Saudi Arabia's riches conceal a growing problem of poverty (2024)

A few kilometres from the blinged-out shopping malls of Saudi Arabia's capital, Souad al-Shamir lives in a concrete house on a trash-strewn alley. She has no job, no money, five children under 14 and an unemployed husband who is laid up with chronic heart problems.

"We are at the bottom," she said, sobbing hard behind a black veil that left only her eyes visible. "My kids are crying and I can't provide for them."

Millions of Saudis struggle on the fringes of one of the world's most powerful economies, where jobs and welfare programmes have failed to keep pace with a population that has soared from 6 million in 1970 to 28 million today.

Under King Abdullah, the Saudi government has spent billions to help the growing numbers of poor, estimated to be as much as a quarter of the native Saudi population. But critics complain that those programmes are inadequate, and that some royals seem more concerned with the country's image than with helping the needy. In 2011, for example, three Saudi video bloggers were jailed for two weeks after they made an online film about poverty in Saudi Arabia.

"The state hides the poor very well," said Rosie Bsheer, a Saudi scholar who has written extensively on development and poverty. "The elite don't see the suffering of the poor. People are hungry."

The Saudi government discloses little official data about its poorest citizens. But press reports and private estimates suggest that between 2 million and 4 million of the country's native Saudis live on less than about $530 a month – about $17 a day – considered the poverty line in Saudi Arabia.

The kingdom has a two-tier economy made up of about 16 million Saudis, with most of the rest foreign workers. The poverty rate among Saudis continues to rise as youth unemployment skyrockets. More than two-thirds of Saudis are under 30, and nearly three-quarters of all unemployed Saudis are in their 20s, according to government statistics.

In just seven decades as a nation, Saudi Arabia has grown from an impoverished backwater of desert nomads to an economic powerhouse with an oil industry that brought in $300bn last year.

Forbes magazine estimates King Abdullah's personal fortune at $18bn, making him the world's third-richest royal, behind the rulers of Thailand and Brunei. He has spent government funds freely on high-profile projects, most recently a nearly $70bn plan to build four "economic cities", where government literature says "up to 5 million residents will live, work and play".

The king last year also announced plans to spend $37bn on housing, wage increases, unemployment benefits and other programmes, which was widely seen as an effort to placate middle-class Saudis and head off any Arab Spring-style discontent. Abdullah and many of the royals are also famous for their extensive charitable giving.

For many years, image-conscious Saudi officials denied the existence of poverty. It was a taboo subject avoided by state-run media until 2002, when Abdullah, then the crown prince, visited a Riyadh slum. News coverage was the first time many Saudis saw poverty in their country.

Prince Sultan bin Salman, a son of Crown Prince Salman, said in an interview that the government has acknowledged the existence of poverty and is working to "meet its obligations to its own people".

Prince Sultan said the Saudi government was "three to five years" away from dramatically reducing poverty through economic development, micro-lending, job training and creation of new jobs for the poor.

The Saudi government spends several billion dollars each year to provide free education and health care to all citizens, as well as a variety of social welfare programmes – even free burials. The government also provides pensions, monthly benefits and payments for food and utility bills to the poor, elderly, disabled, orphans and workers who are injured on the job.

Much of the welfare spending comes from the Islamic system of zakat, a religious requirement that individuals and corporations donate to charity 2.5% of their wealth; the money is paid to the government and distributed to the needy.

"Living in Saudi Arabia is like living in a charitable foundation; it is part and parcel of the way we're made up," Prince Sultan said. "If you are not charitable, you are not a Muslim."

Despite those efforts, poverty and anger over corruption continue to grow. Vast sums of money end up in the pockets of the royal family through a web of nepotism, corruption and cozy government contracts, according to Saudi and US analysts.Bsheer said some Saudi royals enrich themselves through corrupt schemes, such as confiscating land from often-poor private owners, then selling it to the government at exorbitant prices.

At the other end of the spectrum, many of the poorest Saudis are in families headed by women such as Shamir, who are either widowed, divorced or have a husband who cannot work. Under Islamic law, men are required to financially support women and their children. So women who find themselves without a man's income struggle, especially because the kingdom's strict religious and cultural constraints make it hard for women to find jobs.

The situation for many families, including Shamir's, is worse because they are "stateless" and not officially recognised as Saudi citizens, even though they were born in the country.

The UN estimates that there are 70,000 stateless people in Saudi Arabia, most of them descended from nomadic tribes whose traditional territory included parts of several countries. Their legal limbo makes it harder for them to receive government benefits.

Shamir, 35, lives in the shadow of a huge cement factory. The houses and streets are covered in a haze of smoke and dust. Her concrete house is down a narrow alley, where graffiti covers the cracked walls and litter piles up in the street. Her landlord is threatening to kick her out, and a local shop owner has cut off her credit for food and gas for her stove. She lives mainly on charity from wealthy Saudis who show up with food and clothes.

One recent morning, her children ran to the door to help unload food being dropped off by a middle-class Riyadh couple in an SUV. Shamir said donations help her pay for the electricity to run an air conditioner, but she does not have enough to buy school supplies for her children.

While middle-class Saudi youths have all the latest gadgets, Shamir's 14-year-old daughter, Norah, has never sent an email or seen Facebook. Her husband has a second wife who has another 10 children. Most of them are unemployed.

Shamir said her husband earned about $500 a month as a security guard until his health forced him to quit five years ago. She said she has tried in vain to find work as a seamstress or a cleaner.

"I've been patient all these years," Shamir said. "I hope that God will reward me with a better life for my children."

Saudi Arabia's riches conceal a growing problem of poverty (2024)

FAQs

Saudi Arabia's riches conceal a growing problem of poverty? ›

Saudi Arabia's riches conceal a growing problem of poverty indicates that a quarter of Saudi Arabia lives in poverty, with between 2–4 million living on around 17 dollars a day, but the problem isn't publicized.

Is poverty a problem in Saudi Arabia? ›

Oman and Saudi Arabia have the highest poverty rates for nationals, with 10.1 and 13.6 per cent, respectively. Bahrain ranks third with a poverty rate of 7.5 per cent. One in every seven nationals in Saudi Arabia, one in ten nationals in Oman and one in thirteen nationals in Bahrain are living in poverty.

Is Saudi Arabia a rich or poor country? ›

Saudi Arabia had a total wealth of $2.26 trillion in 2022. Since 2012, Saudi Arabia's total wealth has increased by 80.80%. Ranked 25th on our list, Saudi Arabia is one of the wealthiest countries by per capita net worth.

Does Saudi Arabia have wealth inequality? ›

The Saudi family is the richest in the world, worth an estimated total of $1.4 trillion, predominately due to its assets in petroleum. However, Saudi Arabia is still relatively poor; with 20 percent of people living in poverty, the problem of income inequality in Saudi Arabia is quite evident.

Why does Saudi Arabia have so much wealth? ›

The Saudi economy is highly reliant on its petroleum sector. Oil accounts on average in recent years for approximately 40% of Saudi GDP and 75% of fiscal revenue, with substantial fluctuations depending on oil prices each year.

Why is the poverty rate so high in Saudi Arabia? ›

The results indicate that education and unemployment are crucial determinants of poverty outcomes. In addition, large family sizes combined with the tradition of having a single breadwinner also pushes households into poverty. Female-headed households are particularly vulnerable.

What is the poorest country in the world? ›

By continent or region
  • Somalia.
  • South Sudan.
  • Sudan.
  • Tanzania.
  • The Gambia.
  • Togo.
  • Uganda.
  • Zambia.

Is Saudi richer than USA? ›

The Saudi GDP in 2021 was roughly 0.84 trillion dollars. The US GDP in the same year was 23.32 trillion. The Saudis also have a smaller GDP per capita than the US.

Is Saudi Arabia full of rich people? ›

only few of Saudis are rich. Rich people percentage among Saudi population is almost the same as other countries if we compare it with UK, US, France, etc.. However, there are some advantages in Saudi Arabia over other countries, there are no taxes and many good free universities to join.

What is considered poor in Saudi Arabia? ›

People are hungry." The Saudi government discloses little official data about its poorest citizens. But press reports and private estimates suggest that between 2 million and 4 million of the country's native Saudis live on less than about $530 a month – about $17 a day – considered the poverty line in Saudi Arabia.

What is the average income in Saudi Arabia? ›

While often perceived as the most wealthy nation in the Middle East, Saudi Arabia is actually fourth in terms of per capita wealth, behind Qatar, Kuwait, and the United Arab Emirates. In Qatar, the average per capita income is $129,700 a year; in Saudi Arabia, it is $54,100.

Who owns the wealth in Saudi Arabia? ›

The wealth fund is controlled by Crown Prince Mohammed bin Salman, Saudi Arabia's de facto ruler since 2015. More than 60% of the fund's activities are within Saudi Arabia.

What percentage of people are rich in Saudi Arabia? ›

This statistic illustrates the distribution of adult population in Saudi Arabia in 2019 by wealth range group. That year, approximately 47.8 percent of adults in Saudi Arabia had wealth of 10,000 to 100,000 U.S. dollars.

What is the world's richest country? ›

Using the first metric, Switzerland is the richest country in the world at an average per-capita wealth of around $685,000, followed by Luxembourg and the United States.

What is the most profitable business in Saudi Arabia? ›

1. Food and Beverage Business in Saudi Arabia. Saudi Arabia's food and beverage sector is one of the best business opportunities in the kingdom, with the market size expected to increase from USD 23.48 billion in 2014 to USD 27.38 billion by 2029 with a 3.44% CAGR.

What does Saudi Arabia value the most? ›

Culture and values of people in Saudi Arabia

Respect, hospitality, and honor are extremely important in Saudi Arabia. So, if you are invited into someone's home you will be treated like royalty – and will likely eat your weight in meat and rice. Gifts are common – so bring something as a token.

What are the problems with living in Saudi Arabia? ›

Saudi Arabia polarizes expat opinion like few other places. While some enjoy living in traditional expat compounds, others struggle to deal with aspects such as gender segregation, human rights issues, and the country's intolerance to alcohol.

What problem does Saudi Arabia face? ›

Saudi Arabia is grappling with the formidable task of reinventing its economy, steering away from the dependence on oil that has long defined its financial landscape. Vision 2030, unveiled five years ago by Crown Prince Muhammad Bin Salman, outlines an ambitious plan to diversify and transform the economy.

Is Saudi Arabia financially stable? ›

Fitch Affirms Saudi Arabia at 'A+'; Outlook Stable. Fitch Ratings - Hong Kong - 05 Feb 2024: Fitch Ratings has affirmed Saudi Arabia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'A+' with a Stable Outlook.

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