Tuesday, September 29, 2015

Saudi Collapse?

I just read an extremely interesting article about a potential decline of Saudi Arabia into a condition not much better than that of Iraq, Syria or Libya.  I guess I always assumed that the Saudis' oil wealth would protect them from that, but maybe I was very wrong.

I'm not going to try to summarize the article here; I'm not even going to claim that I know enough to say how much credence to give to it.  But I do think it's an important read, and I encourage you to take a look at it.  All we need is for Saudi Arabia to sink into chaos, so even the thought is enough to keep me up at night.  I'd be most interesting to hear any opinions about this article.


Zog said...


During the 1970s, the richest country in the world on a per-capita basis was Nauru, due to its phosphate resources. However, the phosphates ran out, and the management of the phosphate money was terrible. The current unemployment rate there is now about 90%, and the major source of revenue is foreign aid.

Nauru cannot attract tourists, as very few people want to go to the middle of the Pacific to see a rock-strewn wasteland (most of the interior has been reduced to bare rock due to the phosphate mining). With the exception of the phosphates, it had no real natural resources, and was incapable of providing sufficient food and water for its inhabitants. The cost of providing enough of it from overseas is extremely high.

The government of Nauru was highly unstable after the phosphates ran out -- from 1989 to 2003, there were 17 different ruling coalitions. There were only two votes of non-confidence in the past decade, however (although it must be remembered that the term of Parliament is just three years, rather than 5, as is the case in the UK and Canada).

So, yes, things can go very bad once the natural resources run out.

NOTE: In 2009, Nauru received enough money from Russia to pay for 2.5 years of imports in return for recognizing Abkhazia as an independent nation. Since Nauru has fewer than 10,000 residents, this was essentially a drop in the bucket as far as Russia was concerned -- Russia spent over 1000 times as much for the Sochi Olympics as it did to get Nauru to recognize the breakaway republic. This method of gaining money is not open to larger countries.

Infidel753 said...

I don't know as much about Saudi Arabia as about some of the other Middle Eastern countries, but it has always struck me as very much a house of cards. If it weren't being propped up and implicitly protected against outside aggression by the US, it would probably have already become much more unstable, if not actually dismembered by rival neighbor states.

In addition to the problem of declining oil revenues (which, remember, mean an even faster drop in per-capita income since the population is still growing), Saudi Arabia faces a fundamental contradiction -- it's one of the most barbarically theocratic regimes on Earth, while at the same time wealthy and aspiring to a veneer of modernity. Wealth means an educated population with internet access and the ability to travel to the West and see Western culture up close -- which undermines the stultifying Islamic monoculture he regime continues to impose.

Another factor to consider is sectarianism. Saudi Arabia's oil is concentrated in the area along the Persian Gulf coast -- close to Iran. The population in that area is largely Shiite, whereas the Saudi regime and the majority of the Saudi population are Sunni. Shiites in Saudi Arabia are very much treated as second-class citizens. Iran is solidly Shiite and represents itself as the primary Shiite power and defender of Shiites elsewhere (this is part of the reason for its intervention in Iraq against fanatically anti-Shiite ISIS). So long as Saudi Arabia is under the wing of the US, it need not fear Iran. But if there were ever a real breach between Saudi Arabia and the US, the subjugation of Shiites in the Gulf coast area of Saudi Arabia would furnish a ready pretext for Iranian interference in that region where most of the kingdom's oil is. Saudi Arabia's military, totally dependent on US technology and expertise, would be no match on its own for Iran.

The article strengthens my view that Saudi Arabia's fa├žade of stability is as brittle as that of the USSR was. When the collapse finally comes, it will be a shock at first, but soon thereafter everyone will wonder why they didn't expect it all along.

Screech said...

I'm far from being a Saudi expert either but it just seems logical that as fossel fuels decline in demand throughout the world so too would the middle east oil barrons. Imagine if the west had no need for middle east oil imports. I suppose their little war spats would still be of some concern but without the oil equation the concern would be far less impacful than it used to be. Can I not dream?

Magpie said...

I’m tempted to say I’d sleep easier, actually, GE.

They’re about to behead and possibly crucify a young man for being part of pro-democracy activism when he was 17.
That is emblematic of what this regime is.

I doubt that goes some way into proving they’re worried about stability because I think it just amounts to them having a savage vile judiciary and no regard for human life.

I’ve read the article and I can’t come up with an economic counter but I’ll believe it when I see it, because a lot of vile states have lasted a very long time with very much fewer advantages.