With the threat of a second global downturn looming large, most countries are tightening their belts in anticipation of hard times.
But not Qatar. The world's richest nation per capita said yesterday it was granting salary and allowance increases of up to 120 per cent to public workers. State civilian employees will receive a 60 per cent boost on their basic salaries and social allowances, while military officers will receive a 120 per cent rise on both. All other military ranks will be granted a 50 per cent increase on their salaries and social allowances, according to a decree by Sheikh Tamim bin Hamad Al Thani, the crown prince of Qatar.
Civilian retirees will receive a 60 per cent increase in their total pensions, while retired military officerswill receive a 120 per cent increase. All other ranks of military retirees will receive a 50 per cent increase in pensions. The increases may be welcomed by public-sector workers, but they could make the private sector less attractive to Qataris.
"Many GCC states have recognised that they need to make a concerted effort to attract nationals into the private sector. This dramatic increase in public-sector wages seems counterproductive to that aim," said Toby Simpson, the managing director at the Gulf Recruitment Group in Dubai.
The policy also runs the risk of creating inflationary pressures.
"There is a real risk of further polarising a segment of society in a nation where 30 per cent of construction workers are paid less than US$220 [Dh808] a month."
Qatar's large natural gas reserves have helped it remain among the world's richest nations.
The increases in benefits took effect on September 1 and are projected to cost 10 billion rials (Dh10.08bn) a year.