Saudi Arabia will cut salaries and allowances of government ministers and members of the appointed consultative body, the Shura Council, as part of the Kingdom’s efforts to reign in government spending. King Salman bin Abdulaziz issued royal decrees outlining the cuts on Monday, following the Shura Council’s weekly session on Sunday. Ministers’ salaries were cut by 20%, while Shura Council members took a 15% cut, effective 02 October, the first day of the Islamic year. Annual housing and car transportation allowances for the Shura members during their four-year term were cut by 15% each. A freeze was also ordered on car purchases for top state officials for a year. Ministers will also pay for their government-issued fixed and mobile phones. The King also reduced the annual leave of ministers to 36 days from 42 days, while overtime bonuses have been limited to between a quarter and half of basic salaries. The Saudi Cabinet has decided not to pay annual raises to state bureaucrats or contract employees for the next one year. It also cancelled transport and other allowances across the board for dozens of state jobs, including diplomats and for students studying abroad. Military personnel serving in the southern boundaries with Yemen were exempted from the allowances and salary cuts. Government agencies will have to amend their statutes to ensure full compliance with the new decree within 60 days.   Our comment: The news show further fiscal restraint by the government coming after various moves to cut spending and boost non-oil revenues. These fiscal measures, however, continue to weigh on economic activity, especially yesterday’s decision to freeze annual pay increases for all bureaucrats including contract employees in a further weighing factor on private consumption and general economic activity. This continues to pose the question of what is going to drive economic activity in Saudi Arabia in the coming year or two. (Argaam, Mohamed Abu Basha)