2015: 401.85
2014: 398.91
Source: CO2 Earth.
Saturday, January 14, 2017
Staggering Decline In Saudi Arabia's Cash Reserves Continues -- January 14, 2017
Source: http://www.tradingeconomics.com/saudi-arabia/foreign-exchange-reserves.
Compare these two graphs, taking particular note of the size of the bars for May, 2016, and comparing most recent data.
First, the "old" graph:
Now, compare to the "new" graph with updated data.
There are several things to note:
This is occurring at same time, Saudi's foreign policy (war in Yemen) costs are increasing, as wells as internal security (terrorism; subsidies to keep population content) are increasing.
By October - November, 2016, oil prices had started to recover, and yet Saudi's cash reserves were falling faster than ever.
At $50-oil, and a national budget based on $80-oil (wink-wink), I can't imagine this graph will turn around any time soon.
Projection from same source:
Compare these two graphs, taking particular note of the size of the bars for May, 2016, and comparing most recent data.
First, the "old" graph:
Now, compare to the "new" graph with updated data.
There are several things to note:
- the right hand (vertical) axis has changed
cash reserves had a slight uptick in May compared to April (2016) - from June, 2015, to November, 2015, one could argue the decrease in cash reserves was steep but somewhat "smooth"
- in the "old" graph, there was a deep drop-off in January, 2016
- although the decline seemed to flatten a bit in spring / early summer, 2016, it took another drop by autumn, 2016
- but, look at that huge drop-off in November, 2016 -- in percentage terms, it looks like the biggest drop since June, 2015
This is occurring at same time, Saudi's foreign policy (war in Yemen) costs are increasing, as wells as internal security (terrorism; subsidies to keep population content) are increasing.
By October - November, 2016, oil prices had started to recover, and yet Saudi's cash reserves were falling faster than ever.
At $50-oil, and a national budget based on $80-oil (wink-wink), I can't imagine this graph will turn around any time soon.
Projection from same source:
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:
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
Someone Must Be Reading The Blog -- January 14, 2017
Over at "The Next Big Thing," I just posted a note about drones a few days ago:
This was not a "staged" photograph. I had been in the living room when I went in to the bedroom to see if Sophia was taking a nap. She was not:
It should be noted that The London Review of Books, which she is reading, is more challenging to read than The New York Book Review which I generally prefer.
Jobs: drones. Operators: law enforcement; weather channels; news agencies; logistics; marketing; advertising; tabloid; city planners; military; IRS, tax assessments; insurance adjusting (hail crop damage); farming.Today a reader sent me this timely link: drone schools look to woo younger pilots for commercial jobs, from The Bismarck Tribune:
Leaders in the unmanned aircraft industry are trying to persuade young people who think drones are cool to consider flying them for a living.
Commercial pilots must obtain a Federal Aviation Administration drone license, and some companies that employ such pilots have started selling classes that help students prepare for the FAA test or just figure out whether they would be interested in such a career.
"I think a lot of people my age are interested in drones because it's cool technology that is really just starting to be available for everyone," said 17-year-old North Dakota high school student Ava Niemeier, who plans to attend new training being offered by a commercial drone company in her state. "There are a lot of kids at my school with smaller drones that they fly for fun."
Businesses use drones to take photos and video, for security and to conduct inspections or surveys, among other things. With the number of commercial drone operations outpacing the pool of certified drone pilots, experts say more training is needed to help young flyers operate the planes legally and safely.
*******************************
Reading The London Review Of Books
This was not a "staged" photograph. I had been in the living room when I went in to the bedroom to see if Sophia was taking a nap. She was not:
It should be noted that The London Review of Books, which she is reading, is more challenging to read than The New York Book Review which I generally prefer.
Update On Israeli Natural Gas Discovery -- January 14, 2017
Updates
February 21, 2018: Noble Energy, Israel’s Delek to supply gas to Egypt in $15 billion deal.
Original Post
Does anyone remember that story on the big natural gas discovery off the coast of Egypt posted some months ago? Several other posts: if interested, search "Israel Noble natural gas."
Here's the link to an update to that story sent to me by a reader in The New York Times: energy boom could make enemies of Israel, new friends. Don't hold your breath.
Once a barren energy island in a part of the planet otherwise awash in resources, Israel is, after years of delay, finally pushing ahead with an ambitious strategy to tap offshore reserves that could transform its economy and, it hopes, its place in a historically hostile region.
If all goes according to plan, Israel will not only become largely energy-independent, it will also supply neighbors that will have new reason to be friends.
More:
Israel has been looking for energy since the 1950s, but the breakthrough came in 2010 with the discovery of fields called Leviathan and Tamar, said to hold 25 trillion to 30 trillion cubic feet of natural gas. A partnership led by Noble Energy, a Houston-based company, and the Delek Group, an Israeli firm, has developed wells in Tamar; the first supplies reached domestic markets in 2013.
Israeli gas now produces more than half of the country’s electricity and has bolstered its economy. Leo Leiderman, the chief economic adviser for Bank Hapoalim, estimated that along with the broader decline in energy prices, the influx of natural gas translated to an additional 2 percent of gross domestic product. And that is with only a part of the reserves currently being tapped.
Leviathan, which is more than twice the size of Tamar, has yet to be developed. Exploration stalled because of disputes over how the government should regulate the potential boom. Critics like Shelly Yachimovich, a Labor leader in Parliament, complained that corporate “pigs” would profit off resources that belonged to the Israeli people. The Noble partnership resisted what it called changing the rules after it took the risks and invested considerable money in the project.
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