What oil slump? Saudis spend without feeling pinch

Riyadh

SPEND the afternoon strolling through Riyadh's shiny shopping malls, or an evening at one of its luxury restaurants, and you'd never guess there's an oil slump.

That's not an accident, it's Saudi policy in action. Sharing oil wealth with the public has helped keep the Al Saud family securely in power as turmoil sweeps the region. When the revenue slows down, as it's doing now, the kingdom's rulers would rather run huge budget deficits than risk tampering with that bedrock social contract.

Eventually, economists say, something may have to give. The International Monetary Fund predicts a fiscal gap exceeding 20 per cent of economic output this year, and says that at that rate Saudi savings would run out after five years. Standard & Poor's cut th…