Fatwa allows citizens to pledge allegiance via social websites

Riyadh, Jan 6: Saudi Arabia was not consulted by its ally Washington over a US drone strike that killed a top Iranian general, an official said Sunday, as the kingdom sought to defuse soaring regional tensions.

Saudi Arabia is vulnerable to possible Iranian reprisals after Tehran vowed "revenge" following the strike on Friday that killed powerful commander Qasem Soleimani in Baghdad.

"The kingdom of Saudi Arabia was not consulted regarding the US strike," a Saudi official told AFP, requesting anonymity.

"In light of the rapid developments, the kingdom stresses the importance of exercising restraint to guard against all acts that may lead to escalation, with severe consequences," the official added.

Saudi Arabia's foreign ministry made a similar call for restraint at the weekend and King Salman emphasised the need for measures to defuse tensions in a phone call on Saturday with Iraqi President Barham Saleh.

In a separate phone call with Iraq's Prime Minister Adel Abdel Mahdi, Saudi Crown Prince Mohammed bin Salman stressed "the need to make efforts to calm the situation and de-escalate tensions", the official Saudi Press Agency reported.

The crown prince has instructed Prince Khalid bin Salman, his younger brother and deputy defence minister, to travel to Washington and London in the next few days to urge restraint, the pan-Arab Asharq al-Awsat newspaper reported.

Prince Khalid will meet White House and US defence officials, the paper said, citing unnamed sources.

The killing of Soleimani, seen as the second most powerful man in Iran, is the most dramatic escalation yet in spiralling tensions between Washington and Tehran and has prompted fears of a major conflagration in the Middle East.

US President Donald Trump, who ordered the drone strike, has warned that Washington will hit Iran "very fast and very hard" if the Islamic republic attacks American personnel or assets.

The American embassy in Riyadh on Sunday warned its citizens living close to military bases and oil and gas installations in the kingdom of a "heightened risk of missile and drone attacks".

A string of attacks blamed on Iran has caused anxiety in recent months, as Riyadh and Washington deliberated over how to react.

In particular, devastating strikes against Saudi oil installations last September led Riyadh and Abu Dhabi to adopt a more conciliatory approach aimed at avoiding confrontation with Tehran.

Analysts warn that pro-Iran groups have the capacity to carry out attacks on US bases in Gulf states as well as against shipping in the Strait of Hormuz -- the strategic waterway that Tehran could close at will.

"Expect Iranian reprisals (directly or through partner groups in Iraq, Lebanon or elsewhere) to target US partners in the region including Saudi Arabia," said Thomas Juneau, an assistant professor at the University of Ottawa.

"Given the climate in the US, where support for Saudi in the media and Congress is at an all time low, it will be difficult for Trump to commit significant resources to come to its aid."

Yemen's pro-Iran Huthi rebels, locked in a five-year conflict with a Saudi-led military coalition, have also called for swift reprisals for Soleimani's killing.

"The aggression... will not go without a response," said Huthi political council member Mohammed Al-Bukhaiti.

"How the response is going to be, when and where will be determined by Iraq and Iran, and we will stand with them as a hub for the resistance."

It was unclear if the Huthi warning was directed in part at Saudi Arabia, which has stepped up efforts to end Yemen's conflict amid a lull in Huthi attacks on the kingdom.

Saudi Arabian military commanders recently met with counterparts from "friendly countries" to formulate a new strategy to tackle the Yemeni rebels, particularly those "opposing" a political solution, according to Asharq al-Awsat.

Riyadh has said it will host a separate meeting of foreign ministers of Arab and African coastal states on Monday.

Dubai, Jun 9: Dubai's Emirates airline has begun laying off employees to reduce cost and save cash as the carrier looks to rightsize its workforce.

"We at Emirates have been doing everything possible to retain the talented people that make up our workforce for as long as we can. However, given the significant impact that the pandemic has had on our business, we simply cannot sustain excess resources and have to rightsize our workforce in line with our reduced operations. After reviewing all scenarios and options, we deeply regret that we have to let some of our people go," the spokesperson said in the statement.

Citing sources, Reuters and Bloomberg earlier reported that a majority of those being made redundant are cabin crew workers as well as a minority of its engineers and pilots, including those flew the Airbus A380.

"This was a very difficult decision and not one that we took lightly. The company is doing everything possible to protect the workforce wherever we can. Where we are forced to take tough decisions we will treat people with fairness and respect. We will work with impacted employees to provide them with all possible support," said the statement.

The spokesperson, however, didn't disclose how many employees are being made redundant in this latest round of rightsizing the workforce.

Emirates on Sunday confirmed that it extended the period of reduced pay for its staff for another three months till September. It had previously reduced basic wages by 25 to 50 per cent for three months from April, with junior employees exempted.

The airline had employed around 60,000 people at the end of its 2019-20 financial year.

Saj Ahmad, chief analyst at StrategicAero Research, said the announced job cuts at Emirates will likely not be the last given the unprecedented damage that Covid-19 has had not just on air travel, but on the entire aviation industry as a whole.

"Emirates' massive international network means that job reductions were always a last resort option as the company staves off cash burn and expenses at a time when revenues are dried up. While Emirates SkyCargo is enjoying a resurgence in activities, the reality is that this income will never offset the lost money from passenger operations," he added.

"Whilst some salary reduction schemes have prevented bigger job cuts for now, the absence of a cure or medicinal suppressant of Covid-19 means that air travel is unlikely to even reach pre-9/11 levels within 3-5 years, let alone pre-Covid-19 levels in that same time period. For that reason, Emirates' reduction in headcount is necessary to stay competitive, agile and be ready for when air travel can resume with a degree of normalcy that we have been accustomed to for decades," said Ahmad.

May 11: Saudi Arabia will triple its value-added tax rate and suspend a cost of living allowance for state workers, it said on Monday, seeking to shield finances hit by low oil prices and a slump in demand for its lifeline export worsened by the new coronavirus.

Historic oil output cuts agreed by Riyadh and other major producers have given only limited support to prices after they sank on oversupply caused by a war for petroleum market share between the kingdom and its fellow oil titan Russia.

Saudi Arabia, the world's largest oil exporter, is also being hit hard by measures to fight the new coronavirus, which are likely to curb the pace and scale of economic reforms launched by Crown Prince Mohammed bin Salman.

"The cost of living allowance will be suspended as of June 1, and the value added tax will be increased to 15% from 5% as of July 1," Finance Minister Mohammed al-Jadaan said in a statement reported by the state news agency. "These measures are painful but necessary to maintain financial and economic stability over the medium to long term...and to overcome the unprecedented coronavirus crisis with the least damage possible."

The austerity measures come after the kingdom posted a $9 billion budget deficit in the first quarter.

The minister said non-oil revenues were affected by the suspension and decline in economic activity, while spending had risen due to unplanned strains on the healthcare sector and the initiatives taken to support the economy.

"All these challenges have cut state revenues, pressured public finances to a level that is hard to deal with going forward without affecting the overall economy in the medium to long term, which requires more spending cuts and measures to support non-oil revenues stability," he added.

The government has cancelled and put on hold some operating and capital expenditures for some government agencies, and cut allocations for some reform initiatives and projects worth a total 100 billion riyals ($26.6 billion), the statement said.

Central bank foreign reserves fell in March at their fastest rate in at least 20 years and to their lowest since 2011, while oil revenues in the first three months of the year fell 24% from a year earlier to $34 billion, pulling total revenues down 22%.

"The reforms are positive from a fiscal side as greater adjustment is essential. However, the tripling of VAT is unlikely to help that much in 2020 revenue wise with the expected fall in consumption," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

She said she kept unchanged her deficit forecast of 16.3% of GDP for this year, which already factors in a greater than previously announced spending cut.

About 1.5 million Saudis are employed in the government sector, according to official figures released in December.

In 2018, Saudi Arabia's King Salman ordered a monthly payment of 1,000 riyals ($267) to every state employee to compensate them for the rising living costs after the government hiked domestic gas prices and introduced value-added tax.

DIFFICULT TIMES

A committee has been formed to study all financial benefits paid to public sector employees and contractors, and will submit recommendations within 30 days, the statement said.

In late 2015, when oil prices fell from record highs, the kingdom slashed lavish bonuses, overtime payments and other benefits once considered routine perks in the public sector.

In a country without elections and with political legitimacy resting partly on distribution of oil revenue, the ability of citizens to adapt to such reforms is crucial for stability.

"Tripling the VAT will test the limits of the balance between revenues and consumption as the economy dives into a deep recession. The move will impact consumption and could also lower the expected revenues," said John Sfakianakis, a Gulf expert at the University of Cambridge.

"These are pro-austerity and pro-revenue moves rather than pro-growth ones," he said.

Hasnain Malik, head of equity strategy at Tellimer, said the VAT rise could bring about $24-$26.5 billion in additional non-oil fiscal revenue. The rise would hit consumer spending further but was a needed step towards fiscal sustainability, he said.