Maverick's World

Saudi Austerity Measures...

So the Grand Mufti of the Saudi Kingdom has declared overt support for King Salman's austerity measures [1]. As always I welcome a rational spending shift in the Saudi royal family. I don't know if this has anything to do with the suggestion from countries like India.

Countries like India had suggested that either KSA could pay its foreign guest workers or their parent nations could compensate them out of funds owed to KSA for oil purchases. From the perspective of a nation like India - this advantageous as the payments can be in local currency - which avoids the fees incurred in the whole loop through Riyadh.

I have often wondered what the Saudis do with all this foreign labor. So much effort is expended on putting up palaces where a grand total of two people live. The palaces have large gardens and air conditioned dining halls and massive garages for BMWs and Benz cars but the things are basically completely useless. It is wasteful to even have people work as servants in these palaces because no one lives there.

I have long suggested that instead of building useless palaces, they build large green houses which can be used to reduce Saudi dependence on imported food products. If the Saudis put their minds to it, I am sure that they could reproduce the miracle of Almeria [2]. This kind of miracle would substantial undermine Osama Bin Laden's primary criticisms of the Saudi  monarchy's handling of the economy.

On a perhaps related note, I see there is a new deal at OPEC [3]. I am again hopeful that this helps reduce the problems that the unreasonably low oil prices created in the world.

There is a way forward for Saudi Arabia - a way that does not lead to endless conflict with states like Iran and eternal discomfort for their allies in the world.

It would be nice if the Saudis started down that path instead of clinging to gold plated toilets and extravagant spending in Europe and America.

posted by maverick @ 7:29 AM