin’s authoritarian tendencies. To wit, Saudi authorities on Saturday detained 11 princes after they gathered at a royal palace in Riyadh to protest austerity measures imposed by their cousin and the state’s de facto leader: Crown Prince Mohammad bin Salman, aka MbS.
As part of the latest wave of cutbacks forced by still-low oil prices, bin Salman suspended payment of royals’ utility bills. The decision triggered a backlash among the royals who weren’t prosecuted during the Crown Prince’s “corruption crackdown”/cash grab from late last year, and they swiftly assembled at the Qasr a-Hokm, a historic royal palace, to demand the cancellation of a royal decree that stopped state payment of water and electricity bills for royal family members. The move was a rare act of defiance against the Saudi crown, per Reuters. They were also demanding compensation for a death sentence issued against a relative, local media reported.
In light of recent “events” in Saudi Arabia, it was a rather poor decision.
The identities of the princes taken into custody have not been released. However, the leader of the group has been identified by the initials S.A.S.”Everybody is equal before the law and anyone who does not implement regulations and instructions will be held accountable, no matter who he is,” a local media website added.
Late last year, MbS imprisoned dozens of royals at the Riyadh Ritz Carlton until they agreed to fork over substantial chunks of their wealth in exchange for their freedom. The shakedown resulted in one former general being tortured to death after refusing to give in to MbS’s remunerative demands – the princes spoke up, and were promptly taken into custody.
“They were informed of the error of their demands, but they refused to leave Qasr al-Hokm,” an unnamed local official told local media. “A royal order was issued to the royal guards … to intervene and they were detained and put into al-Hayer prison in preparation to put them on trial.”
Saudi Arabia, the world’s largest oil exporter, has introduced reforms that included cutting subsidies, introducing value added tax (VAT) and cutting perks to royal family members to try to cope with a drop in crude prices that has led to a massive budget deficit.
OPEC’s biggest oil producer said its gross domestic product shrank 0.5% in 2017 due to a drop in crude production, as part of the 2016 Vienna production-cut agreement, but mostly due to lower oil prices.
The last time the Saudi economy contracted was in 2009, when GDP fell 2.1% after the global financial crisis sent oil prices crashing. Riyadh also posted a higher-than-expected budget deficit in 2017 and forecast another shortfall next year for the fifth year in a row due to the decline in oil revenues. The finance ministry said it estimates a budget deficit of $52 billion for 2018.
Some more details from the recently released budget courtesy:
- Revenues in 2018 were estimated to be 783 billion riyals ($208.8 billion), up 13% on the previous year’s projections.
- Actual revenues for the current fiscal year rose by a healthy 34 percent compared with 2016 to $185.6 billion due a sharp increase in both oil and non-oil revenues.
- Actual non-oil revenues collected in 2017 reached 256 billion riyals ($68.3 billion), a 38 percent rise on the previous year, reflecting the impact of hiking prices and imposing fees.
- Total spending includes 83 billion riyals from the sovereign wealth fund and 50 billion riyals from national development funds, in addition to the 978 billion riyals allocated in the 2018 budget
- Capital spending will increase by more than 13 percent
- The economy is expected to grow 2.7 percent next year after contracting 0.5 percent in 2017
- Inflation is expected to reach 5.7 percent from a negative rate at the end of 2017
- The government expects to spend 32 billion riyals in 2018 on a cash-transfer program designed to protect middle- and lower-income Saudi families from the planned increase in fuel and electricity prices
- Non-oil revenue in 2018 is expected to rise to 291 billion riyals versus 256 billion riyals this year
- Achieving the fiscal balance goal was delayed to 2023 from an initial target of 2019
Even after seizing hundreds of billions of dollars from the royal family, MbS will need the estimated $1 trillion or more that the Kingdom stands to raise during an offering of Saudi Aramco’s shares, which is expected later this year – though the kingdom still needs to choose a venue for the offering.
This article (Eleven Saudi Royals Arrested For Protesting Against Austerity) was originally published on Zero Hedge and syndicated by The Event Chronicle.