Aramco is the world’s largest oil producer, and heir apparent Prince Mohammed Bin Salman, or MBS, the man leading the reform drive, was confident it was worth $2 trillion, twice Apple’s valuation. The IPO would be the biggest in history and the world’s leading stock exchanges were competing for the privilege of the listing. [...]
But MBS has two problems. The short-term one is that he is trying to finance this transition at a time when oil prices are low, which has left the country’s running huge budget deficits (this year something like 7% of GDP). The Aramco IPO was supposed to help pay some of Vision 2030’s bills. Running deficits would be okay as an investment in the future if Vision 2030 was going to work, but the odds are stacked against it. [...]
Yes, MBS is letting women drive for the first time and has made some other gentle social reforms. But the modus operandi is that of the ruler bestowing gifts on his people, who'd better be grateful, rather than a process where Saudi society decides through an open process of debate. [...]
The World Economic Forum’s Human Capital Report ranks Saudi Arabia 87th in the world, a notch behind Egypt, which isn’t exactly Silicon Nile Valley. It’s not that the kingdom wants for money to educate its population, but Saudis have gotten too used to the idea that real work is performed by expatriates. The idea that they will be leading and founding innovative, transformative business is hard to imagine.
No comments:
Post a Comment