Saudi Arabia could be bankrupt by 2020 – IMF

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…by Russia Today, Moscow

[ Editor’s Note: When you read this gloomy report on Saudi Arabia, keep in mind the trick of choice for countries facing an unfixable economic situation is creating a war to assume special powers to be able to hammer down the expected domestic backlash.

But in Saudi Arabia’s case with its being a autocracy, it already has that power. So the question to be asked is “what are they worried about?” Do the Saudis fear using that power on a broad scale might trigger a new internal opposition emerging among the powerful Sunni business clans that don’t want to go down with the ship?

Most of them have huge amounts of their wealth offshore anyway, and frankly could live very well if Saudi Arabia disappeared as a country tomorrow, something that might even trigger a roar of approval heard around the world saying goodbye to the slave labor state.

The thrill of this could only be exceeded if the same happened to Israel on the same day, and I mean if it turned into a real country with equal rights for all its people, and with its nuclear weapons secured under an international supervision.

And then we have to ask, what was Crown Prince bin Salman’s economic basis for creating a paper $110-billion weapons order with the US when, despite Iran increasing its military power, Iran has had to be focused on defense and retaliation due to the NATO forces arrayed against it. Iran is not a offensive regional threat, due to its lack of force projection logistics capacity.

I will close with the anomaly not covered in the story. Russia should be in the same boat as Saudi Arabia with the lower oil prices. But the difference is that its budget is based on oil prices of $50 per barrel, so it is looking at big surplus which appears to have been spent buying gold all year and selling US bonds.

Russia will end up with a surplus that will go into its reserve fund for a rainy day, something you don’t find many others doing. A country really planning major aggression would be spending all of its budget and then deficit funding those preparations, like the US is doing for exampleJim W. Dean ]

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– First published … October 28, 2018

The Middle East’s biggest economy, Saudi Arabia may run out of financial assets within the next five years if the government maintains its current policies, warns the International Monetary Fund.

Saudi Arabia is expected to run a budget deficit of 21.6 percent in 2015 and 19.4 percent in 2016, according the IMF’s latest regional economic outlook.

The country needs to adjust spending, the IMF urged.


The IMF outlined two key factors shaping the region’s outlook. They are spreading and deepening regional conflicts and slumping oil prices.

The conflicts have given rise to large numbers of displaced people and refugees, on a scale not seen since the early 1990s, according to the report.

“Achieving fiscal sustainability over the medium-term will be especially challenging given the need to create jobs for the more than 10 million people anticipated to be looking for work by 2020 in the region’s oil exporting countries,” IMF Middle East and Central Asia Department Director Masood Ahmed told journalists after the report’s unveiling in Dubai.

According to the research, many experts suggest low oil prices will remain in place for the foreseeable future.

“For the region’s oil exporters, the fall in prices has led to large fall in revenue, amounting to a staggering $360 billion this year alone,” Masood Ahmed said.

OPEC members Saudi Arabia, Iran, Iraq, Kuwait, Qatar, UAE, Algeria and Libya have all seen their revenues drop sharply as a result of a decline in oil prices.

Saudi Arabia is currently facing a budget deficit for the first time since 2009. The crude price decline has strongly influenced the kingdom’s economy since oil sales account for about 80 percent of its revenues. It has prompted the government to cut spending, delay projects and sell bonds.

The country’s net foreign assets fell by about $82 billion from January to August. The government sold state bonds worth $15 billion (55 billion riyals) this year.

View image on Twitter

“There have been a number of one-off spending proposals this year that have taken place, and those initiatives have added to the spending needs,” Masood Ahmed said.

The budget deficit caused project layoffs in Saudi Arabia. Companies working on infrastructure projects haven’t been paid for six months or more. Payment delays increased lately as the government wants to cut prices on contracts in order to preserve cash.

Despite the perpetual appeals to reduce output and support crude prices, OPEC has been refusing to do so as the cartel is trying to maintain its market share. However, last month the cartel signaled a possible change of stance, saying it might cut output and is ready to talk to other (non-OPEC) producers. But experts say OPEC’s statements are not important without a change of policy by its biggest crude producer Saudi Arabia.

10 COMMENTS

  1. Maybe it is worth while to remember why the ME has gone up in flames in the first place with the so called international self proclaimed sheriffs of Zionist justice “establishing peace in war torn countries after the clean out and pillaging of various declared “rogue states” and “regimes”.
    Before SA is going to be bankrupt it will disappear together with its riches into our worlds invisible vacuum cleaner that sucks the world dry and its peasants into the inferno. It will happen very quickly now!
    The “royal” Saudi Arabian falcons will once again soar free without possessing any nationality or nobles. May mankind follow their example and discard the mask compromising sight, the bells that sound their presence and the chains that are attached to their masters and the falcons freedom and become again what they once were many, many seasons ago. May Horus protect us on our thorny way through the maze of a self created hell.

    • Adrian2Mil18

      You are Correct , its 110,000,000,000 NOW according to the Dominant American Defination , it used to be 110,000,000,000,000 according to the British Defination ( a million Million was Billion but was way too large a number to be used )

    • Oh, snap . . . good question Adrian2Mil18.

      Well, the hedge funds would like a default very much. The Kosher Nostra just sent MyNewChin to the House of Sand and Fraud last week. The “Foreclosure King” as he is dutifully monikered by his peers, and fellow blood-suckers, just set that sting up.
      As I’ve been saying, Saudi painted themselves into a corner.

    • M.O.A.Bitches, when the saudi economy colapse and they can’t pay Trump’s weapons sales, maybe the US Treasure go to rescue from his unpayable debts (again) but this time to Raytheon, Lockheed and other ‘too big to fail’ and who finished paying the saudi bankrupt is you…

  2. Jim, when you speak of Russia’s spendthrift attitude you are very close to the real reason for all of the hate against Russia. It’s always the countries which try to operate outside of the sphere of the Central Bgangsters. This was Gadhafi’s crime, Hussein’s crime, Hugo Chaves’s crime, JFK’s crime, Lincoln’s crime, heck we can go as far back in time as you want even so far as to make the case that Jesus’ capital crime was when he tossed the rats from the temple. Jesus could have live a long life happily multiplying fishes, creating miracle after miracle, curing blind men and raising all the dead he wanted too, but touch a banker, and as my Grandfather used to say; Beata Maria, sei finito , morto.

    • Amen, Russia was upgrading its military while fighting sanctions and replacing imported goods with domestically produced, and they have footed the bill for their Syria assistance. Fortunately it does not have a 700 foreign base structure that sucks tons of money away from more productive things.

  3. The way I see it Mr Dean , Since Saudi Arabia Payed for the Iraq Wars so Their ” Savings ” are Already Finished …….. America grossly over charged the Saudi’s for the War Against Saddam Because they faked Intelligence that showed Saddam Amassing Troops next to the Saudi Border and scared the Saudis into Paying for the Whole operation in which ALL Old Ordinance was sold at exorbitant prices which emptied the Saudi coffers and since then they’re Selling to Survive Only …….. Way long ago Saudis used to have loads of Money but Not since the Iraq War or the Kuwait Invasion ……… My humble opinion …….