Arab leaders bank on pay hikes, tax cuts

BEIRUT: Arab leaders are scrambling to boost salaries and subsidies in a bid to head off the kind of popular uprisings that have threatened the Egyptian president’s hold on power and led to the ouster of Tunisia’s leader.

But experts warn the moves might actually prolong or exacerbate the economic imbalances that helped spark the unrest in the first place.

Many countries, including Jordan, Yemen and Syria , announced plans to ease the rage over decades of economic injustices by boosting subsidies on food, increasing salaries and lowering taxes.

In Yemen, the poorest nation on the Arabian peninsula , the government is increasing wages by up to 25% for more than 1 million civil and military employees – at a cost of $415 million. Syria announced a $255 million programme to provide cash for the poor and said it would boost heating oil allowances from $20 per month to $32.

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