WASHINGTON, D.C. -- The Saudi government having squandered its oil wealth is considering selling off its source.
"When Saudi Arabia's ailing King Fahd went on holiday to Spain in July," writes David Hirst of Britain's Guardian Weekly, "eight aircraft, including five Boeing 747s and a giant Antonov cargo plane, bore him to Malaga from the royal terminal at Jeddah. With him went more than 400 retainers, ministers, 200 tonnes of luggage, 25 Rolls-Royces and limousines." Mr. Hirst gives details:
The king's favorite son, Abdul Aziz, has a $2.7 billion home. Royal retreats line the north coast of Jeddah mile after mile. The king has a peninsula for himself.
The 20,000 princes and princesses get a monthly stipend of $4,000 to $128,000. The monthly "expenses" of Prince Sultan may be as much as $20 million. Some estimate that 40 percent of national revenues flow to the royal family.
But the average Saudi hasn't done as well as the royals.
Per capita income has plunged from $15,700 in 1980, to $5700 today. While
Saudi Arabia employs 6 million foreigners, 27 percent of Saudi males, and 95
percent of Saudi females are unemployed.
In 1982 Saudi Arabia had reserves of $170 billion. Today the national debt is almost that amount, and about 12 percent of the budget goes to servicing this debt.
Now it appears that Saudi Arabia is considering selling
off its source of income by permitting
foreign investment in exploration and production. It's as if unable to live off
selling eggs, Saudi Arabia is considering selling the
A Stratfor analyst writes, "Foreign oil investment in Saudi Arabia is nothing new. The kingdom nationalized its oil industry 20 years ago and has periodically turned to foreign investments to compensate for its lack of funds and expertise. However, the country had never allowed foreign investment in the upstream oil sector. Upstream refers to exploration and production, while downstream includes refining and distribution."
Foreign oil companies prefer the exploration and production deals. U.S. oil firms Arco, Chevron, Conoco, Exxon, Mobil, Phillips Petroleum and Texaco have all submitted proposals to Saudi Arabia. Foreign companies including France's Elf Aquitaine and Total, Royal Dutch-Shell and Italy's ENI group have also expressed interest.
Says the Stratfor analyst, "Saudi Arabia first hinted at bringing in foreign upstream investment in September 1998 during a secret meeting attended by Crown Prince Abdullah, former President George Bush and CEOs from seven major oil companies." This October 16, U.S. Commerce Secretary William Daley called for Saudi Arabia to remove obstacles to foreign investment.
Permitting foreign investment in exploration and production raises the possibility that one day Saudi Arabia itself may be buying oil from a foreign company.
For the long term this is not likely to improve the condition of the average Saudi who has little voice in the affairs of government. Reducing the royal family's spending, unnecessary arms purchases and dependence on foreign workers, coupled with increasing job opportunities for Saudis may set Saudi Arabia on the road to economic recovery.
[For details read Said K. Aburish, The Rise, Corruption, and Coming Fall of the House of Saud]
[Previously unseen photographs reveal how religious zealots obsessed with
idolatory have colluded with developers to destroy Islam's diverse
heritage.--Daniel Howden, "Shame
of the House of Saud: Shadows over Mecca," Independent, April 19,
[HRW estimated that more than 9,000 had been held since al Qaeda launched a
campaign in 2003, of whom probably between 2,000 and 4,000 were still
detained, said Christoph Wilcke, the author of the report.
Few were ever charged or had access to lawyers, even if Saudi laws limit
detention without trial to six months, with the intelligence agency ignoring
court rulings ordering a release in some cases, HRW said, citing families of
detainees or activists.--Chris Adams, "Saudi
Arabia arrested thousands without trial - HRW," Christian
Science Monitor, August 10, 2009]
Jerome Taylor, "Medina: Saudis take a
bulldozer to Islam's history," independent.co.uk, October 26, 2012
Damian Thompson, "The
Saudis are bulldozing Islam's heritage. Why the silence from the Muslim
world?," independent.co.uk, November 2, 2012