Young Arabs Wedded to State Largess Pose Test for Gulf Leaders

  • Survey of 3,500 Arab youth finds wide support for subsidies
  • 86 percent of Saudis surveyed want discounts to continue

Young Arabs oppose paying more for gasoline and electricity even as they recognize the damage inflicted on Middle Eastern economies by the oil slump, posing a challenge for governments that need to rein in spending without stirring protest.

The ASDA’A Burson-Marsteller survey of 3,500 young people in 16 Arab countries found that 78 percent think electricity and fuel should be subsidized by their government. More than 90 percent of those questioned in the Gulf states of Qatar, Oman and Bahrain want subsidies to continue, while 86 percent agreed in Saudi Arabia, the world’s largest oil exporter.

The finding may be troubling news for governments planning to remove subsidies to shore up public finances as oil’s descent below $50 a barrel cuts deeply into revenue. Saudi Arabia, which recorded a budget deficit of nearly $100 billion last year, has already started to gradually lift prices for water, electricity and gasoline, long subsidized to some of the lowest levels in the world. The United Arab Emirates, Oman and Bahrain have also moved to reduce energy subsidies.

Underscoring the prominent role of such cuts in repairing the kingdom’s finances, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said in an interview with Bloomberg that the “restructuring of subsidies” is expected to generate $30 billion a year by 2020.

Many Arab rulers had avoided radical measures to cut subsidies for fears of triggering a backlash. Youth unemployment in the Middle East and North Africa is among the highest in the world.

The ASDA’A Burson-Marsteller poll, conducted by consulting firm Penn Schoen Berland, interviewed 18- to 24-year-old Arab nationals in January and February, when subsidy reductions began to take effect in many countries.

Two-thirds of respondents said they were “concerned about falling energy prices,” but the vast majority believed their governments should continue to provide subsidies. If governments did remove them, nearly half thought the higher prices should apply only to expatriates. In Bahrain, 93 percent wanted subsidies to stay, while 92 percent agreed in Qatar and Oman.

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