Saudi Arabia: seeking security (catch all)

[davidbfpo]

A succint briefing from The Soufan Group and BLUF:

The Saudi Arabian government announced that it has arrested 431 individuals, most over the last month, on charges associated with the Islamic State • Few countries are as sensitive to instability concerns as Saudi Arabia, and the country faces a serious domestic threat of Islamic State cells
• Following a steady procession of suicide bombings and shootings, Saudi Arabia is trying to disrupt the Islamic State’s momentum inside the country
• The number of Saudi nationals who have traveled to join the Islamic State in Syria and Iraq pales in relation to the potential recruiting pool of radicalized young Saudis who might prefer to fight at home.

Link:http://soufangroup.com/tsg-intelbrie...state-at-home/


I wonder if anyone in KSA has pointed out that in the Yemen the KSA is acting in apparent concert with AQAP?

[davidbfpo]

From a short paper by the Washington DC based Wilson Center:

The Yemeni civil war is making for strange bedfellows. Who would have predicted that Saudi Arabia and al-Qaeda might become allies despite the terrorist group’s near success in assassinating the current Saudi crown prince six years ago? Who would have thought the Kingdom would turn to the Muslim Brotherhood for help even though the Saudis have condemned it as a terrorist group at home? But this is what is happening in Yemen as the struggle between factions, seen by rivals Saudi Arabia and Iran as proxies of each other, relentlessly grinds on with no end in sight. These Saudi alliances may be mainly tactical and of short duration, but they are straining Saudi relations with the United States, which regards al-Qaeda in the Arabian Peninsula (AQAP) as the most dangerous terrorist threat to the U.S. homeland. They are also angering Egypt’s President Abdel Fatah al-Sisi, who looks upon the Brotherhood as an existential threat and the main source of the escalating terrorist insurgency he faces.

Link:http://www.wilsoncenter.org/publicat...-allies-yemen?

[CrowBat]

...just because Oblabla is holding half the report on 9/11 locked due to Saudi involvement, means not it's really 'surprising' the Saudis are cooperating with al-Qaida, Moslem Brotherhood etc., especially so in Yemen.

If anybody 'imported' Wahhabism into that country, then it was the Saudis, and that with all force, and every Dollar they could spend for that purpose, already since early 1990s.

Much more worrying is the fact that the Saudis are dumb enough to believe they could hold the powers they have unleashed there 'under control'.

...and that nobody in the West cares about this.

Greetings from 'new' Saudi allies in Yemen:

Al Qaeda's branch in Yemen, which officials have called the terror group's most dangerous affiliate, has issued two threatening new communiques praising recent lone-wolf style attacks against the West and calling for more of them.

"We urge you to strike America in its own home and beyond," says a letter attributed to Ibrahim al-Asiri, the master bomb-maker with al Qaeda in the Arabian Peninsula (AQAP).
...

Hey... when one thinks of it... since Saudi Arabia is a US ally, the AQAP is now de-facto US ally too, or isn't it...?!?

[davidbfpo]

Sometimes I do wonder with all the history of the Yemen a BBC SME, from RUSI, can write this:

The retaking of a key air base to the north of the southern city of Aden is a major strategic victory for the Yemeni government in its fight against the Houthi-led insurgency.The al-Anad air base is important for a number of reasons.....is extremely important for operations against AQAP)....It was a badly kept secret that much of the US drone programme that targeted al-Qaeda operatives in the south of the country was based out of al-Anad....The recapture of the base and the surrounding areas will ensure that a long-term counter terror presence can be maintaine..

Link:http://www.bbc.co.uk/news/world-middle-east-33778116

Given that part of the anti-Houthi allaince is AQAP, let alone the stance of the Saudis, would the US be allowed to return and attack AQAP? I think not.

Then the BBC's own correspondent, Frank Gardner, reflects on the KSA's new assertiveness:

...the Saudi military has now been at war with Houthi rebels for more than four months....For Saudi Arabia, this is about more than just securing its southern flank.The Saudis fear they are being steadily encircled by Iranian allies and this is something they want to reverse.

Link:http://www.bbc.co.uk/news/world-middle-east-33825064

[davidbfpo]

Not sure what to make of this article, although Saud family rivalry is not new:http://www.middleeasteye.net/news/sa...pse-1612130905

[Firn]

Their intervention in Yemen doesn't seem to go all too well but perhaps more surprising has been the drop in their global assets. 50+ billion is only part of their holdings but it shows they have a huge deficit to cover:

With income from oil accounting for about 80 percent of revenue, Saudi Arabia’s budget deficit may widen to 20 percent of gross domestic product this year, according to the International Monetary Fund. SAMA plans to raise between 90 billion riyals ($24 billion) and 100 billion riyals in bonds before the end of the year as it seeks to diversify its $752 billion economy, people familiar with the matter said in August.

Diversification has been buzzing around for decades, if I'm not mistakes. Funny how the Saudi manager of the pv plants is making exactly the same point as we did some years ago in the energy security thread. Cut the stupid fuel subsidies, save money and sell more abroad to get much more money. Then again this is basic math and common sense so it wasn't all that difficult to get right. In any case the public addiction to those state-sponsored prices will be hard to crack.

[Firn]

A while ago we talked about basic math and today's budget is an interesting exercise in it:

DEFICIT

The government forecasts the deficit will narrow to 326.2 billion riyals ($87 billion) in 2016, from 367 billion riyals [~$100bn] this year.

The 2015 deficit is about 16 percent of gross domestic product, according to Alp Eke, senior economist at National Bank of Abu Dhabi. The median estimate of 10 economists forecast a shortfall of 20 percent of GDP this year, according to data compiled by Bloomberg.

Beyond oil by McKinsey has a good, if somewhat constrained, executive summary with stunning stats and graphs. Among those gems is the amazing fact that private sector's part in the 75% household income growth in the last decade was less then 1%. Lots of other good graphic stuff...

A DECADE OF RISING PROSPERITY FUELED BY OIL

The Saudi economy moved up from being the 27th largest in the world in 2003 to become the 19th largest in 2014. Its nominal GDP of about $750 billion is larger than either Switzerland’s or Sweden’s. On a per capita basis, Saudi Arabia’s nominal GDP of about $24,000 is a little behind South Korea’s and ahead of Portugal’s, although the unique features of the Kingdom, including a sizable population of migrant laborers and a huge oil sector, make this figure misleading.

Saudi Arabia is the world’s largest oil exporter, deriving about 90 percent of government revenue from oil. The sharp increases in oil prices, which rose from about $30 per barrel in 2003 to a sustained peak of about $110 per barrel in 2011 to 2013 before dropping back in 2014, fueled a doubling of GDP during the decade. At a time of growing indebtedness across major developed and emerging economies since the 2008 financial crisis, Saudi Arabia has been a rare exception: the Kingdom eliminated national debt and increased
reserve assets to $732 billion, the equivalent of almost 100 percent of GDP in 2014.

Now the state's oversea funds are decreasing to cover together with bonds the $100bn or 16% deficit. Roughly $120bn of it's revenue came according to that article from oil, ~ 75% of it's total. Such relations make your head spin. In short Saudi Arabia has a huge problem stemming from those factors:

a) The economy is totally dependent on oil revenue which in turn props up the vast public sector
b) Expenditures have been rising rapidly along with a rapidly rising population
c) The little productive offical private sector has been crowded out and is dominated by foreigners

Oil revenue had to grow considerably per annum already in 2013 over the next decade to keep up with expenditure trend. Even oil at $100 wasn't enough going forward ten years, with Saudi energy consumption cutting ever more into it's exports and thus revenue.

So far for 2016 they calculate, at least according to the Bloomberg numbers, higher oil revenue then in 2015. Keep in mind that oil prices have been up to 40% for quite some time higher this year then they are now. They might of course shoot up again despite the supply glut but it is still a surprising to see that projection...