The Course of Empire by Thomas Cole
Saudi Arabia is engaging in, in the words of the Guardian, a privatization so comprehensive it dwarfs Thatcher or even the great post-Communist Russian fire sale.
That’s…large.
It is also a consequence of the price of oil. Saudi Arabia isn’t making enough money from oil to support its government expenses.
They could directly tax or charge their population for the difference, of course, but privatization allows them to sluff off the blame. Sell assets that can charge more and cost more than they make right now, let private actors do the charging.
This kicks the problem down the line a bit, and distances the Saudi Royal family from some of the blame, but it doesn’t make much difference in the long run.
Saudi Arabia needs much more from the outside world than Saudi Arabia now produces. That’s what has to be changed, and the situation is only going to get worse. (When electric cars become the norm, Saudi is cooked, as I have noted before).
The assets the Saudis are selling are also that which make them legitimate to their population. The House of Saud bought a lot of peace from their subjects by spending a lot of money on their subjects.
When they aren’t able to do any more, their legitimacy will take a huge hit. If they aren’t doing anything for people, why keep them around?
I stand by my prediction of revolution in Saudi Arabia. Timing is always hard to predict, but 10 to 20 years seems likely.
This is exacerbated by incompetence at the top. The war in Yemen was supposed to be over in months, and isn’t; it’s a fiasco. The blockade of Qatar was supposed to bring them to heel, and hasn’t, but has pushed them into the orbit of Iran and Turkey.
The current generation of Saudi rulers are spectacularly incompetent. This isn’t surprising, it happens to all wealthy or powerful families in time when their scions are protected from the real world, which the Sauds always have been.
Buying Saudia assets located in Saudi Arabia may work out very well for some people. But it will be a political and possibly military game as much as a financial game. As such, it is only for sharks. A lot of people got hurt trying to make money after the USSR fell, and while some won big, they were a minority.
The prelude to the Age of War and Revolution chugs on.
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