Why Prince Salman's "Vision 2030" Will Fail -- January 14, 2017

Track Prince Salman's plan here.

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 

Countries that come to mind:

• Mexico
• Libya
• Venezuela
• Nigeria
• Iraq