Saudi Arabia unleashed a $160bn spending plan in 2011 as unrest swept through the region, including violent protests on the streets of Yemen, Bahrain, Oman and Kuwait. Large capital expenditure and welfare spending have since underpinned strong economic growth.
“Spending from reserves or borrowing is simply not sustainable,” said Farouk Soussa, chief Middle East economist at Citi.
The IMF is urging all Gulf states to rationalise massive subsidy programmes, which outpace per capita spending on health and education, and bolster economic diversification and job creation efforts.
But depriving pampered populations of this [welfare] support would come at a high political cost, given longstanding social compacts that trade loyalty for generous welfare.
Source: The Financial Times
However, young Saudis prefer working for the government:
Only a small number of Saudis are employed in the private sector. According to statistics for 2011 from the Saudi Ministry of Labor, released by the Saudi Arabian Monetary Agency, Saudi workers represented only 10.9% of the total number of workers in the private sector.
Companies have traditionally been reluctant to employ Saudis, who are paid more than foreigners and enjoy more job protection. In addition, many Saudis prefer to work in the public sector, since private employers offer comparatively lower salaries, unattractive benefits packages, and demand longer working hours.
Saudi Arabs are no great students, despite huge education expenditure:
The oil-rich countries of the Gulf are investing heavily in education to diversify their economies and build a workforce capable of competing in knowledge-intensive industries.
But a paper by the Organization for Economic Cooperation and Development (OECD) has some bad news for them. Students in resource-rich economies nearly always underperform compared with their peers in countries where people have to study and work hard for a living.
In fact, United Nations Educational, Scientific and Cultural Organization (UNESCO) says the Arab world is one of the biggest spenders on educational globally. It estimates that the region is spending 4.89% of GDP on schooling, ahead of any other region of the world except North America and Western Europe. (...) Among oil exporters at the bottom of the class are Iran with a PISA score of 397, Kuwait 358 and Qatar 368. Only the UAE, at 421, breaks the 400 barrier.
Source: The Jerusalem Post
This is the TIMMS international ranking of students in mathematics. The whole Arab and Muslim world seems to be at odds with mathematics:
The Trends in International Mathematics and Science Study (TIMSS) is an international assessment of the mathematics and science knowledge of fourth grade (Standard 4) and eight grade (Form two) students around the world. TIMSS was developed by the International Association for the Evaluation of Educational Achievement (IEA) to allow participating nations to compare students’ educational achievement across borders.