From Eurasia Review, Saudi Arabia's flawed "Vision 2030" -- analysis, December 26, 2016. Some data points:
- after Saudi Arabia's cash reserves had dropped $150 billion, Crown Prince Muhammad bin Salman finally weighed in: with a 2030 plan -- developed by McKinsey
- Saudi's annual GDP growth between 2003 and 2013 (that period included record crude oil prices): 0.8
- Saudi's annual GDP growth is less than most emerging economies
- Prince Salman's plan seeks to reduce role of public sector; increase role of private sector
- the plan calls for the creation of a huge sovereign wealth fun to be funded by an unprecedented IPO of a 5% stake in Saudi Aramco
- Riyadh has already wasted precious time: the country spent trillions of dollars 1970 - 2014 on 5-year development plans that left 90% of the annual Saudi budget dependent on oil revenues
- Analysis: Prince Salman's plan will fail for four reasons
- it is an overblown mega-project scheme
- it focuses on economics and discards political development
- it superficially approaches the challenge of instilling virtues of achievement
- it takes the generation of non-oil revenues as it ultimate goal
- The Mega-Project Scheme
- a $2 trillion investment program; raising that much money is practically next to impossible unless oil prices see a significant appreciation ($50 oil isn't going to do it, folks) or unless Saudi plans to sell a higher proportion of Saudi Aramco
- identifies eight sectors to generate 60% of Saudi economic growth
- turns out that the petrochemical sector is already well developed and has little room to absorb more workers
- same thing for mining
- most sectors have low-paying jobs, which Saudis won't take
- Saudi can't possibly compete in health, banking and finance
- tourism? LOL. It's growing; it is the second largest sector after oil, but Saudi resistant to issuing visas
- focus on universities? LOL
- Economic Development But No Political Reform
- Salman glosses over fact that King Saud's modern Saudi state rests on the three pillars of religion, tribalism, and oil
- Wahhabi religious doctrine is synonymous with radicalism
- Salman is trying to deconstruct the pillars of the Saudi political system without replacing them with modern ones
- the only thing political about Vision 2030: the kingdom will forgo its traditional role of a swing oil producer instead opting for a major role in the global energy industry that requires transformation of Aramco into a "fully-fledged international oil company"
- Saudi Cultural Values
- Saudi's cultural values do not support Vision 2030. Does more need to be said?
- All About Revenues
- lots of taxes; end of subsidies
- If The Plan Fails
- could go the route of Syrian president Bashar al-Assad
- Mexico
- Libya
- Venezuela
- Nigeria
- Iraq
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