Saudi Finance Minister: “I Wouldn’t Care If The Oil Price Is Zero”

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Yves here. The ancient Greeks would probably warn the modern Saudis not to risk taunting the gods.

Due to our focus on finance and economics, we cover the Middle East only incidentally and mainstream media focuses on hot topics, like fighting in Syria, efforts to pressure Iran, and Israel v. Palestine. Yet the US recognizes that Saudi Arabia represents a huge risk for US policy. The old king Abdullah, who died in 2015, was well liked. The former Crown Prince, now King Salman, by contrast, was unpopular and, to put it politely, seen as not up to the job of keeping the country stable as oil revenues were falling, which in turn would strain formerly generous social safety nets.

So I am putting this post up to encourage informed reader comment, particularly in light of what seems to be wishful thinking about how quickly the country can change the configuration of its economy.

By Haley Zaremba, a writer and journalist based in Mexico City. Originally published at OilPrice

The Saudi Deputy Crown Prince Mohammed bin Salman unveiled the nation’s ambitious “Vision 2030” in an interview with Al-Arabiya in April. The roadmap lays out a wide variety of economic reforms that will transition Saudi Arabia away from oil and into a broader array of investments.

While Saudi Arabia’s economy is currently suffering from an 18-month decline in oil prices and soaring unemployment rates, they are planning for a future in which they won’t have to worry about the price of oil at all. Speaking of the plans outlined in Vision 2030, Saudi finance minister Mohammed Al Jadaan told CNN,“We will not really care much whether the price is 40, 45, 50, 55 at that time because we have gone significantly out of our way to be independent of the oil price…We are planning to totally [end] that dependency that we have been living for the last 40, 50 years. Hopefully by 2030, I wouldn’t care if the oil price is zero.”

Vision 2030 proposes an economic restructuring that would in theory add 6 million non-oil jobs by 2030 and generate $100 billion per year in additional non-oil revenue by 2020 by reducing subsidies for gasoline, electricity and water and introducing a new value-added tax as well as initiatives to foster more non-oil industries like mining and military hardware. They have also suggested grandiose ideas to create the world’s biggest IPO for Aramco (the world’s biggest oil company) and to establish the world’s biggest sovereign-wealth fund worth over $2 trillion to invest in a wide variety of assets. Related: Kuwait: Deeper Cuts Are On The Table

These proposals, groundbreaking in their extent, are especially radical in a country relying on oil for 90 percent of its GDP. Whether these ambitious goals are realistic for Saudi Arabia, whose national deficit is expected to reach 13.5 percent of GDP this year after over a year of decreasing oil prices, remains to be seen.

The 30-year-old Prince bin Salman also announced that he believed the plan could be realized even sooner, eliminating Saudi Arabia’s oil dependency by 2020, in a statement that the Economist referred to as “manic optimism among the youthful new policy-setters of the royal court.”

While the Vision 2030 roadmap is full of general policy suggestions and enterprising statements of intent, it lacks clear directives and detailed strategies. Saudi policy-makers have been promising logistics for months, but have yet to release anything of the sort.

For decades, any efforts to wean the Saudi economy off of oil has been met with opposition ranging from disinterest to disdain. If Vision 2030 is to have any success, it will rely upon bin Salman’s ability to mobilize Saudi youth and instill a desire to work within new fields. As the youngest defense secretary in the world with a youthful outlook and a strong presence in social media, bin Salman may just have the sway it takes to realize this endeavor.

Diversifying Saudi Arabia’s economy could also be the answer to the nation’s growing youth unemployment. Timothy Callen, the assistant director for the Middle East and Central Asia department at the IMF, says that reducing unemployment among young Saudis will be one of the economy’s biggest challenges this year, with the rate already at 12 percent for nationals and 33.5 percent for youth and climbing steadily in conjunction with more and more young people entering employment age.

Saudi authorities have said that they hope the reforms proposed in Vision 2030 will decrease unemployment just 7 percent, with the amount of women in the workforce increasing from just 22 percent to 30 percent stemming from increased education and employment opportunities. The Al-Bayan Center for Planning & Studies has criticized the modesty of these goals in comparison to the brash ambition of Vision 2030 as a whole, arguing that “the hesitancy to establish the requisite social and political reforms that will inevitably support economic reform questions Saudi Arabia’s ability to diversify the economy and attract necessary foreign investment.”

By 2030, the same year that bin Salman claims that Saudi Arabia will have broken up with oil, some experts predict that youth unemployment will increase to over 42 percent as the population continues to boom. These are two vastly different foresights for Saudi Arabia, but one thing is certain: the country will need more than just a vision to secure a brighter future.

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  1. Jack Brown

    Meh. Go back and read Luciani’s “The Rentier State.” This is not a trap from which states escape in two years or a decade. Bin Salman and the Saudis are delusional if they actually believe the nonsense they are spewing to the western press. They don’t even have an industrialization plan, or even have an educational system to speak of actually.

    1. Ruben

      They have several strong industrial areas (chemicals and plastics, minerals, food, infrastructure) and a steady development in the last 30 years. Recently the focus has been in zoning industrial developments (creating industrial cities)(1).

      The educational system is strongly focused on religion at the primary and secondary level but it gets a westernized branch at the tertiary level (but with sex segregation). A few universities are well ranked internationally (because of both local and foreign faculty), university students (accepted by school performance rankings) receive free education, free housing inside University campuses, a stipend from the gov’t, and the best get gov’t funding to study abroad, mostly in the USA and the UK.

      The UAE did it a few decades, it is not beyond reach for SA.

      (1) Zoning can be a general model to isolate development from cultural restrictions. Eventually zoning can be inverted, inside out, outside in.

      1. Clive

        One of rhe things that’s always interested me about Saudi Arabia is how it has never developed a strong indigenous high skilled workforce. I don’t often get spammed by recruiters for non-UK work, but when I do, it is invariably Saudi Arabia doing the asking. A quick trawl shows that there is still a lot of work that should be being done by Saudi Arabians themselves but they need to get migrants to do. The salaries are high, but they need to be to compensate for the repressive social and moral environment.

        I know the expat story from both sides and the contrast with, say, Japan, is striking. My dad did the expat lark in the postwar reconstruction phase and rapid industrialisation Japan went through. His niche and difficult to replicate / obtain skill was HV electrical distribution grid design. This is something that you can learn the theory of, but there are subtle differences between the theoretical aspect and what you need to build on the ground (a big subject which I won’t cover here).

        Even a college graduate with a degree in a relevant specialist subject needs 5, preferably 10 years of on the job training, training from someone who’s already learned the tricks of the technology trade. But what do you do if there’s no-one (and in the aftermath of the war, few Japanese possessed anything other than military related advanced skills, they were hopelessly ill equipped for peactime economic development) to learn from? You get in expats of course. This is expensive as you have to make the payment of a premium to lure people away from their home country if they are experienced (i.e. older, not recent college grads).

        But that is what the Japanese did.

        However, apart from the grid build-out, what was given almost as higher priority was in acquiring the know-how. The Japanese valued this more than anything else you could have mentioned. There was no realistic limit to what they would pay to get it (keep in view that Japan in late 1960’s / early 1970’s was not really yet in first world country territory). As soon as they had it, it wasn’t like they really wanted to have a permanent reliance on non-native labour, so it was sayonara to the army of expats.

        Saudi Arabia has been luring in expats since the 1970’s oil boom. If it was going to wean itself off them and do the up-skilling its indigenous workforce, it would have done it by now. Instead, the bright kids seem to want cushy work in the oil sector.

        So in summary, Saudi isn’t just facing a nasty case of Dutch Diesease but also the same sort of problem we have in the UK and the US (here, people would rather work for Goldman than in engineering) but you substitute the oil sector for finance.

        1. PlutoniumKun

          Years ago I worked for a construction project management company. They had major projects in SA, other parts of the ME, and in China. The differences in the stories I heard from older hands was very striking. The company had a major hand in developing SA’s large primary chemical industry – essentially making base chemicals from the ‘wet gas’ that used to be flared off. Everything was done by expats, either Europeans and Americans who gave the orders, with pakistani’s, etc., doing the hard work on the ground. A certain number of Saudi’s would be employed of course, but they would swan around and not do much. In contrast, the company also built the first major subways in China. They had to employ only Chinese. Half way through the biggest contract they were thrown out of China, as soon as the Chinese employees had worked out how to do the job. The Chinese don’t hire expats for railway engineering any more (although perhaps they should have for their concrete industry, but thats another story).

          The use of expats to accelerate technological development is a tried and true technique – the Japanese and Chinese (and many other countries) have used it well. The Saudi’s had no interest in this, expats are just labour for them.

          Having said that, there certainly are talented Saudi’s – Aramco appears to be a very well run organisation – running a big state oil company is not as easy as it looks, as the Brazilians have discovered. But I suspect there is an elite level of talented Saudi’s who work ‘inside’ the system. But they completely lack that middle layer of experienced and educated workers who are needed to run a wide variety of tasks for a properly functioning economy. And that won’t happen overnight. It certainly won’t happen by 2030, the Saudi’s are utterly deluded if they think they can create a new economy by then. Especially if they blow all their spare cash on F-15’s, which is what they seem determined to do.

          1. PlutoniumKun

            Just to add to my point about F-15s.

            One of the odd things about Saudi Arabia is that it spends a vast amount of money on defence yet actually has a very small and inadequate army (as its proving in Yemen). This is actually quite deliberate. SA is a family concern for the House of Saud, and they know that a large army would be a threat to them, or at least a counter balance to their power, as in Egypt or Turkey. So they deliberately focus their spending on a high tech air force which can be supported (mechanics, etc) by expats, with a small core of highly trained Saudis at the cutting edge (pilots, tank commanders). This allows them to select only the best and most loyal people for these high paid jobs, mostly in the air force, but also in parts of the army and navy.

            The blow-back for this however is that for a smart and ambitious Saudi, the best way to get ahead is to either go into Aramco (which is really an extension of the House of Saud’s family business), into the military, or into one of the handful of favoured construction companies which dominate the sector. This drains the other productive sectors of the brightest and best. Its exacerbated by the tendency of families in the region to push their brightest kids into medicine which is seen as a safe money earner (as the economist Ha Joon-Chang has noted in another context, an increase in demand for places in courses for medicine and law is a sign of a flawed labour market, because it means the private sector is not providing safe good jobs for the most academically able).

            This might not be a problem if their educational system was producing a good number of mid level engineers and techs, but this simply doesn’t happen.

            1. Clive

              This pretty much exactly mirrors my uncle’s work in Jordan (potash extraction from the Dead Sea, if I remember correctly). The dynamic is exactly as you describe — it’s not that there aren’t centres of excellence but rather that those there are end up extensions of the ruling family / elite.

              This effectively scuppers the development of private enterprise. You need to cosy up to the established order and gain their favours and support. Commerce, especially in a world saturated with supply and lacking demand (oft covered here on Naked Capitalism) is tough. Starting a new business and trying to break into established — and often highly protected — markets is tougher. Throw in trying to figure out who you need to bribe / pay off in other ways / flatter / curry favour with and the task becomes almost impossible. If you’ve got any kind of talent at all, you’re either going to get out and go elsewhere if you can or else throw in the towel and go where the easy life is working for the embedded power players (e.g. Aramco).

              Unless Saudi authorities sort out this — I was going to call it a graft problem, but that’s not really what it is, it is more of a having to pay tribute problem — dynamic, they are not going to get very far.

              1. Mel

                A central control problem, might it be? Wondering, at this point. Near-zero power at the periphery?

                1. Clive

                  Indeed, one of the main problems with an autocracy is a tendency to be rather autocratic. Contrary to what autocrats seem to think, this isn’t a good thing.

                  1. Mel

                    I apologize for the vagueness of that question.

                    Maybe better:
                    “What do you give someone who has everything?” A bribe, evidently.

            2. optimader

              Been the case for years.
              Re: Blowing money on F-15s vs a standing army. Flying an F-15 is cool. You get to go fast in a environmentally controlled “office” and all you have to do is push buttons, optionally move a stick and pedals around a bit. Working on F-15s is not cool, in fact, more times it is a hot and dirty job.

              Worse yet being a soldier!
              What SA needs is the equivalent of the French Foreign Legion, but then you still need a loyal Prince willing to get out there and manage it. But then who’s in charge the King’s Manderins may confide to the King? Probably the Prince when it’s finally organized..

              And this is why SA is a perpetually calibrated on the brink of being a debtor nation debtor with per capita income a fraction of neighboring oil producing countries.

              The House of S is basically like a high net income western family living off the cash flow, addicted to bling. They allow enough table scraps to fall to floor to keep the ignorant society in a theocratic stupor.

              The high-line western brands of course have understood the dynamic for a long time and have a well honed program. Sell them bright shiney objects and provide the support services. And they do have an appetite for banging through the bright shiny objects.

              SA did try and institutionalze corporate hiring of SA nationals as a hard % of employee head count but all they did was lay around, read the koran and play video games. Failed initative, think the Sopranos with the fat guy sitting around at the jobsite in a lawn chair reading sports betting sheets.

              It will be decades if ever before SA can produe a generation of relevantly educated young people willing to work middle class jobs.

            3. HotFlash

              Funny thing is, a situation like this was described in a Japanese anime from the ’70’s/80’s, Area 88. Makes you wonder what news they get that we don’t? Or maybe about the incisive understanding of artists?

              1. Plenue

                IIRC Area 88 seems to take place in more of a not-Iran than a not-Arab country.

                As for what the Japanese know that we don’t, probably quite a lot. Though an American protectorate, they’re so far removed linguistically from the US that they very much live in their own little bubble and can carry on internally completely unmolested by outside parties. They’re also under no illusions as to their own subservient, defeated status (allegories of their situation and references to ‘that country’ abound in their fiction). I would imagine there’s quite a lot in the world they have a much better understanding of than their masters (and in this case, their masters Arab ‘allies’). Though I can guarantee there’s also things about themselves they’re largely blind to.

          2. Harrold

            My father worked in Saudi off and on for several years in the 70’s-80’s. He told me that any job that required your hands to get dirty ( i.e. what we would term a blue collar job) was looked down upon by the majority of the country.

            His specialty was teaching how to repair avionics equipment on military aircraft. That was considered equivalent to dung collector.

          3. Ruben

            About blowing their money in arm deals with the USA, not so sure; one of the pillars of the economic diversification plan is to build a local arms industry. Without knowing the details of the deal signed a few days back, I’d assume they put it in the context of their economic diversification plan-

            1. PlutoniumKun

              Its reported that it includes a lot of local assembly of US weaponry.

              However, thats not really economic diversity unless it can lead to the development of an export market with domestic designs – something that (for example) Pakistan has been doing. Snapping together F-15’s from kits is a long way from producing a fighter which can be sold abroad.

              1. Ruben

                Check this.



                “In effect, SAMI will be the Kingdom’s very own military-industrial complex, researching, designing and manufacturing the full range of armaments and hardware. The revived relationship with the US defense industry should result in the necessary transfer of sophisticated technology to Saudi Arabia.”

        2. a different chris

          >there are subtle differences between the theoretical aspect and what you need to build

          Well I would argue that there is nothing subtle about what happens when you get Kilovolt infrastructure wrong!! ;> Sounds like he had a fascinating career…

        3. optimader

          but also the same sort of problem we have in the UK and the US (here, people would rather work for Goldman than in engineering) but you substitute the oil sector for finance.

          Or more basically complain there are no jobs, or it’s “wage slavery” at entry level positions, particularly after blowing an ill considered wads of dough on ill considered undergrad degrees.

      2. Irrational

        Both chemicals and plastics industries presumably built on oil, gas or by-products?

        1. PlutoniumKun

          Yes, back in the 1960’s they used to flare off all the gas, including ‘wet’ gas which is made up of alkanes such as butane and propane as a waste. It was realised that this was pretty wasteful and stupid and a major investment was made into turning these into base chemicals such as ethylene, propylene, polyethylene, etc – the stuff thats then shipped out and turned into plastics, polymers, etc. Saudi Arabia is one of the biggest producers of these chemicals. Its an unglamorous industry that doesn’t produce much jobs, but SA has always been actually quite good at maximising the value of its petroleum products.

    2. oh

      Agreed. I think it’s a pipe dream. Besides, US foreign policy will not allow them to industrialize. When the oil revenues are gone and there’s no $$ to give to the US Govt. Saudi Arabia will cease to exist and the King and his kin will have taken refuge somewhere else.

    3. a different chris

      You don’t have to believe something is possible to understand that it is necessary. Heck what was the name of that movie where the Saudi Prince(?) and… Matt Damon’s(?) character had pretty much this conversation, along the lines of “you will be living in tents again if you don’t change” and the Prince strongly agreed.

  2. Felix_47

    They can always get rid of their contract labor force and ship it back to the slums of East Asia unlike Western Europe and the US where the imported labor force stays and multiplies producing masses of discontented youth.

    1. Ruben

      This is actually a good idea and it is happening. They’ve started with the illegals, those overstaying and working in the black economy, and the legals ones in some sectors of the economy (telecommunications, shopping centers and retail generally). There is clearly a vast excess of super cheap labor from East Asia and North Africa. When this part of the new policy is completed, places like the State of Kerala in south India, Bangladesh, Egypt, Philippines, will see a large drop in remittances and equivalently a large surge in poverty, while the domestic hole in labor will take some of the unemployed youth. If one local replaces five foreign labor, that would be a big step forward.

    2. I Smell BS

      That*s what the word “contract” means, Felix. When your contract is up, you go home.

    3. PlutoniumKun

      The problem for this with the Saudis is that bringing in contract labour is not just for their domestic use. Its part of their foreign policy outreach and it helps maintain their control over poorer muslim nations such as Pakistan. Sending a large chunk of Pakistanis and Indonesians home would be very damaging for their wider strategy.

  3. tony

    Maybe he is delusional. Or maybe he is buying time so he can move his money out before the country blows up. In either way, the likely end result seems to be the same.

    The most obvious weakness of the country is that it imports 80%, while having high population growth and is quickly using up the aquifers. Saudi-Arabia will exist only as long as keeping the country propped up is worth the oil.

  4. Jean Inconnu

    Saudi-Arabian economy booming without oil? Gimme a break.

    No later than when the last drop of oil has been pumped up and squandered, this whole artificial edifice in the desert will crumble to ruins, and the country will return to what is was before: an inhabitable desert crisscrossed by groups of Bedouins on camels permanently looking for a drop of water.

    The prospect breaks my heart /sarc

  5. kimyo

    euromonitor predicts that saudi arabia’s population will reach 39.1 million by 2030. what will they drink?

    Saudi groundwater “will run out in 13 years”

    Saudi Arabia’s groundwater will run out in the next 13 years, according to a water expert at King Faisal University, reported the Saudi Gazette.

    A faculty member at the university, Mohammed Al-Ghamdi, made the announcement following an issued report by the World Bank on global natural water scarcity.

    A Saudi Water Crisis Lurks Beneath the Surface

    Even with the largest desalination capacity in the world, Saudi consumption far outstrips its naturally available renewable water resources.

    By some estimates, natural water resources in parts of the country are in danger of disappearing within the next 20 years. The problem is largely due to the Saudi agricultural policies of the last 50 years, which stressed the country’s minimal resources.


    Still, desalination will not come close to making up the difference between demand and available renewable water resources. To protect its dwindling water supply, the kingdom must invest in the water sector, reduce system loss, decrease agricultural and industrial consumption rates, and end unsustainable water rate subsidies.

    Investment will increase desalination capacity, but that alone will not be enough to make up for natural deficits, and Saudi Arabia will continue to teeter on the edge of what its limited water resources can support

    1. Ruben

      When they get rid of excess unqualified foreign labor, not only the labor market will improve for locals, but also total population will decrease by anything between 10% to 30%, depending on the source, thus reducing pressure on water reserves, kicking the problem a few years into the future. This is real limiting factor of course.

      1. PlutoniumKu

        Getting rid of expats would have very little impact on SA’s water demand. Most of their water is used for very unsustainable agricultural practices, including a big dairy industry. This is mostly to produce luxury fresh food for Saudi’s. The amount of water used by a typical Pakistani guest worker would be negligible compared to what a dairy cow drinks.

        1. Ruben

          They do have a big dairy industry but you cannot imagine how much water labor consumes when working under the scorching sun, because this is what they do mostly.

          1. PlutoniumKun

            Something like 83% of water used in SA is for agriculture (see table 3.1 of that link). Human drinking water is usually a neglibible part of water consumption in hot countries like SA. Its all about agriculture and industry – but mostly agriculture in SA.

            In reality, the Saudis could save vastly more water by reforming agriculture than by expelling expats. But the local dynamics are that providing cheap water allows big landowners make big profits by turning desert into milk. Its insane (in particular when you realise they have to keep cows indoors in air con), but thats the SA system.

            1. Carolinian

              they have to keep cows indoors in air con

              Wow. Great comments on this post. SA’s problems seem in some ways similar to our American Southwest where parched areas were settled as a matter of government policy despite the practicalities. Here too nobody knows what will happen when the water runs out but there once were talks about towing some icebergs down from Canada or running a water pipeline up to the border (the Canadians weren’t asked what they thought about this).

              When the minerals are gone and the oil and the agriculture the Saudis can always do what we are doing here: casinos.

              1. JohnnyGL

                Riyadh WISHES they could get the rainfall of AZ!!!

                A quick use of the internet tells me that Tucson gets around 12in per year, and Riyadh and Mecca get around 4in. Medina basically gets too little rainfall to even count (seems like under 1in).

                Las Vegas gets around 4in (Reno is around 7.5). Of course, no one dreams of launching sustainable agriculture to feed 10s of millions of people.

                Water aside, look at the trouble Venezuela is having feeding itself and they get MUCH more rainfall than the Saudis. Breaking the oil curse is very hard, even when you’ve got genuine agricultural potential in the land.

                If you can’t feed yourself as a country, you really need to re-think your ambitions for what’s possible.

                1. Kevskos

                  Yuma AZ gets less than 3″ and we are the Winter Veggie capitol of America. We drain a lot of the Colorado River to do that as well as some groundwater.

                  There are ways to grow crops with a lot less water but I doubt that SA just like the US will not prioritize those technologies until things are past desperate.

              2. oh

                That’s why they’re going into finance. The stock market is the biggest casino of them all!

            2. Ruben

              Thanks for the link to the report. I examined the table and you have a good point. The thing is however, food security is vital while foreign cheap labor is not, maybe quite the opposite, it keeps the domestic labor market depressed. In the mid term it is probably better to save the water that would go to quench the thirst of the laborer doing menial jobs under the scorching sun for water-intensive agricultural uses.

          2. oh

            There’s a big dairy industry there all right and the milkers from the US are at the top of the list! /s

      2. visitor

        Industrial and agricultural activities generally require very large amounts of water.

        Saudi Arabia is therefore in a bind: a growing population has to drink and eat, hence consumes a lot of water. Diversifying from oil leads to new industrial activities, hence consuming even more water.

        Expelling all expats would just postpone the day when Saudis will have to recognize that a desert can only accommodate a small population living within a restricted economic framework — basically what Arabia (and the Sahara, and the Taklamakan, and the Gobi desert) was historically: trading posts, stopovers and crossroads.

        1. tony

          It’s not impossible for a large population to live there. Geoff Lawton has been turning the salt desert in Jordan into food forest. Saudis could have invested in something like that.

          1. JohnnyGL

            I’m a huge fan of what Geoff Lawton and the work that Permaculture followers have done in various places around the world. I think we need more of it all around the world, and fast.

            However, it’s worth considering 1) the limits of what’s possible and 2) what’s actually underway in the Saudi context.



            Regarding 1)
            Neal Spackman was a top student of Geoff’s and is still working with local Bedouins (formerly pastoralists) on the Al Baydha (near Mecca) project after 7 years of living there. What he’s accomplished is still pretty amazing, but it takes a LONG time and I suspect they’re still far from being able to feed themselves solely with what’s produced on site. I think they went around 3 years with no rain whatsoever (2011-2014). So, all the earthworks (swales, check dams, gabions) sat there waiting for rain to fall. They’ve also had to use a lot of drip irrigation to keep trees and other plants alive during establishment, probably from recharged groundwater during the few rain events they have had.

            Regarding 2)
            If Saudi ruling class was serious about these kinds of projects, they’d need hundreds, probably thousands of sites like this around the country. It would require a massive mobilization of resources to build infrastructure and tremendous, long-term patience to wait for projects like this to start to gain productivity. Even in a couple of decades, I doubt there will be any ability to export anything for decent money that can’t be produced elsewhere more cheaply, more productively and more sustainably.

            However, we don’t see anything like this kind of mobilization drive toward self-sufficiency underway. As described above, it’s mostly big landowners pursuing high-value added, resource intensive stuff like the dairy operations listed above. These operations require large inputs from outside that aren’t integrated into a larger, sustainably productive environmental context that can handle large amounts of cattle.

            Saudi Arabia was historically suitable for camel herding, maybe goats (I don’t know in detail), but not cattle (too hot, hence the need for A/C), with pastoralists who followed whatever little seasonal rainfall came down on the peninsula.

            I would guess that things like the Al Baydha project are seen by the Saudi ruling class as a way to keep the native bedouin tribes busy and prevent them from congregating in slums in the cities since they don’t have the large range (due to urban settlement, oil driling, etc.) to follow their traditional pastoralist lifestyle and the environment was collapsing due to overgrazing in the restricted areas.

            1. tony

              You are right of course. I would not trust the Saudi rulers to clean my toilet, and the permaculture solution would only allow Saudis to survive in poverty. However, the current choices have probably locked in a complete collapse of the society and and a massive population collapse.

              Just because something can be produced more efficiently elsewhere does not mean you have the exports to import those things.

  6. H. Alexander Ivey

    Yves did say she wanted to “encourage informed reader comment,” so full disclosure. The following is not ‘informed’, it’s just ‘reader comment’. Caveat emptor as the mainstream economists say…

    Lets see. Today is 2017, their target is 6 million (really?) new jobs by 2030. That’s…2030 minus 2017…carry the one, ten minus seven…. 13 years! About the only way I can see putting 6 million, on the ground, real, live, eating and breathing people to work, in 13 years, is by creating a world size army. Yeah! That could do it! Go team go. Otherwise, … hard to see how you can build things and train people fast enough to reach that target.

    Their ideas of ‘investments’ sound like one step away from ‘speculation’ and several steps away from developing intra-state infrastructure and manufacturing with employment opportunities.

  7. uncle tungsten

    #kimyo the SA kingdom encouraged the agricultural editor to pump the ground water out all the way back to the last ice age and the one before. That is 20,000+ year old water! and it all went to grow wheat for approximately 30 years. No longer viable and end of diversification. Maybe they could diversify into solar power locally and feed someone’s grid or buy their way into other national grid systems but there won’t be many jobs in that. Population growth is no longer a functional contributor to social stability, rather the antithesis. The SKA is about to taste the bitterness of a failed state. It is not alone as Trump can attest.

  8. Mickey Hickey

    According to my daughter there are numerous Saudi women doing STEM courses at universities in Toronto some of them with husbands doing Masters and Phd level study. This came up when my daughter explained to me that the Saudi Gov’t funds all expenses including $2,500 a month apartments (per student), tuition, books, living allowance and in some cases husbands in another Canadian city getting similar funding. Nothing luxurious just to what would be considered middle class by Canadian standards. This has gone on for years and has ramped up in the past year so the Saudi Gov’t is addressing what could be called import substitution which does not augur well for expats. Of course they are only a small fraction of the number of Chinese studying in Canada but then Saudi has a relatively small population.

    1. Harrold

      Where will these educated Saudi women work? The number of gender mixed industries is very very small.

      They can’t even drive to work.

    2. HotFlash

      Been away from UofT for a long while, but back in the ’80’s our dept (then called Near Eastern Studies, focusing on the *ancient* near eastern languages and archeology) had always one or more “scholars” from ME countries, well connected — eg, the nephew of the Director of Antiquities of a certain country. Dunno where the money came from, but he always seemed flush and tuition, books, etc werenot a problem.

      The young man was notorious for his minimal ancient language skills, the lightness of his class preparation, the brevity of his doctoral thesis (18 pages, IIRC), and the expectation that he could wangle dig permits from Uncle. Didn’t actually happen on account of some wars.

      This will be a hard culture to change.

  9. Robert NYC

    The Crown Prince is beyond delusional. Once the oil is gone, Saudi Arabia will go back to being an impoverished third world hellhole and the ruling families will revert to living in their Bedouin tents and falconing for food.

    and how about this nonsense!

    “As the youngest defense secretary in the world with a youthful outlook and a strong presence in social media, bin Salman may just have the sway it takes to realize this endeavor.”

    bin Salman and Saudi youths are going to tweet their way to prosperity!

  10. HotFlash

    Depends on how far back in history you go. The god Šamaš was called “the calf of the wild cow” and the king wore cow ears as part of his crown. I have tried to find links to images and kings that I know of (not personally, I am not quite that old), but it seems all is under private ownership/control, eg, pinterest and such. What times we live in!

    But that was all before salinization of the land due to irrigation. Although the process is millenia old, attention has been brought to it again recently. So far this is in public domain, but maybe we should read quick, and archive?

    “Whom the gods would destroy, they first make crazy.” Well, I submit, all they really have to do these days is to make us forgetful. Seems like they are succeeding at that.

  11. Mickey Hickey

    Most of you are painting Saudi Arabia as being more primitive than it is. In the 1960s’ I remember being briefed on Persian Gulf mores 1) Do not talk to the women. 2) Do not look at the women. 3) Do not touch the women unless you want to be castrated before your throat is slit. At the end of the wharf there would usually be a convenience store, half a dozen camels, an army jeep, a couple of donkeys, a few soldiers relaxing in the shade. Todays SA is air conditioned skyscrapers, driverless trains, booze in the compound, weekends in Qatar, Bahrein or Dubai if you want to get drunk and actually talk to women. Women do productive work in SA after all it is their country and their culture and in management offices the sexes do mix although women stiil need the hair covering in the presence of men. As for driving there are Filipino and Pakistani chauffeurs or Taxis (yes she can take a Taxi with a male driver). The separation of the sexes dates from tribal times (pre 1932) and it is a class thing about men protecting the women in the family. there is severe loss of respect for men whose wives go out to work or cannot afford expensive clothing, shoes and handbags as well as cars and chauffeurs. When the oil revenue drops off and two incomes are required then there will be women’s emancipation as sure as night follows day. The driverless trains have carriages for men, families and First Class. In Canada it is not many years since bars were divided into Men only and Ladies and Escorts. In Ireland there were snugs (cubicles also call The Office as in John is not here right now he is in the office) where women could drink alone or with men, rarely would you see a woman in the open bar area. Today of course the women in Ireland have no qualms about drinking in the open bar area.

  12. RBHoughton

    The progress that alternatives have made is not revealed in the western press but occasionally comes into view with things like Al Gore’s TED talk last February. Fact is, renewables are gaining market share quickly and the traditional oil and gas market is shrinking.

    All that military protection of wells and refineries and ports, all that investment in land and marine tankers, all the storage facilities and the myriad gas stations everywhere – they suddenly appear as temporary blots on the landscape.

    You only hold an IPO when you need investment in some cunning plan to make a fortune or the future looks dodgy and you want others to carry the risk. Whither Aramco? There appears an even chance that the House of Saud by 2030 will have reverted to quarreling over water in the desert.

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