A construction worker in Saudi Arabia speaks on his mobile phone at a construction site in Riyadh.
The delays were a result of state spending cuts and a pinch on government finances caused by low oil prices. In many cases, delayed payments by the Saudi governments were felt most directly by foreign workers.
Saudi Arabia may be using money from its recent international bond sale to make good on its debts, according to some analysts. The finance blog Zero Hedge writes that the attractively-priced bonds, issued in three tranches and totaling roughly 1/3rd of its total state budget deficit next year, is likely being used to finance the outstanding debts to contractors.
“Saudi Arabia was already begun spending the money. Roughly at the same time as the wire transfers were taking place, the Saudis were busy repaying debts to state contractors…Today’s bond issuance will not be the end of the Kingdom’s attempts to raise cash: the government aims to raise more than $100 billion in non-oil revenue a year by 2020, through measures including value-added taxation.”
