I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998...
These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have little industry to fall back on and wait for the next rise (or foment civil unrest).
Some of the leaders do know that they can't live on oil forever, so you see some sovereign wealth funds investing in things that their people can learn and use to build their society more resiliently. But in general the improvements are not very deep -- the money comes too easily and people get used to state intervention and not having to work.
> I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998
The point here is that sub $40 oil is becoming the new norm. While these countries can weather a 2-3 year drop in oil prices, those short term drops are more and more frequent and the bottom keeps getting lower.
Between electrification of transportation and reduced travel which may last for another 6 months (or much longer, it's not really clear), demand is down. On top of that, any time oil stays over $50/ barrel for a prolonged period of time, shale oil and oil sands production increases putting downward pressure on prices.
Any way you look at it, there is no good news for oil-dependent states.
It's not strictly a "wrong leaders" problem. It's much more systemic than that. Elect a good leader and the oil will provide the impetus to tear that leader down.
Industry also won't form because of Dutch disease. Who wants to build a factory in Saudi Arabia even if it weren't unstable? Everything just costs too much because of the oil - land, materials, labor.
Sovereign wealth funds also don't really solve the problem because 1) they attract corruption like flies on shit and 2) they're vulnerable to confiscation from foreign governments if they decide they don't like your face (e.g. Venezuelan gold in London).
I suspect it could be that there is no simple solution to this. Potentially you are just fucked if you're a poor unstable country with oil and theres nothing you can really do about it. No leader will save you and no policy will help.
" too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later."
It's much worse than merely 'feasting and fasting' - the problems are very deep, another way of putting it, there was 'not much at all' in these places at all, then they had oil, and the absence of other parts of the economy isn't quite so much an artefact of dysfunction, rather, it never existed in the first place.
Many of these places had 3% literacy 2 generations ago, and much of the civic institutional infrastructure (I mean like 'laws' and 'Judiciary' and 'Governance' etc.) is as new as many of those shiny buildings.
Let alone the absence wide networks of useful artisanal know-how spread from generation to generation, or at least, such information that can be used to found industry.
If Oil permanently crashed, it would be very bad and there would be no recovery. The Gulf States would be the poorest states in the Middle East. Saudi Arabia would be like Yemen or Algeria.
Afghanistan, Iraq/Iran War, Balkans, Chechnya, Afghanistan again, Somalia, Iraq/Syria, Yemen.
KSA’s population has doubled in 30 years and they like to burn through excess youth by exporting them. They’re going to need another, bigger war or domestically they’ll be in trouble.
>Some of the leaders do know that they can't live on oil forever, so you see some sovereign wealth funds investing in things that their people can learn and use to build their society more resiliently
Do the Saudi's have the experience and culture to make this work? $90B invested in Softbank Vision Fund. [0]
In the long run the cost of energy approaches 0 and ultimately heat dissipation and space (and hence, speed) will be more relevant. But short-termism and individual greed have reigned supreme in most energy rich companies. At least Canada has a diverse economy to take up all the petro-refugees, even if we didn't build a serious wealth fund out of our oil as the Norwegians did.
Oil money comes with strings attached and to completely ignore this in your analysis seems either uninformed or disingenuous.
So called Petro Dollars, for example, can't be just spent on anything. It is so difficult to dig up information on this (which was US state secret for a while btw) but iirc KSA must at least spend a portion of "their" Dollars on US treasuries. Another portion of "their" Dollars must go to US arms manufacturers. In return, US backed (formerly UK backed) Saud family gets to play King in Arabia.
So that "leadership that is too busy feating off" is aka Puppets of Western imperial colonials cum American hegemon's vassals. Any efforts by locals to denude themselves of the said "leadership" is not looked upon kindly by the "interantional community".
Well, it's more severe now and as you pointed out yourself, it's becoming increasingly common. Not to mention a shift to renewables (despite some developing countries continuing to rely on oil), which may add increasing pressure.
It feels like this time is different because of the ongoing lack of demand. International flights from the US are looking to basically be nonexistent until there's a vaccine. After that, it's very plausible the business travel economy won't ever recover fully.
I agree that some of the more foresighted countries are making some of the right moves (though Saudi Arabia is probably kicking itself for not moving forward with the Aramco IPO last year), but I really wonder what the effects will be on the political stability of places like Iran and Iraq - they're not in great shape to start with, and this kind of economic shock seems like about the worst possible thing to really exacerbate all the problems that exist already.
"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel"
While I understand the point he's trying to make, I'm not sure I understand how it can be true unless the underlying point is the classical one about how your children will inevitably squander your wealth.
Even if your wealth comes from a business that is only temporarily viable, your wealth will persist even if the underlying business does not, if it's conservatively invested. Additionally, rich people have no problem moving around in the world, so there's no need for the "petro-millionares" to remain in a country that is collapsing economically.
This quote is obviously meant to convey some sort of wisdom from the Emir, but it doesn't ring true. That anyone beyond the grand son of a hyper-rich individual will be back to square one out of sheer inevitability is a laughable idea.
One of the things I've always wondered about when Arab countries run out of oil, and now with cheap oil, will it, at a macro level, result in lower Islamic terrorism or higher?
Argument for Lower : State sponsors, and rich individual sponsors will have fewer funds. There may be local revolutions resulting in more democratic governments.
Higher: There will be instability due to rising poverty with many people turning to radicalization and in many cases terrorism becoming the only way for poor people to support their families.
With all due respect, but this is overly simplistic thinking. You're implying that people in that region are somehow more predisposed to "terrorism" compared to people in other regions, and that due to instability, they will somehow turn to "terrorism" as the defacto way to support their families, putting aside their morals and ethics that prevent them from engaging in those actions to begin with. We've already seen what happened in the US at the slightest hint of instability (all the looting that took place in the past weeks, and in a bizarre manner, some by seemingly well off people as well).
Secondly, it's known that funding also comes from non-Arab countries, who have vested interest to see that region continue to be unstable, to further their own benefits.
It all comes down to how you ask the question. If you ask the question like this instead, the outcome is in my opinion slightly less up for interpretation:
Q: "What happens when a badly governed country, already ripe with corruption and tendencies of sectarianism and local warlords, loses its only real source of income and the economy collapses?"
> There may be local revolutions resulting in more democratic governments.
If we are to entertain this hypothesis, why has this not happened already in the general area? There have been plenty of chances, not only in the Middle East but also in war-torn countries in Africa. The answer in my mind is that armed forces are already concentrated in the hands of the corrupt, and in an environment where surplus is a generation away, power will corrupt the uncorrupted.
When state power collapses, the economy grinds to a halt and the most basic necessities of life can no longer be counted on, in a country that also already has armed para-military groups and tendencies toward sectarianism and warlord leadership, the outcome is predictable: it's civil war, and untold suffering.
It seems like the Middle East is going to get a double whammy from climate change.
1. Their economies will be affected as the world moves to non-oil based energy.
2. Their land will become more uninhabitable as time goes on. Higher temperatures, less water, more sandstorms, etc. I've seen studies that say the Middle East will be completely uninhabitable by the end of the century so we should expect mass migration from there to other places.
They will need money to combat number 2, but they will have less of that because of number 1.
80% of Dubai's food is imported, so can you label it already uninhabitable? Habitable is just a matter of how many resources you're willing to pump into making it so. With the holy sites in the middle east, it will remain populated for long to come.
You're right though, we'll see unprecedented mass migration. What's worse is the middle east has some of the highest birth rates in the world. With that excess population and constrained resources it is inevitable there will be continued conflict.
3. During the cold war most middle-east countries sided with the USA. They were perceived as the allies. Now it's becoming increasingly harder for those countries to enjoy western support.
I thought this article was about the new UAE nuclear reactor. If anything I figured solar would be smarter for a hot sunny region. But dust, heat, and fragile panels (target for attack) may not be a good idea.
At least the UAE started construction when oil prices were high. I can't imagine a Gulf state starting a reactor program now with oil prices so low.
On sorts of pain that have resulted: in 1985, Fahd opened the taps just when Gorbi was trying to reform the soviet economy. Successful reform was presumably made more difficult when one's principal export declines to a third (not helped by concurrent USD weakness) in real value.
I had a roommate from Saudi Arabia who said that their king have realized that a while ago and because they have basically infinite money, he started to develop small cities that have touristic potential, and people are being taught English too. In his words, they want to change this oil stereotype about their country, and that in ten years their country will be transformed.
I question how realistic it is for Saudi Arabia to turn into anything like the "tech hub" or "international finance center" or whatever of the area while simultaneously being an Islamist, conservative theocracy that is in many ways still judicially medieval.
Even if they pull it off, many people will think twice about coming there. Corruption, bigotry and a close-minded view of the world needs to go first.
Look at a country like Singapore: does anyone believe that they would be where they are today if they were an authoritarian regime that executed homosexuals and ordered the murder and dismemberment of dissidents abroad?
One of those English speaking cities is Neom [0]. I think they want to build it into a tech/tourist planned city.
The Mediterranean and South East Asia is littered with these futuristic planned cities. I was anchored off the coast of Malta near this KSA financed "Smart City" [1]
Basic issue is that when a government can fund itself using resource extraction, it does not need the consent of a nation of people who would otherwise make up a tax base, so they pay the army and police out of oil money to keep them in power, and the average citizen is reduced to a subject. Trouble is, if all you need for power is control of the resources, it's not like you need to spend on winning hearts and minds when you can seize the resources with a relatively small rebel group. Given the high stakes of oil/resource billions and the very low bar to entry for cheap rebellions to seize them, these incentives are a recipe for the political shit shows we tend to associate with some resource cursed economies.
The predictable effect of oil price collapse is that leaders can no longer guarantee those payouts to the people who keep them in power, and as a result, those people will replace them with someone who can keep paying them. This is described in the DeMesquita-based idea of the "Rules for Rulers" video (https://youtu.be/rStL7niR7gs), which is related to the article's closing line about leaders getting their peoples consent.
The "Arab World," is a diverse place with a variety of multilateral interests so there are more dimensions to the outcomes than this, but the most obvious risk is that China will prop up whoever they can control in exchange for oil, and the mid-east will become the field for an China/US proxy war. The next risk is that unfortunately, if Arab leaders are reduced to winning hearts and minds to stay in power, they may do it with appeals to religious radicalism instead of democracy, which will bring about another era of state sponsored terrorism, that again, invites war.
Nice that we're using less oil which is good for the planet, but there is the small matter in the interim of what is good for humanity. The people who lose in these conflicts are never the participants, but the ones caught between them. These people will form new waves of refugees from the conflicts that can bring additional instability.
The precise knock-on effects of an oil price collapse can't be predicted, but you can anticipate the change in downstream volatility, and find a way to become indispensable in volatile times.
It’s hard to feel bad for them but there are a lot of outcomes here which result in a lot of people dying. Pretty sure half the reason SA and friends promote violent, reactionary interpretations of Islam is to serve as a dead man’s switch in case of regime change.
Oil is basically what made the middle east a violent and reactionary place.
Natural resources dominating the economy drives conflict and economic clusterfucks in all but the richest, most stable democracies (i.e. everywhere except Norway).
Oil's decline in importance might be the only way to escape this cycle (even if it will probably lead to bloodshed first).
I spent a month in Antibes (next to Cannes) visiting new in-laws. The French Riviera is a playground for the hundreds (thousands?) of saudi princes. I've never seen so many mega yachts, Rolls Royces, and Lambos in one place. To be honest, it was (briefly) kinda cool to see ultra-wealth on display, despite the consequences to millions of poor who suffer for it.
This is an unintended consequence (?) of the US' increase in fracking, starting circa 2005 or so. With oil being so ubiquitous within the (ailing) economy, cheap fuel was a proxy for lowing interest rates; which were already rock bottom.
The benefit then was it hurt Russia, Venezuela, and Iran. The pamademic has taken it a step further. I guess the question is: can the USA bail out SA and associates? Does the US have the political will and the capital to do so? If not, then what?
p.s. Keep in mind the first foreign country the current POTUS visited was SA. It seemed like an odd choice. Maybe not?
I mean, how is this different from any other industry in the world? If you have a set of exports, if someone out competes you and lowers the prices, you suffer. That is why you diversify and build other economies. These petro states made a ton of money, most of the times squeezing desperate countries and selling them oil at above market rates. Should've saved for a rainy day, because sooner or later, other countries are going to figure a way out to cut you off.
Incidentally, this situation ended up being the nail in the coffin for the Soviet Union. The Soviets had been forced to import a lot of grain in the eighties and they were paying for it with oil exports, since that was really the only export that the west was interested in buying from the Soviets.
When oil crashed in the mid eighties, the Soviets were forced to look for hard currency loans from the west to keep up food imports. These loans were then tacitly conditioned on the Soviets behaving themselves in Eastern Europe. When the Solidarity protests started up in Poland and the Monday demonstrations started in East Germany, the normal Soviet response (as in 1956 and 1968) to roll tanks was not an option, because it would have meant no more loans, no more grain, and the starvation of the Soviet population.
Who was making the loans to the Soviets specifically? For all the hard rhetoric of the 80s, it's quite interesting that the West was willing to prop up a (Communist!!!) entity for a fee.
Some of these countries has so much time to prepare for the future, while others were busy being railed by theocracies propped up by foreign influences in order to keep exploiting them for their oil. The later are being dropped like hot potatoes by their foreign influences and the former have taken action way, way, waaay too late.
The shallow pro market idealism that too often colors the Economist's analysis is hard to swallow. Give me the confidence to pronounce: 'If Arab rulers want citizens to pay their way, they will need to start earning their consent' in a complex and unstable region. As thou they can see the consequences of complex change. The ghosts of the dead in Libya, Syria and Egypt (remember that brief flame of democracy) should be a constant presence in the author's mind.
Not exactly sure your critique (maybe I'm misunderstanding?). The gist I get from the article is that many Arab states have dependend on oil to stablize their economies/internal politics and fund their way of life, and that while some of these states had plans to diversify the current cheap oil makes the execution of that plan more complicated. In addition (something I learned from this article) the economies in the region are connected in ways which may make possibile instability amplified due to migrant workers/tourism.
The quote you picked out might not be a great take, but I think it's referring to the potential large (and growing) gap between the ruling class and normal citizens which could seed dissent.
Eh, what do expect from the Economist? They write as if they just read something about the topic and now after 2 paragraphs came to the conclusion on how the world should be updated. That's their style.
[+] [-] wiremine|5 years ago|reply
https://news.ycombinator.com/item?id=23869858
[+] [-] supernova87a|5 years ago|reply
These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have little industry to fall back on and wait for the next rise (or foment civil unrest).
Some of the leaders do know that they can't live on oil forever, so you see some sovereign wealth funds investing in things that their people can learn and use to build their society more resiliently. But in general the improvements are not very deep -- the money comes too easily and people get used to state intervention and not having to work.
It's a problem.
[+] [-] ogre_codes|5 years ago|reply
The point here is that sub $40 oil is becoming the new norm. While these countries can weather a 2-3 year drop in oil prices, those short term drops are more and more frequent and the bottom keeps getting lower.
Between electrification of transportation and reduced travel which may last for another 6 months (or much longer, it's not really clear), demand is down. On top of that, any time oil stays over $50/ barrel for a prolonged period of time, shale oil and oil sands production increases putting downward pressure on prices.
Any way you look at it, there is no good news for oil-dependent states.
[+] [-] pydry|5 years ago|reply
Industry also won't form because of Dutch disease. Who wants to build a factory in Saudi Arabia even if it weren't unstable? Everything just costs too much because of the oil - land, materials, labor.
Sovereign wealth funds also don't really solve the problem because 1) they attract corruption like flies on shit and 2) they're vulnerable to confiscation from foreign governments if they decide they don't like your face (e.g. Venezuelan gold in London).
I suspect it could be that there is no simple solution to this. Potentially you are just fucked if you're a poor unstable country with oil and theres nothing you can really do about it. No leader will save you and no policy will help.
[+] [-] jariel|5 years ago|reply
It's much worse than merely 'feasting and fasting' - the problems are very deep, another way of putting it, there was 'not much at all' in these places at all, then they had oil, and the absence of other parts of the economy isn't quite so much an artefact of dysfunction, rather, it never existed in the first place.
Many of these places had 3% literacy 2 generations ago, and much of the civic institutional infrastructure (I mean like 'laws' and 'Judiciary' and 'Governance' etc.) is as new as many of those shiny buildings.
Let alone the absence wide networks of useful artisanal know-how spread from generation to generation, or at least, such information that can be used to found industry.
If Oil permanently crashed, it would be very bad and there would be no recovery. The Gulf States would be the poorest states in the Middle East. Saudi Arabia would be like Yemen or Algeria.
[+] [-] hindsightbias|5 years ago|reply
Afghanistan, Iraq/Iran War, Balkans, Chechnya, Afghanistan again, Somalia, Iraq/Syria, Yemen.
KSA’s population has doubled in 30 years and they like to burn through excess youth by exporting them. They’re going to need another, bigger war or domestically they’ll be in trouble.
[+] [-] nickfromseattle|5 years ago|reply
Do the Saudi's have the experience and culture to make this work? $90B invested in Softbank Vision Fund. [0]
[0] https://www.businessinsider.com/saudi-arabia-45-billion-with...
[+] [-] 3pt14159|5 years ago|reply
[+] [-] eternalban|5 years ago|reply
So called Petro Dollars, for example, can't be just spent on anything. It is so difficult to dig up information on this (which was US state secret for a while btw) but iirc KSA must at least spend a portion of "their" Dollars on US treasuries. Another portion of "their" Dollars must go to US arms manufacturers. In return, US backed (formerly UK backed) Saud family gets to play King in Arabia.
So that "leadership that is too busy feating off" is aka Puppets of Western imperial colonials cum American hegemon's vassals. Any efforts by locals to denude themselves of the said "leadership" is not looked upon kindly by the "interantional community".
> the oil handout
That's cute!
[+] [-] leoh|5 years ago|reply
[+] [-] ksk|5 years ago|reply
[+] [-] awillen|5 years ago|reply
I agree that some of the more foresighted countries are making some of the right moves (though Saudi Arabia is probably kicking itself for not moving forward with the Aramco IPO last year), but I really wonder what the effects will be on the political stability of places like Iran and Iraq - they're not in great shape to start with, and this kind of economic shock seems like about the worst possible thing to really exacerbate all the problems that exist already.
[+] [-] tomcooks|5 years ago|reply
Rashid bin Saeed Al Maktoum, Emir of Dubai
[+] [-] hnarn|5 years ago|reply
Even if your wealth comes from a business that is only temporarily viable, your wealth will persist even if the underlying business does not, if it's conservatively invested. Additionally, rich people have no problem moving around in the world, so there's no need for the "petro-millionares" to remain in a country that is collapsing economically.
This quote is obviously meant to convey some sort of wisdom from the Emir, but it doesn't ring true. That anyone beyond the grand son of a hyper-rich individual will be back to square one out of sheer inevitability is a laughable idea.
[+] [-] yumraj|5 years ago|reply
Argument for Lower : State sponsors, and rich individual sponsors will have fewer funds. There may be local revolutions resulting in more democratic governments.
Higher: There will be instability due to rising poverty with many people turning to radicalization and in many cases terrorism becoming the only way for poor people to support their families.
[+] [-] apta|5 years ago|reply
Secondly, it's known that funding also comes from non-Arab countries, who have vested interest to see that region continue to be unstable, to further their own benefits.
[+] [-] hnarn|5 years ago|reply
Q: "What happens when a badly governed country, already ripe with corruption and tendencies of sectarianism and local warlords, loses its only real source of income and the economy collapses?"
> There may be local revolutions resulting in more democratic governments.
If we are to entertain this hypothesis, why has this not happened already in the general area? There have been plenty of chances, not only in the Middle East but also in war-torn countries in Africa. The answer in my mind is that armed forces are already concentrated in the hands of the corrupt, and in an environment where surplus is a generation away, power will corrupt the uncorrupted.
When state power collapses, the economy grinds to a halt and the most basic necessities of life can no longer be counted on, in a country that also already has armed para-military groups and tendencies toward sectarianism and warlord leadership, the outcome is predictable: it's civil war, and untold suffering.
[+] [-] slim|5 years ago|reply
[+] [-] irrational|5 years ago|reply
1. Their economies will be affected as the world moves to non-oil based energy.
2. Their land will become more uninhabitable as time goes on. Higher temperatures, less water, more sandstorms, etc. I've seen studies that say the Middle East will be completely uninhabitable by the end of the century so we should expect mass migration from there to other places.
They will need money to combat number 2, but they will have less of that because of number 1.
[+] [-] grayfaced|5 years ago|reply
You're right though, we'll see unprecedented mass migration. What's worse is the middle east has some of the highest birth rates in the world. With that excess population and constrained resources it is inevitable there will be continued conflict.
[+] [-] diminish|5 years ago|reply
[+] [-] dghughes|5 years ago|reply
At least the UAE started construction when oil prices were high. I can't imagine a Gulf state starting a reactor program now with oil prices so low.
https://www.aljazeera.com/ajimpact/nuclear-gulf-experts-soun...
https://en.wikipedia.org/wiki/Barakah_nuclear_power_plant
[+] [-] manfredo|5 years ago|reply
[+] [-] 082349872349872|5 years ago|reply
https://en.wikipedia.org/wiki/1980s_oil_glut
[+] [-] tijuco2|5 years ago|reply
[+] [-] hnarn|5 years ago|reply
Even if they pull it off, many people will think twice about coming there. Corruption, bigotry and a close-minded view of the world needs to go first.
Look at a country like Singapore: does anyone believe that they would be where they are today if they were an authoritarian regime that executed homosexuals and ordered the murder and dismemberment of dissidents abroad?
[+] [-] yardie|5 years ago|reply
The Mediterranean and South East Asia is littered with these futuristic planned cities. I was anchored off the coast of Malta near this KSA financed "Smart City" [1]
[0] https://www.businessinsider.com/neom-what-we-know-saudi-arab... [1] http://smartcitymalta.com.mt
[+] [-] quickthrowman|5 years ago|reply
[+] [-] bartmika|5 years ago|reply
[+] [-] Magodo|5 years ago|reply
[+] [-] motohagiography|5 years ago|reply
Basic issue is that when a government can fund itself using resource extraction, it does not need the consent of a nation of people who would otherwise make up a tax base, so they pay the army and police out of oil money to keep them in power, and the average citizen is reduced to a subject. Trouble is, if all you need for power is control of the resources, it's not like you need to spend on winning hearts and minds when you can seize the resources with a relatively small rebel group. Given the high stakes of oil/resource billions and the very low bar to entry for cheap rebellions to seize them, these incentives are a recipe for the political shit shows we tend to associate with some resource cursed economies.
The predictable effect of oil price collapse is that leaders can no longer guarantee those payouts to the people who keep them in power, and as a result, those people will replace them with someone who can keep paying them. This is described in the DeMesquita-based idea of the "Rules for Rulers" video (https://youtu.be/rStL7niR7gs), which is related to the article's closing line about leaders getting their peoples consent.
The "Arab World," is a diverse place with a variety of multilateral interests so there are more dimensions to the outcomes than this, but the most obvious risk is that China will prop up whoever they can control in exchange for oil, and the mid-east will become the field for an China/US proxy war. The next risk is that unfortunately, if Arab leaders are reduced to winning hearts and minds to stay in power, they may do it with appeals to religious radicalism instead of democracy, which will bring about another era of state sponsored terrorism, that again, invites war.
Nice that we're using less oil which is good for the planet, but there is the small matter in the interim of what is good for humanity. The people who lose in these conflicts are never the participants, but the ones caught between them. These people will form new waves of refugees from the conflicts that can bring additional instability.
The precise knock-on effects of an oil price collapse can't be predicted, but you can anticipate the change in downstream volatility, and find a way to become indispensable in volatile times.
[+] [-] bluGill|5 years ago|reply
[+] [-] opportune|5 years ago|reply
[+] [-] pydry|5 years ago|reply
Natural resources dominating the economy drives conflict and economic clusterfucks in all but the richest, most stable democracies (i.e. everywhere except Norway).
Oil's decline in importance might be the only way to escape this cycle (even if it will probably lead to bloodshed first).
[+] [-] frankbreetz|5 years ago|reply
[+] [-] cs02rm0|5 years ago|reply
Is that a common abbreviation for Saudi? We used to use KSA when I lived there, but I don't trust South Africans not to be violent either. ;)
[+] [-] staycoolboy|5 years ago|reply
[+] [-] chiefalchemist|5 years ago|reply
The benefit then was it hurt Russia, Venezuela, and Iran. The pamademic has taken it a step further. I guess the question is: can the USA bail out SA and associates? Does the US have the political will and the capital to do so? If not, then what?
p.s. Keep in mind the first foreign country the current POTUS visited was SA. It seemed like an odd choice. Maybe not?
[+] [-] darth_avocado|5 years ago|reply
[+] [-] lizknope|5 years ago|reply
https://en.wikipedia.org/wiki/Economy_of_Dubai
Oil production, which once accounted for 50 percent of Dubai's gross domestic product, contributes less than 1 percent to GDP today.
[+] [-] diminish|5 years ago|reply
[+] [-] cameldrv|5 years ago|reply
When oil crashed in the mid eighties, the Soviets were forced to look for hard currency loans from the west to keep up food imports. These loans were then tacitly conditioned on the Soviets behaving themselves in Eastern Europe. When the Solidarity protests started up in Poland and the Monday demonstrations started in East Germany, the normal Soviet response (as in 1956 and 1968) to roll tanks was not an option, because it would have meant no more loans, no more grain, and the starvation of the Soviet population.
[+] [-] sushshshsh|5 years ago|reply
[+] [-] LockAndLol|5 years ago|reply
[+] [-] LukeEF|5 years ago|reply
[+] [-] colincooke|5 years ago|reply
The quote you picked out might not be a great take, but I think it's referring to the potential large (and growing) gap between the ruling class and normal citizens which could seed dissent.
[+] [-] supernova87a|5 years ago|reply
[+] [-] neonate|5 years ago|reply
[+] [-] staycoolboy|5 years ago|reply
https://www.cnbc.com/2018/03/27/softbank-and-saudi-arabia-an...
[+] [-] BurningFrog|5 years ago|reply
If that unearned funding source dies out, I think it can only be good for human freedom and, at least longer term, peace.