Riyadh, 19 January 2017
Saudi Arabia has been a member of the United Nations Human Rights Council since 2014 and was recently re-elected to serve until 2019. One of the Council’s key activities is the Special Procedures system under which Special Rapporteurs, who are independent experts appointed by the Council, visit States and offer recommendations to enable them to better comply with their international human rights obligations. I greatly appreciate the invitation from the Government of Saudi Arabia to visit in my capacity as Special Rapporteur on extreme poverty and human rights. It is significant that this is only the third time that a Special Rapporteur has visited the country in the past thirty years, and the last visit came more than eight years ago.
The timing of my visit to Saudi Arabia is particularly important in light of the large-scale economic, social and cultural transformation that is currently underway in the Kingdom. Vision 2030, the National Transformation Program 2020, and the Fiscal Balance Program, all reflect an ambitious and deeply transformative agenda, driven by a combination of economic necessity, social evolution, and bold political leadership. The implications for human rights are many and varied, and poverty elimination and social protection are an important part of the new strategy.
The transformative agenda provides a context in which to reassess human rights policy, both on the part of the Government and of its external critics. The latter have long drawn attention to issues such as the arbitrary arrest and imprisonment of peaceful protesters, the use of the death penalty, discrimination against religious minorities, and discrimination against women. While recent reports indicate all too little progress on most of those matters1, there are other important human rights issues that also warrant attention, especially in the context of the present statement. In relation to some of these issues, Saudi society is evolving in a positive direction.
The place of human rights discourse in Saudi Arabia remains somewhat ambivalent. Government officials point to the ratification of several core international human rights treaties, its membership of the UN Human Rights Council, its preparation of a National Human Rights Action Plan, a sizeable Human Rights Department in the Ministry of Islamic Affairs, and various other initiatives. But some authorities also tend to view human rights as an alien concept and one that is not easily reconciled with the Kingdom’s Islamic character or the dominant role of the ruling family. They are also not slow to invoke sovereignty and cultural traditions as limits on engagement with human rights. But the reality is actually more interesting than either of these positions. As in almost every country today, societal change is driven by both external and internal factors, and Saudi Arabia is now an integral and deeply connected part of the global system. One-third of its inhabitants are foreigners, its businesses are increasingly globalized, a high proportion of its educated elite have spent extended periods studying overseas, its citizens are avid consumers of the latest information and communications technologies, and international standards in many fields have become an integral part of the framework for public policy-making. Human rights is no longer an outlier in this regard.
Commentators sing the praises of Vision 2030 for a variety of reasons, including its deep privatization agenda, its goal of motivating and incentivizing Saudi citizens to be more productive, its aim to reduce dependency upon the State, its aim to ‘Saudize’ the job market and greatly reduce the need for foreign labour, its emphasis on efficiency, and its concern for fairness. While the anti-poverty and social protection agendas are only one part of this overall equation, they cannot be analyzed in isolation. The Vision is a truly transformative one and its successful implementation will require changes throughout the society, in its economic, social, cultural, and legal dimensions.
A. Poverty in the Kingdom
This analysis focuses on poverty defined in multidimensional and relative terms. This is consistent with the approach adopted by the vast majority of international agencies. In a country with Saudi Arabia’s characteristics, it would be largely meaningless to adopt an absolute line or to attach great significance to the World Bank’s universal extreme poverty line of $1.90 per person per day.
Many Saudis are convinced that their country is free of poverty. I was often told that there are no homeless and no hungry people, and that the innate spirit of generosity within the society ensures that there is no poverty. And until very recently, the word ‘poverty’ was carefully avoided by policy-makers and commentators. They talked instead about vulnerable or needy persons. Things should have started to change after a ground-breaking visit in 2002 to poor areas in Riyadh by the then Crown Prince Abdullah. That led to the preparation of a National Poverty Reduction Strategy in 2005, but it has never been made public. In 2006 a Supplementary Support Programme was initiated to assist the poor. Since that time, Government programs have proliferated and charitable organizations working in the poverty sector have flourished.
But the result is a veritable hodgepodge of programs which is inefficient, unsustainable, poorly coordinated and, above all, unsuccessful in providing comprehensive social protection to those most in need2. The system is based on monthly and one-time cash transfers under the Complementary Support Program. According to the Ministry of Labor and Social Development, over 877,000 Saudi households (some 2,400,000 individuals) receive such payments. Orphans, the disabled, the elderly, unsupported women, and unsupported families are eligible for a maximum monthly amount of 5,000 SR (for a family of 15 individuals) and a maximum one-time payment of 30,000 SR. In addition, other benefits are provided for: housing loans; unemployment; home furnishing and renovation; school bags and uniforms for students; electricity bills; people with disabilities; terminally ill patients; higher education support; and emergency assistance in natural disasters. Moreover, there is a Productive Family program, a range of loans from the Social Development Bank, and grants from the National Charitable Fund. It is little wonder that with such a plethora of potential benefits, most Saudis assume that no citizen could be left wanting. And the activities of a great many charities come on top of all of this.
The Ministry of Economy and Planning described the resulting challenges to me in the following terms:
- Lack of a true understanding of the nature of poverty in the Kingdom;
- Weak targeting, overlaps and leakage in beneficiary coverage;
- Little account for geographic specificity and cultural variation;
- Social protection programs are not designed for graduation;
- Lack of a common vision across institutions;
- Weak coordination and fragmentation within and across delivery institutions;
- Institutional complexity and conflicting mandates;
- Little to no involvement from the private sector;
- Absence of arms-length monitoring and evaluation mechanisms across social protection programs;
- Absence of financial and social impact assessment of programs;3
This is a severe self-indictment, and Vision 2030 and the accompanying reforms are aimed at remedying the problems. Subsidies, especially on fuel, electricity, and water will be drastically reduced and eventually eliminated. Government spending on pretax energy subsidies amounted to more than 10% of GDP4, water consumption is among the highest in the world, and such subsidies benefit the rich far more than the poor as well as distorting economic incentives.
In December 2016, a Household Allowance program was announced. It will provide cash transfers to compensate lower and middle income households for the direct (rising consumer prices for energy and water) and indirect (rising retail prices, including for food) negative impact on living costs of the subsidy reforms5. Households, rather than individuals, are the beneficiaries of the allowance. The beneficiaries should, with a few exceptions, be Saudi citizens residing in the country6. All beneficiaries of existing cash transfer system are supposed to be automatically enrolled and others will be urged to enroll starting in February 2017. By 2020, subsidy reform is expected to save 209 billion SR per year, while the Household Allowance will cost only 60-70 billion SR, a saving of as much as two-thirds.
This will be part of an overall Citizen Account system, constructed on the basis of greatly expanded data gathering capacities and the building of comprehensive databases designed to fill major existing knowledge gaps and bring together information currently held in widely dispersed places. Many government functions and services will be privatized, and this will facilitate a stronger role for the private sector and for non-profit organizations.
Overall, the elimination of wasteful subsidies and the targeting of the poor and those most in need are praiseworthy objectives. Nevertheless, without entering into the complexities and unknowns of the proposed reforms, there are various considerations which the Government might wish to take into account.
(i) Consideration should be given to acknowledging that social protection is a human right in Saudi Arabia. This would build on the Qur’anic injunction in relation to the obligations of the ruler and the rights of the poor and needy under Zakat. It would also signal a firm commitment on the part of the Government that the dramatic market liberalization program contained in Vision 2030 is consistent with an enduring commitment to respect the right to social protection. This approach would be an appropriate update to the provision in Article 27 of the 1992 Basic Law of Governance by which the state guarantees the rights of the citizen and his family in cases of emergency, illness and disability, and in old age.
(ii) Consideration should be given to extending the timetable for the introduction of the reforms. They are too important to fail, but the existing timetable seems unrealistically ambitious. Experience from other countries shows that subsidy reforms and the introduction of cash transfer programs have a major impact on society and can trigger strong backlash. The 2016 experience in relation to water subsidies, and inflationary pressures in 20167, suggest that caution should temper ambition. In theMiddle East and North Africa region, the IMF has noted that successful subsidy reform requires “[t]horough preparation, including clear diagnostics and careful planning of the pace and breadth of reform” are crucial factors for successful reform8.
(iii) The plans announced to date are important in eliminating subsidies, cushioning the political and economic impact of that and other reforms, and setting the scene for the privatization and marketization of services. But they do not yet add up to a coherent or comprehensive plan to achieve social protection for all those in need. They could not do so, since there has not yet been any systematic mapping of poverty or any detailed analysis of its characteristics. While many of the existing entitlements need to be reformed, they should not be simply replaced in the longer term by a single Citizen’s Account. The proposed benefit levels are low and insufficient to lift recipients out of poverty;
(iv) Existing cash transfers do not target the poorest in any systematic sense, but rather focus on specific categories such as orphans and female-headed households which to a significant extent reflect a traditional welfare rather than an empowerment approach and results in significant social spending on the non-poor.
(v) The inspiration for the Vision 2030 approach to social protection is clearly derived from the approach long championed by the World Bank. While this has much to recommend it, the Social Protection Floor initiative supported by the UN, the International Labour Organization, and the World Health Organization is more comprehensive, less focused on exclusionary concerns, and more rooted in human rights. The Government would benefit greatly by inviting the ILO to make some observations on its existing plans.
(vi) Decisions to deny eligibility should ultimately be able to be appealed to a well-designed judicial or quasi-judicial complaint mechanism, rather than being left to the Ministry to judge itself or relying on social media mobilization.
Issues of taxation and inequality also need to be considered in the context of such wide-ranging economic and social reform. While inequality levels have dropped since 2007, in large because of redistributive policies adopted in the wake of the ‘Arab spring,’ they remain inordinately high. For the country as a whole the Gini coefficient was 0.46, but in Riyadh the rate is 0.54. In the United States, which has very high levels of inequality, the 2016 rate was 0.39. Redistributive policies designed to diminish inequality and thus enhance efficiency and fairness should focus especially on educational opportunities. But fiscal policy is also a crucial dimension.
Vision 2030 does not lay out any overall reform of the Saudi tax system, but the imposition of a Value Added tax (VAT) is planned, and my interlocutors described ‘trial balloons’ that have been floated in relation to the possibility of a personal income tax at least on expatriates. Since the VAT is clearly regressive, it is important not just to ensure appropriate exemptions for the items of most importance to the poor, but also to complement that initiative with a broader focus on building fairness into the taxation system.
In that respect,
zakat policy is also important. One possible revenue stream that should be further explored is the collection of the personal
zakat tax of 2.5% by the Government. The relevant 1951 Royal Decree allows for the levying of personal
zakat on companies, but the General Authority for Zakat and Income Tax currently only collects
zakat from companies. It will soon create an account for the payment of voluntary personal
zakat to the General Authority, but if this were to be made obligatory it would increase the revenue stream for social assistance. There is widespread avoidance of corporate zakat taxes and the Authority’s plans to ensure more effective collection is an important step in reassuring the public that tax-paying and social protection are directly linked.
B. Means by which to eliminate poverty while promoting respect for human rights
There are four major areas in which the Government needs to undertake sustained reform if it is to meet its Vision 2030 goals, while eliminating poverty, ensuring social protection, and promoting respect for human rights.
1. Evidence-based decision-making
One of the most striking characteristics of Saudi policy-making in the past has been the lack of reliable, and often any, statistics. Virtually every observer with whom I spoke outside of Government, and even many within, acknowledged that the present system is deeply flawed by the absence of the reliable and systematic evidence required as a foundation for rational and informed decision-making. In some instances, it appears that decisions have been taken not to collect data that might be problematic, controversial or harmful to national unity. In others, the information is clearly available but is kept strictly confidential. In yet others, information is available but is not shared with other agencies or the public, or is provided only in a form that severely limits its utility (deciles as opposed to percentiles, not disaggregated by gender or other vital criteria, etc.).
The clearest example from my own experience was my attempt to ascertain what criteria the Government uses to determine who is poor or who is “needy”, and the number of persons estimated to be in the relevant categories. When I asked the Labour and Social Protection Ministry, they told me to ask the General Authority for Statistics. At my first meeting with the Authority I was informed that they could give me no relevant information whatsoever because it all belonged to the Ministry. When I asked the Minister personally, he phoned the President of the Authority who agreed to meet me. At that meeting I repeated the request and was told that it would be considered. No information as to the relevant numbers and no details of the standards used were ever provided to me, despite their absolute centrality to my mission.
There is, of course, nothing new in this observation. Economists and political scientists writing about the Kingdom consistently complain about the lack of information and even the IMF has been very critical9.0 It is not surprising therefore that those responsible for implementing Vision 2030 have expressed a clear determination to assemble comprehensive statistical and other databases to facilitate evidence-based policy-making. It seems unlikely that the path from secrecy and non-transparency to openness will be as smooth as many hope, but given the aspirations that have been expressed to me it will also be important to ensure that appropriate privacy protections are built into the systems. It is not clear to me that any serious consideration has yet been given to that dimension, which many assured me was even more important in an Islamic society.
As recommended in a recent policy analysis by the King Khalid Foundation, there needs to be a study of alternative options for calculating a relative poverty line for the Kingdom, and the setting of a ‘sufficiency line’ defining minimum reasonable living standards. Both exercises should involve widespread public consultation and not be closed technocratic exercises.
Once such benchmarks have been adopted, the Government should commit to publishing appropriate statistics and regularly monitoring change.
2. Public participation
Optimal and carefully tailored design, along with public acceptance of the major reforms resulting from the implementation of Vision 2030 will be indispensable. The Government clearly acknowledges this, albeit within limits, as indicated by the unprecedented public relations campaign it has undertaken, and its limited experiments in consulting with some stakeholders in the process. But the IMF, an organization which is concerned with economic viability rather than respect for human rights, has noted that the crucial challenge in such a context lies in “involving key stakeholders such as political parties, civil society, and the private sector, and communicating clearly and effectively to publicize the costs of subsidy systems, who benefits from them, and the benefits of the reform.”10
This is not easy to achieve in a country in which there are no political parties, no national elections, and significant free speech restrictions, especially in relation to criticism of government policies. My interlocutors either sought to justify the limitations imposed on the grounds of national security concerns and the need to avoid the chaos engulfing some neighbouring countries, or to point out that important initiatives have been taken in recent years to promote and facilitate broader consultation. They pointed to the role of the Shoura Council, the municipal elections, and various other consultative bodies. But the most dramatic development is the extent of public debate conducted through social media. One third of the Saudi population are active social media users, with Whatsapp being used by 27%, Facebook by 25%, and Twitter by 20%11. Because of its characteristics, the latter seems to be the most significant in terms of political commentary and campaigns. Although it does not remove the need for more formal opportunities for freely expressing views and debating policies, it has proved to be a potent tool in many respects and is a constant reminder to the Government of the importance of public engagement, especially in relation to social and economic policies.
3. Coordination and evaluation of social protection
A major challenge in Saudi Arabia concerns coordination of social protection policy, not just among government departments, but also vis-à-vis a very extensive network of charities that channel large amounts of money and carry important operational responsibilities. In terms of government policy, the King Khalid Foundation has called for the creation of a ministerial committee to design and implement improved policies. Some such coordination mechanism is clearly needed.
In terms of charitable organizations, the Ministry of Labor and Social Development provided them with 500 million SR in 2016, and other government agencies provided significant additional funding. These charities clearly play an important cultural role in the Kingdom, but they are not independent from the government, and registration requirements are widely considered to block their potential for showing initiative. Government funding increasingly targets specific priorities, but there is little meaningful oversight and monitoring of the effectiveness of charity spending. A number of individuals were critical of many charities for being ‘amiable amateurs,’ providing ‘charitable’ services without focusing on structural means to help their beneficiaries out of poverty. The culture of charities is only gradually beginning to change from service delivery to development.
The coverage that charities achieve is not comprehensive, systematic, or nationally evenly distributed. Many dealing with women seem more concerned to teach them sewing, embroidery, cooking and other traditional jobs than giving them skills that are in serious demand in the labour force.
Consideration should be given to establishing a Charities Commission which could encourage greater autonomy, promote better coordination, and stimulate reflection on the new policies required in the new world of Vision 2030.
4. Inclusive policies towards women and families
Vision 2030 calls Saudi women ‘a great asset’ and acknowledges the role of the Government in assisting them to develop their talents and investing in their capabilities12. Women are more represented in universities than males and often outperform them in different spheres. The fact that they still make up a tiny percentage of the labour market, and are effectively prevented from performing a great many occupations, significantly constrains Saudi Arabia’s economic potential and social development. The World Economic Forum’s Global Gender Gap Index, 2015, ranks
Saudi Arabia 134 out of 145 countries13. If it is to succeed fully, Vision 2030 should also be seen as a transformational opportunity to enhance gender equality, especially of women and girls in the lower income quintiles. Recent Saudi history teaches us that the lifting of traditional cultural restrictions on women greatly enhances the prospects of economic and societal progress. The 2012 decision to allow women to work in the retail sector, such as supermarkets, transformed public spaces and enabled millions of women to enter the labour force.
Before noting the continuing restrictions which have a negative impact on women’s abilities to work, travel, and engage fully as productive members of society outside of the household, it is very important to acknowledge that there have been a number of positive developments in this area and that a change in societal attitudes is taking place.
Major challenges persist, however. Some examples may be helpful.
First, while the law no longer requires the permission of male guardians before women can work14, many employers still insist on such authorization and the Government has not intervened. This puts women at the mercy of the employer’s own preferences and her guardian’s goodwill. Women from lower-income and less educated backgrounds face more challenges in convincing their guardian to allow them to work, especially in mixed gender workspaces.
Second, once employed, women from poorer backgrounds face additional obstacles. They may need someone to care for their children while they are at work. Hiring a migrant domestic worker is prohibitively expensive. Firms with more than 50 workers are required by law to provide daycare, but this law is widely flouted. Because women are banned from driving and public transport is generally lacking, poorer working women must rely on family and friends for transport or pay for it.
In the public sector female employment is gradually improving but it remains not only segregated but confined to a limited range of posts, even if prominent exceptions can be shown. There are no female judges or prosecutors and only 87 out of 963 diplomats are women. Women are, however, well represented in universities, and in the health and education sectors.
When women are abandoned by their husbands, they often face major problems. While they can file for divorce, court procedures can take years to conclude. Without a divorce agreement, social assistance is difficult to obtain and permission is still required from the husband to work and for other matters. While Sharia law obliges the husband to maintain his family, an abandoned woman will have to go to court to obtain her rights. This represents an impossible threshold for many poorer women.
Women still have very limited opportunities to use the formal political process to bring change. 20% of those appointed by the King to the Shoura Council are women, and 22 women were elected in municipal councils around the country in 2015 once they were permitted to nominate. Outside of these institutions, there is very little space for women to participate in public policy-making. There are no non-governmental organizations working on human rights, let alone women’s rights15, and only a very few charities even engage in advocacy work. The main space available for women to participate is on social media, especially Twitter. Campaigns such as #TogetherToEndMaleGuardianship16 and #StopEnslavingSaudiWomen17 have reached hundreds of thousands of followers in the Kingdom and beyond and have had an effect on the public debate. And privately developed apps such as “Know Your Rights”, assist in educating women about their human rights18.
Most officials suggest that the Government is not opposed to abolishing the ban on driving or eliminating many of the guardianship restrictions, but they quickly add that society remains opposed. But the Government cannot just remove itself from these debates. They have obligations to respect the women’s rights, they should push back against any traditional and community practices that seek to deny basic rights to any group, and they should ensure that the debate is based on accurate surveys of opinions. I have seen several surveys indicating rather limited opposition to progressive change.
Education is the key to enabling women to participate in society as equal citizens. The Government should strictly enforce the law requiring all girls to attend primary school. There is still a higher percentage of girls than boys who do not complete primary school, but reliable data is scarce and is not disaggregated by sex19.
The Government should enforce the 2012 rule that women no longer need permission from their guardian to work. Employers who continue to request such permission should be prosecuted. A Government media campaign should clarify that permission from a male guardian to work is no longer legally required. This could easily be affirmed in a statement by the Minister of Labor and Social Development.
The Government should respect and protect the human right of all Saudis to freely express their opinion on social media regarding women’s rights. Calling online for equal rights is not a crime20 and debate on the issue should be stimulated rather than censored. Where individuals promoting women’s rights are threatened, the Government should act swiftly to protect the individuals involved and indicate that such threats are unacceptable.
C. Female migrant domestic workers
Migrant workers make up approximately one-third of the total population and perform many of the available private sector jobs. I focused specifically on female domestic workers, of whom there are over 3 million in Saudi Arabia21. These women face non-payment of salaries, excessive working hours, and verbal, mental, physical and sexual abuse. My final report to the Human Rights Council will contain considerably more detail, but here I will keep it brief.
One of the structural causes of the problems faced is the
Kafala visa sponsorship system, which ties domestic workers’ residency permits (iqama) to the employer (sponsor or ‘kafeel’) and gives the employer tremendous power over the worker. A second cause is that female domestic workers are hired through recruitment agencies, which charge hefty fees which many employers illegally seek to pass on to the worker by withholding her salary.
The Government has the responsibility to provide for a legal framework that guarantees the full respect for migrants’ human rights and ensures accountability for violations. In 2013, it adopted improved regulations but there is a lack of enforcement. While the Ministry of Labor and Social Development claim to undertake inspections and investigate alleged violations, there is little tangible evidence of results. While the Ministry now gives domestic workers a free sim-card upon arrival in Saudi Arabia, many employers confiscate the telephone.
Workers who flee from their employers often end up in embassy-run shelters. The Government has now opened its own shelters and wants those instead of the embassy shelters to be used. But workers will be much worse off as a result unless needed advisory, counselling and other services are offered, and this is unlikely.
Criminal prosecutions of employers are very rare, while female domestic workers often face criminal charges.
It is estimated that there are currently around 500,000 undocumented Indonesian domestic workers in the Kingdom, as a result of the cancellation of the agreement facilitating legal migration. An amnesty for those and similarly situated workers should be considered as part of any new bilateral agreement.
D. Additional recommendations
The Saudi Government should ratify the two International Human Rights Covenants. It should invite other Special Rapporteurs, such as those dealing with migrant workers and freedom of expression, and it should invite international NGOs to come to Saudi Arabia to see first-hand the situation and learn more about the efforts being made by the Government.
1. See, for example, Human Rights Watch,
World Report 2017, page 510, available from: https://www.hrw.org/world-report/2017
2. The best guide to the system is Talha Fadaak,
Female Poverty in Saudi Arabia (Lap Lampert, Saarbrücken, 2012)
3. These challenges are not uncommon for social assistance schemes in the MENA-region. See: ESCWA, ‘Integrated Social Policy: Towards a New Welfare Mix, Report V’ (2014).
4. IMF, ‘Subsidy Reform in the Middle East and North Africa: Recent Progress and Challenges Ahead’ (2014), p. 18.
5. Government of Saudi Arabia, ‘Fiscal Balance Program: Balanced Budget 2020’, p. 58, available from: http://vision2030.gov.sa/sites/default/files/attachments/BB2020_EN.pdf
6. Government of Saudi Arabia, ‘Fiscal Balance Program: Balanced Budget 2020’, p. 61, available from: http://vision2030.gov.sa/sites/default/files/attachments/BB2020_EN.pdf
7. “In the wake of an increase in petrol prices in January, alongside rises in electricity and water bills, year-on-year inflation rose to 4.1% in the first seven months of 2016, compared with 2.3% at end-2015.” Economist Intelligence Unit, ‘Country Report: Saudi Arabia’, Generated on November 16th 2016, p. 8.
8. IMF, ‘Subsidy Reform in the Middle East and North Africa: Recent Progress and Challenges Ahead’ (2014), p. xi.
9. IMF, ‘Staff Report for the 2016 Article IV Consultation’, 29 June 2016, para. 50.
10. IMF, ‘Subsidy Reform in the Middle East and North Africa: Recent Progress and Challenges Ahead’ (2014), p. xi.
12. Government of Saudi Arabia, Vision 2030, p. 37.
15. Neither the Human Rights Commission nor the National Society for Human Rights are truly independent of government, and neither takes a strong public stand in promoting rights for women.
19. Ministry of Economy and Planning and UNDP, ‘Kingdom of Saudi Arabia Millennium Development Goals 2013, page 41.
21. U.S. Department of State, 2015 Human Rights Report on Saudi Arabia, p. 51