Saudi Arabia to raise wages for most military

* Cabinet approves wage hike, gives no details

* Move follows inflation spike, conflict with Yemeni rebels

By Souhail Karam

RIYADH, Aug 31 (BestGrowthStock) – Saudi Arabia will raise wages for
most of its army staff, a move that follows a surge in inflation
and the kingdom’s first military engagement in almost 20 years
against rebels in Yemen.

At about $41 billion, military expenditure accounted for
some 33 percent of the budget of the world’s top oil exporter
last year, according to the finance ministry’s website.

A weekly cabinet meeting chaired by King Abdullah approved
late on Monday a proposal to raise wages for all soldiers as
well as senior officers such as generals and lieutenants.

Defence Minister and also Crown Prince Sultan did not attend
the cabinet meeting.

The wage increase would be the second for the army since
2008 when Saudi Arabia offered state employees a 15 percent wage
hike spread out over a three-year period.

The cabinet did not say when the raise would take effect and
what was its percentage. The Defence Ministry’s spokesman
General Ibrahim al-Malek declined to comment.

The desert kingdom does not provide statistics on its
military forces. Diplomats estimate various corps of the Saudi
army to number a total of 175,000.

The rise in wages is likely to at least match the 5.1
percent inflation rate of 2009, said John Sfakianakis, chief
economist at Banque Saudi Fransi.

“Wage increases in general have not matched the rises in
inflation over the past few years and barely covered
inflationary rates of the past five years,” he said.

Saudi inflation climbed to a 17-month high of 6.0 percent
year-on-year in July, well above rates seen in other Gulf Arab
countries fuelled by rising food and housing costs.

Much of the army’s budget is spent on salaries but a surge
in oil receipts in recent years has raised the amount of funds
available for the military and catered for more purchases of
equipment and weapons.

The 2010 budget allocated 154.8 billion riyals ($41.28
billion) to national security and defence, unchanged from its
level a year earlier, but almost twice its level in 2004, when
the monarchy was fighting an al Qaeda campaign to topple it.

The Saudi army started in November a campaign against what
it said were intrusions into its territory by Yemeni Shi’ite
rebels who were accusing Riyadh of letting Yemeni troops use its
territory to attack them. At least 113 Saudi soldiers were
killed in the fighting which ended with a truce in January.
(Editing by Charles Dick)

Saudi Arabia to raise wages for most military