
Young Saudis See Cushy Jobs Vanish Along with Nation’s Oil Wealth - el_benhameen
http://www.nytimes.com/2016/02/17/world/middleeast/young-saudis-see-cushy-jobs-vanish-along-with-nations-oil-wealth.html
======
dexwiz
Even without oil prices dropping, Saudi Arabia's days are numbered. No one
knows exactly how much oil they have left, but they have been pumping seawater
into the ground for years now. This doesn't signal that their oil is drying it
up, but it is less plentiful than before. Any country that relies on natural
resources for its wealth will suffer when those resources dry up and are not
replaced with some form of productions. When was the last time you bought
something made in Saudi Arabia?

The USA made Saudi Arabia via Ibn Saud, and it will unmake it via Iran. The
sanctions were lifted on Iran, because the USA saw the writing on the wall
years ago about Saudi Arabia drying up. It needs to reposition itself as an
ally of the next major middle eastern oil producer. Not only does Iran have
oil, but it has some of the largest natural gas deposits in the world. [1]
After years of conflict, and a proxy war in Yemen, Iran is likely to do
anything to ruin Saudi Arabian. This means any power over production that
Saudi Arabia used to wield via OPEC will be nullified once Iran is developed
by Big Oil.

Its an end of an era. The war in Yemen keeps aggression pointed outward, but
as soon as the populace tires and the payoffs stop coming it will turn inward.
Another government will be recast as tyrants and despots, and the world will
watch it fall.

[1]
[https://en.wikipedia.org/wiki/List_of_natural_gas_fields](https://en.wikipedia.org/wiki/List_of_natural_gas_fields)

~~~
GabrielF00
I don't think the US "made" Saudi Arabia. My recollection is that the Saud
family defeated their local rivals and established the Saudi state in the 20s
and 30s, and that American political involvement with Saudi Arabia really only
began towards the end of WW2.

~~~
jqm
It was the British who backed the Saud family initially. Towards the end of
the Ottoman empire. They gave the Sauds advisers and military support.

~~~
dogma1138
No the British backed the Hashemites (the plot of Laurence of Arabia;)) the
territory was split between the 5 sons of Hussein ibn Ali of which only Jordan
currently remains Saudi Arabia, Iraq, Syria and a few other regions that do
not exist today were lost to secterial conflict.

[https://en.m.wikipedia.org/wiki/Hashemites](https://en.m.wikipedia.org/wiki/Hashemites)

~~~
jqm
? It's an easily checked fact.

[https://en.wikipedia.org/wiki/Ibn_Saud](https://en.wikipedia.org/wiki/Ibn_Saud)

Excerpt: "After World War I, he received further support from the British,
including a glut of surplus munitions. He launched his campaign against the Al
Rashidi in 1920; by 1922 they had been all but destroyed."

~~~
dogma1138
"Sharif Hussein bin Ali rebelled against the rule of the Ottomans during the
Arab Revolt of 1916.[4] Between 1917 and 1924, after the collapse of Ottoman
power, Hussein bin Ali ruled an independent Hejaz, of which he proclaimed
himself king, with the tacit support of the British Foreign Office. "

Looks like the Brits love supporting everyone ;)

~~~
jqm
Yep. Pretty much anyone not Ottoman.

------
Bluestrike2
Economically and socially, Saudi Arabia is a mess. And it's not going to get
better in the long run, even if oil prices rebound and they feel some degree
of a respite. Technology is changing, and oil isn't going to be sufficient for
the Saudis to keep the lid on things domestically.

When most countries industrialize, they go through significant social and
economic changes. Saudi Arabia got to skip a lot of those changes, and the end
result is that they're ill-prepared for when their reserves have dried up.
Their non-oil sectors are practically non-existent, with very little non-petro
industry in the country at all. They've got huge social stratification
problems, and they have to deal with religious opposition to modernization and
diversification (for fear of westernization). They've spent the 37 years since
the Grand Mosque seizure radically empowering the extreme religious
conservatives and bankrolling Wahhabi expansion overseas. It helped them avoid
additional internal conflict by exporting their problem children, but when the
money dries up, the devil's bargain is going to come to an end with it.

The reforms the Saudis need to make are too great, and they'd disrupt too many
aspects of their economy at once. And that's before you include the religious
opposition into the mix. Had they started years ago, and attempted to curtail
some of the religious conservative's power early on, they might have been able
to ride things out. As it is now, it's going to be a very bloody crash in
every sense of the word.

------
mrottenkolber
Saudi Arabia is a medieval country. They have far greater problems than
vanishing jobs and a one-sided economy. Its really a disgrace to humankind.
Revolution now, please.

[https://en.wikipedia.org/wiki/Human_rights_in_Saudi_Arabia](https://en.wikipedia.org/wiki/Human_rights_in_Saudi_Arabia)

~~~
mrottenkolber
Oh right and its an ally of the western world... Unacceptable.

~~~
digi_owl
Frankly the cold war was basically just a continuation of the great game, with
some of the players changing seats.

"History may not repeated, but it sure do rhyme."

------
fitzwatermellow
With the NYT, WSJ, Brookings, Economist and virtually every prognosticator of
the punditry classes forecasting dark times for the Kingdom, I'm sensing a
crowded trade and beginning to look for contrarian, optimistic predictions...

~~~
theparanoid
Good luck. I know of many many Iranian programmers. Never seen a Saudi.

~~~
m_sahaf
Saudi programmer here. I can count 4 immediate cousins who are programmers,
from the top of my head; not to mention a number of my high school classmates,
a few friends from college, and others that I've met here and there. The
webdev team at my previous job was all Saudis; there were even girls in the
team. Absence of evidence is not an evidence of absence.

------
kawsper
Planet Money did a recent podcast about the situation
[http://www.npr.org/sections/money/2016/02/03/465476188/episo...](http://www.npr.org/sections/money/2016/02/03/465476188/episode-681-the-
oil-kingdom)

------
freewizard
I agree with how The Atlantic took this topic step further[1], which was
posted on HN earlier[2].

[1]
[http://www.theatlantic.com/international/archive/2016/02/sau...](http://www.theatlantic.com/international/archive/2016/02/saudi-
arabia-collapse/463212/)

[2]
[https://news.ycombinator.com/item?id=11143588](https://news.ycombinator.com/item?id=11143588)

------
n0us
> 70% of the population is under 30

I don't see this ending well, there is no way this leads to a sustainable
balanced system.

~~~
eudox
It gets worse,

>90 percent of government revenues are from oil; 70 percent of working Saudis
are employed by the government

I don't think they've worked out the problem of stable succession either,
given that every change in King has been from a brother to another[0], rather
than to a son.

[0]:
[https://en.wikipedia.org/wiki/King_of_Saudi_Arabia#Kings_of_...](https://en.wikipedia.org/wiki/King_of_Saudi_Arabia#Kings_of_Saudi_Arabia_.281932.E2.80.93present.29)

~~~
airplane
A possible fix is to start investing, but it may be too late. If I remember
correctly I think investing for profit is a gray area in Islam, but Kuwait did
it and if I remember correctly they use to have more returns from their
investments then they did on oil and paid every citizen a base salary from it
(until Saddam invaded and they had to cash out).

~~~
digi_owl
Best i recall, there is some issues with lending and interest.

After all ol' Muhammad was a merchant by trade...

~~~
simplect
Trade and investing is permissible in Islam. However interest and derivative
financial instruments are strictly prohibited for various reasons, one of
which is trying to avoid "renters' economy.

------
kamaal
Inevitable. But hardly surprising.

I(I'm from India) have some cousins working there to make a living. From
everything I've heard, I get a feeling there is hardly any effort to build
anything. No universties, and even those that exist run at the expense of
people from other countries. There is crazy dole out of free cash, start from
the king to the citizen.

The royal family from what I've heard literally wants everything government.
The main king Ibn Saud had some I guess 10's of wives, from whom he fathered
100's of children, who now have reproduced to 1000's of grandchildren. Since
not every one can be a king, you have to distribute government positions among
the progeny of Ibn Saud, to keep people from dissenting and getting too
ambitious to disrupt the line of succession. Apart from that from what I've
heard, they also award prime contract, licenses and projects to their own
family. So basically every thing stays and is designed to benefit only one
family.

All this in a major tribal society, with heavy influence of the clerics. So
they closely intermarry their own with the clerics and powerful tribes. Its
basically a syndicate.

But they also realize that they can't do this forever. So they keep throwing
some token pennies at their people. Basically building a welfare state.

There is no attempt to build self capabilities of any kind. They've tried and
failed with a policy called 'Saudization'. To reduce the dependence on foreign
nationals, they've tried everything. But people have so much dependence on
free cash, they hardly feel the need to work. Lack of productivity(putting it
mildly) among Saudi nationals or even a lack of desire to work, has been a
source of jokes for decades.

Here is a hint to people in US. Look at a nation where there is "Universal
Basic Income", or all those freebies and welfare benefit your guys ask for. Do
you want your country, which is an example for remainder of the world for
progress to turn into a nation like this?

~~~
induscreep
> No universities

You have KAUST there, which is a decent place.

------
jstalin
Saudi Arabia is one giant welfare state of ISIS sympathizers where they have
had no incentive to innovate.

------
melling
Sounds like it was an interesting social experiment with all that money over
several decades.

"70 percent of working Saudis are employed by the government; and even the
private sector remains heavily dependent on government spending."

------
molecule
This seems like a non-sequitur. A Saudi crisis due to cheap oil, but cheap oil
is a result of increased Saudi oil production, to squash American and other
shale extractors…?

~~~
mathgeek
Cheap oil is the result of many factors. America and other new production is
one of them. Saudi response to that price drop led to further price drops.
It's looking more and more like the Saudi plan will end up backfiring, as they
can only bankroll the losses for so long.

~~~
revelation
And of course the losses cause just more oil production, as they turned OPEC
into a zero-sum game where nobody trusts anybody else.

No good stopping your production and eating the massive, massive loss when
your "partner" will ramp up and get your share.

------
chris_wot
Man, if this is happening right now whilst the world demand for oil is high,
what's going to happen to them when demand is lessened due to new technology?

~~~
orionblastar
When oil demand is low, they have to get into a new market like renewable
energy. Solar, wind, water turbine, geothermic etc.

They have to invent the IP, and sell the equipment, and use it in their own
nation to sell the electricity or batteries for money.

It takes a different business plan than oil, but they have to adapt to it
sooner or later.

~~~
pkaye
It is difficult to export electricity, (renewable or not) due to transmission
infrastructure costs and losses.

~~~
justinclift
Wouldn't reducing the transmission losses be worth them putting serious R&D
effort/$$$ into?

~~~
chris_wot
Transmission lines to the USA from Saudi Arabia - is that even feasible?

~~~
justinclift
Technically... probably possible. Feasible... that would be the R&D required.
:D

Undersea cables are run for comms. So, super-massive-XXL sized superconductor
versions of that...? ;)

------
esaym
Perhaps this will spell the end of the Saudi drift scene [1][2], which is
ridiculous anyway.

[1][https://en.wikipedia.org/wiki/Tafheet](https://en.wikipedia.org/wiki/Tafheet)

[2][https://youtu.be/6yPIBKOQnTI](https://youtu.be/6yPIBKOQnTI)

------
jorgecurio
it's like seeing the same situation in all developing nations but not as bad
as Saudi Arabia.

We no longer have any guarantees that our parents had. We no longer have the
resources or lack of debt from our previous generation of careless
expenditure.

In lot of ways millenials are fucked, but looks like more so for countries
that put all their eggs in one basket.

~~~
HillRat
There's a modern Sa'udi proverb that I think sums up their situation: "My
father rode a camel; I drive a car; my son flies an airplane; my grandson will
ride a camel." Nobody can match a Gulf Arab for sheer fatalism.

~~~
gaelian
Sounds like a commandeered/re-jigged version of a quote attributed to Râshid
bin Sa`îd Âl Makṫûm[1]:

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my
son drives a Land Rover, his son will drive a Land Rover, but his son will
ride a camel."

So it would appear that amongst their other concerns, the Saudis also need to
start producing their own fatalistic proverbs, rather than importing them from
Dubai.

[1]
[https://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum](https://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum)

------
arcticgeek
Sounds like Alaska in the near future.

