In-Depth Look at Saudi Reforms

Reuters just published this in-depth story on Saudi Arabia. Interesting read, I thought. It would be nice if those of you who have direct experience share your thoughts.

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Sometimes living in the Magic Kingdom is like the "X-Files". The truth is out there. But you will never find it. I was friends with investigators in loss control, and at one time knew the fundamental issue with the crane incident. Like most major accidents, a lot more than one thing was out of sorts.

Many companies in the Kingdom went into a cash flow crises when the government quite paying it's bills when oil prices dropped. The easiest way to solve a cash flow crises is quite paying the bills, and the trickle down effect was horrendous for some. This especially effected non-revenue government projects, not places like Aramco. The overwhelming majority of the private sector workforce is expat, so not paying the workers didn't cause widespread unrest. The country needs to transition to doing most of the work themselves, but that is going poorly. And in some sectors, business are just closing down. Many of the smaller companies were really owned and operated by expats, with a Saudi ownership in name, really just taking a cut. It can't transition to a Saudi workforce for a variety of reasons.

Hundreds of thousands of expat workers were stiffed in the time frame of the article, not paid, and unable to leave the country and go home unless they wave restitution, and it was a mess, and probably still is to some degree. 

MBS absolutely deserves credit for the normalization, allowing women drivers, movie theaters, and knocking the Ministry of Virtue and Vice down a few pegs. Other than that, I'm not sure that much as changed. The promotions and reorganizations where I was do not suggest they are now embracing competent technocrats, but rather masters of whasta. And make no mistake, there are many very capable Saudis. I would have bet my 401K the IPO couldn't happen. It's becoming a harder place for expats. I enjoyed my time. And I loved visiting the various parts of the country and almost always was warmly received. My wife absolutely loved her time there. But it is seriously dysfunctional. Aramco runs well enough, but floating the entire Kingdom will fail on day as the population continues to expand.

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