All you need to know about Saudi Arabia's Tawakkalna App

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.

Dubai, Apr 16: Most of the patients who have fully recovered from Covid-19 in the UAE followed healthy behaviours that helped strengthen their immune systems, said Dr Farida Al Hosani, Official Spokesperson for the UAE Health Sector.

Dr Al Hosani made the remarks during the UAE Government's regular briefing on the latest developments related to the spread of coronavirus in the country, which was held on Wednesday in Abu Dhabi.

During the briefing, Dr Al Hosani spoke about the precautionary measures that aimed to prevent the spread of the virus.

Ammar Al Muaini, Official Spokesperson of the National Programme for Happiness and Quality of Life, also explained the outcomes of the National Mental Health Programme.

During the briefing, Dr Al Hosani affirmed that recorded cases in the country, especially recoveries, were related to key factors and reasons.

"In most cases of recoveries, we noticed that they have followed several daily health behaviours, such as doing exercise, eating a healthy diet, strengthening the immune system, and maintaining an ideal weight, as well as abstaining from bad habits, such as smoking and unhealthy eating. The psychological aspect is also important, and it is necessary to support the mental health of individuals, along with their physical health," she said.

"These practices, which we always emphasise and promote, will help raise a person's immunity and resistance to diseases, in addition to medicines, and can speed up the process of recovering from disease," she added.

Dr Al Hosani also talked about the importance of not being complacent if one's temperature rises. "We highlight the importance of periodic temperature checks for family members at home. This step is one of the health measures that we are encouraging.

"Everyone who has a high temperature must contact the nearest health centre or hospital or go to a drive-through testing centre because personal health is linked to the health of those around us and we are responsible for it. There is no room for hesitation in protecting our families," she stressed.

Dr Al Hosani highlighted the importance of covering the nose and mouth, whether by wearing surgical, paper or cloth masks, or any other covering or clothing.

"This procedure is important for everyone leaving home to avoiding the transmission of any infection and preserving the safety of everyone, along with leaving a safe physical distance between people in public places, markets and workplaces, and following the precautions," she explained.

Regarding high temperatures and their relationship to the coronavirus, Dr. Al Hosani said: "All studies that attempt to understand the relationship between the virus and climate have not been able to confirm that higher temperatures will help kill the virus. We are continuing to monitor the results of these studies."

Al Muaini explained the details and developments of the national campaign, titled, 'Don't Worry,' which aims to support the mental health of community members.

"The UAE Government, represented by the National Programme for Happiness and Quality of Life, has launched, under the current circumstances, the national campaign, titled, 'Don't Worry,' that aims to provide psychological support to members of society facing the repercussions of the novel coronavirus, in line with relevant national efforts," Al Muaini said.

"The campaign reflects the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, affirming that quality of life is a high priority, and health is the most important pillar of quality of human and society," Al Muaini added.

Al Muaini stated that the phrase, 'Don't Worry,' is profound in its meaning, according to His Highness Sheikh Mohamed bin Zayed, and reassures everyone that everything will be fine. "Today, the concept of health is not limited to physical health, but it also includes mental health. During this period, and due to the social, professional, and educational changes that directly affect our lives, we need to support and enhance our mental health to overcome these challenges," he  added.

Al Muaini said that over 50 specialists, psychologists and social workers are voluntarily participating in the national campaign to serve the country, which includes three main components focusing on providing psychological support to all members of society, especially as this type of support is one of the necessary community needs during the current circumstances.

The first component, 'Let's Support Together,' aims to answer enquiries regarding psychological challenges, provide educational advice, and support individuals in facing challenges, through daily live broadcasts on the social media networks of the National Programme for Happiness and Quality of Life, @HappyUAE. Two events are broadcast every day, with the first being at 17:30 in English and the second at 20:30 in Arabic to benefit all segments of society.

Al Muaini explained that the number of live broadcasts on the programme's social media accounts has reached 30 and covers various topics, including psychological care for senior citizens, psychological care for children, psychological support for working mothers, and how to address anxiety and psychological concerns.

According to scientific studies, fear and anxiety are among the strongest influences that weaken human immunity, and, therefore, it is necessary to learn about how to deal with them. The duration of each broadcast is one hour, attracting some 250,000 views each.

Al Muaini explained that the second component of the campaign is the hosting of closed virtual sessions, entitled, 'Let's Talk Together,' which aim to provide psychosocial support to specific groups of society, to enable them to talk to each other in a safe environment to discuss the psychological challenges they are facing.

The programme has organised over eight closed psychological support sessions to maintain the privacy of participants, under the supervision of certified physicians and psychologists. Some 300 people have participated and some sessions were held for those under quarantine, including working mothers, school and university students, and doctors working in the first line of defence.

Some 300,000 people watched "Let's Reassure Each Other" programme Al Muaini noted that the third component of the campaign, titled, "Let's Reassure Each Other," focuses on raising awareness of the importance of psychological resilience and promoting its importance to society. The programme has so far posted more than 21 video clips containing messages of support and reassurance to the community.

The number of people who watched the programme reached some 300,000 viewers.

Al Muaini stressed that the campaign is an effective interactive platform available on a daily basis, to provide psychological support to all segments of society at a time when people require reassurance and psychological support to overcome the current crisis. The campaign hosted doctors working in the first line of defence and their enquiries were answered directly. A group of people under quarantine was also involved in the closed support sessions, which were also popular with participating doctors.