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The Collapse of Saudi Arabia Is Inevitable

Business  (tags: oil, Saudi Arabia, economic policies, poverty, Climate Change, GDP, imports, dependency, collapse, monarchymoney, environment )

- 1388 days ago -
Like many countries in the region before it, Saudi Arabia is on the brink of a perfect storm of interconnected challenges that, if history is anything to judge by, will be the monarchyâEUR(TM)s undoing well within the next decade.


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Ben O (129)
Tuesday September 29, 2015, 4:40 am
OK, I'll say it again; -I am indeed grateful for not living in that freaking country!

Frans B (582)
Tuesday September 29, 2015, 5:11 am
thanks for this Evelyn - but I am just thinking....if you have so much money, it just grows more and more.... does not matter if the whole world stops doing business with them tomorrow, they still have HUGE money mountains....????.....enough money makes you invincible.....

fly bird (26)
Tuesday September 29, 2015, 5:28 pm
Tell the United States to Accept More Refugees and Asylum-Seekers From Syria

Join The Nation, Katrina vanden Heuvel, and MoveOn in calling on the United States to take in more Syrian refugees.

Suzanne L (89)
Wednesday September 30, 2015, 12:50 am
It is a system that is bound to collapse even though many Saudis have money mountains and are heavily invested in U.S. banks, other institutions and even cattle farms in the west as well as major investments worldwide.

But deep-rooted structural realities mean that Saudi Arabia is on the road to state-failure - a process likely to take-off in the next few years. On Tuesday 22 September, Middle East Eye broke the story of a senior member of the Saudi royal family calling for a “change” in leadership to fend off the kingdom’s collapse.

The biggest thing though is oil; Saudi Arabia’s primary source of revenues. For the last few years, the kingdom has pumped record levels to keep prices low to undermine competing producers around the world who cannot afford to stay in business at such tiny profit margins, and paving the way for Saudi petro-dominance.

But Saudi Arabia’s spare capacity to pump like crazy can only last so long. A new peer-reviewed study in the Journal of Petroleum Science and Engineering anticipates that Saudi Arabia will experience a peak in its oil production, followed by inexorable decline, in 2028 – just 13 years away.

As revenues are strained, the kingdom’s capacity to keep a lid on domestic dissent will falter, as has already happened in countries across the region. About a quarter of the Saudi population lives in poverty. Unemployment is about 12 percent, and affects mostly young people – 30 percent of whom are unemployed, and climate change will heighten the country’s economic problems, especially in relation to food and water.

Like many countries in the region, Saudi Arabia is already experiencing the effects of climate change in the form of stronger warming temperatures in the interior, and vast areas of rainfall deficits in the north. By 2040, average temperatures are expected to be higher than the global average, and could increase by as much as 4 degrees Celsius, while rain reductions could worsen.

This would be accompanied by more extreme weather events, like the 2010 Jeddah flooding caused by a year’s worth of rain occurring within the course of just four hours. The combination could dramatically impact agricultural productivity, which is already facing challenges from overgrazing and unsustainable industrial agricultural practices leading to accelerated desertification.

In any case, 80 percent of Saudi Arabia’s food requirements are purchased through heavily subsidised imports, meaning that without the protection of those subsidies, the country would be heavily impacted by fluctuations in global food prices.

Saudi Arabia is particularly vulnerable to climate change as most of its ecosystems are sensitive, its renewable water resources are limited and its economy remains highly dependent on fossil fuel exports, while significant demographic pressures continue to affect the government’s ability to provide for the needs of its population. These are the results of a study concluded by the UN Food & Agricultural Organisation ort in 2010.

The kingdom is one of the most water scarce in the world, at 98 cubic metres per inhabitant per year. Most water withdrawal is from groundwater, 57 percent of which is non-renewable, and 88 percent of which goes to agriculture. In addition, desalination plants meet about 70 percent of the kingdom’s domestic water supplies. But desalination is energy intensive, accounting for more than half of domestic oil consumption. As oil exports run down, along with state revenues, while domestic consumption increases, the kingdom’s ability to use desalination to meet its water needs will decrease.

In Iraq, Syria, Yemen and Egypt, civil unrest and all-out war can be traced in part to the devastating impact of declining state power in the context of climate-induced droughts, agricultural decline, and rapid oil depletion. Yet the Saudi government has decided that rather than learning lessons from its neighbours, it won’t wait for war to come home – but will readily export war in the region in a madcap bid to extend its geopolitical hegemony and prolong its petro-dominance.

Unfortunately, these actions are symptomatic of the fundamental delusion that has prevented all these regimes from responding rationally to the crises that are unravelling the ground from beneath their feet. That delusion consists of an unwavering, fundamentalist faith: that more business-as-usual will solve the problems created by business-as-usual.

Like many of its neighbours, such deep-rooted structural realities mean that Saudi Arabia is indeed on the brink of protracted state failure, a process likely to take-off in the next few years, becoming truly obvious well within a decade.


Jordan G (37)
Wednesday September 30, 2015, 4:19 am
Would be nice, but not a chance.

Tell Saudi Arabia to take more refugees.

Jordan G (37)
Wednesday September 30, 2015, 4:20 am
That was a really silly financial and political analysis ... as if they're only investing their money in oil. Don't worry ... they have plenty of diversified interests.

Past Member (0)
Wednesday September 30, 2015, 5:00 am
Room for survival

Jonathan Harper (0)
Friday October 2, 2015, 4:41 am

Roger G (148)
Friday October 2, 2015, 12:59 pm
noted, thanks

donna m (97)
Saturday October 3, 2015, 12:30 am

donna m (97)
Saturday October 3, 2015, 12:32 am
thanks for sharing

Jim M (38)
Saturday October 3, 2015, 1:25 am

Jim M (38)
Saturday October 3, 2015, 1:27 am
thank you

Darren Woolsey (218)
Tuesday October 6, 2015, 9:01 am
Having plenty of wealth can also create the illusion of power and massive inertia can set in; one can delude one's self that one can do anything, yet, without practical application, wealth is quite irrelevant.

Thanks Evelyn.
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