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Thread: Saudi Arabia: seeking security (catch all)

  1. #61
    Council Member davidbfpo's Avatar
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    Default Back to the past or a new era emerges?

    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

  2. #62
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    Default The Liberation of South Yemen Proves Saudi Arabia's Power is Growing

    The Liberation of South Yemen Proves Saudi Arabia's Power is Growing

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  3. #63
    Council Member davidbfpo's Avatar
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    Default Senior Saudi royal urges leadership change for fear of monarchy collapse

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

  4. #64
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    Default Saudi Arabia: The Stunning Human-Rights Abuses of a U.S. Ally

    Saudi Arabia: The Stunning Human-Rights Abuses of a U.S. Ally

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  5. #65
    Council Member Firn's Avatar
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    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.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

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    Speech at the Kriegsakademie, 1935

  6. #66
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    Default Why Saudi Arabia's Coalition Against Terror Might Not be All it Appears

    Why Saudi Arabia's Coalition Against Terror Might Not be All it Appears

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  7. #67
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    Default Analysts: Saudi Arabia's Clerics Inspire Islamic Extremism

    Analysts: Saudi Arabia's Clerics Inspire Islamic Extremism

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  8. #68
    Council Member Firn's Avatar
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    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...

    Last edited by Firn; 12-28-2015 at 08:17 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  9. #69
    Council Member davidbfpo's Avatar
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    Firn,

    Thanks for that update (above) and a "lurker" has pointed out a different, though similar viewpoint in today's Daily Telegraph:http://www.telegraph.co.uk/finance/e...escalates.html

    It appears to rely heavily on Dr Alsweilem, now at Harvard University's Belfer Centre.

    I have not checked the McKinsey report you cite, but the article has this almost IMHO laughable suggestion attributed to McKinsey:
    a McKinsey study – ‘Beyond Oil’ - that sketches how the country can break its unhealthy dependence on crude, and double GDP by 2030 with a $4 trillion investment blitz across eight industries, from petrochemicals to metals, steel, aluminium smelting, cars, electrical manufacturing, tourism, and healthcare.
    davidbfpo

  10. #70
    Council Member Firn's Avatar
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    Quote Originally Posted by davidbfpo View Post
    Firn,

    I have not checked the McKinsey report you cite, but the article has this almost IMHO laughable suggestion attributed to McKinsey:
    Well, that is why I wrote about a "somewhat constrained" executive summary. The McKinsey guys I know are easily smart enough to understand in which kind of business they operate and who pays them for what. This doesn't devalue most of it's ideas but a "can do spirit" certainly helps in marketing them.

    The value of "Beyond oil" lies in showing what happened with oil in the Saudi economy during the last decades. Some of that is captured neatly by those graphic graphs and stats. All in all the dire trends which I posted are nothing new and far more insightful guys like Evans-Pritchard and Khalid Alsweilem have come up with them before. Indeed two years ago the very author pointed out:

    Prince Alwaleed bin Talal, the country’s best-known global investor, said the business model of Middle East oil exporters risks unravelling rich industrial states find ways of cutting demand. “Our country is facing a threat with the continuation of its near-complete reliance on oil: 92pc of the budget for this year depends on oil,” he said in a letter to Saudi oil minister Ali Al-Naimi.
    In short if something can not go on forever it will stop, however the institutional imperative is very strong in the royal clan.

    As this is the SWC it is proper to point out that military expenditures are about $60bn a year, roughly 40% of projected revenues for 2016. The Saudi defence budget is quite opaque, to put it mildly, and with no independent institutions things can easily be shifted around or kicked down into the next year. The takeaway is simply that it is massive relative to budget and indeed to the economy, no doubt in part due to the big salaries payed for the upper echelons.

    Devaluation would of course help a great deal with some internal spending, witness Russia for which every $ goes now twice as far, and some of the military ones like salaries but should make replacing those bombs dropping in Yemen a lot more expensive.


    Finally they seem to cut some of the harmful subsidies:

    The Saudi government will raise the price of gasoline by two-thirds to 0.75 riyals a litre from 0.45 riyals for 91 Octane fuel. Higher electricity, water, and gas tariffs were announced by the Saudi Press Agency on Twitter, following the release of the Kingdom’s 2016 budget on Monday.

    Subsidy cuts aim “to achieve efficiency in energy use, conserve natural resources, stop waste and irrational use”, the Ministry of Finance said in the annual budget statement. The changes will be monitored to ensure that they do not harm either “low and mid-income citizens [or] the competitiveness of the business sector,” the Ministry said.


    P.S: In an ironic twist percentage-wise the dependence on oil of the Saudi revenues decreased this year from 93pc to 73pc just as they post a huge deficit largely because oil prices crashed...
    Last edited by Firn; 12-29-2015 at 10:32 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  11. #71
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    Default Shi'ite Muslims Outraged by Saudi Execution of Cleric

    Shi'ite Muslims Outraged by Saudi Execution of Cleric

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  12. #72
    Council Member davidbfpo's Avatar
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    Two useful commentaries on recent events. The shortest is from the Soufan Group:http://soufangroup.com/tsg-intelbrie...f-sheikh-nimr/

    Longer is that from WoTR:http://warontherocks.com/2016/01/sec...ism-alliance/?
    davidbfpo

  13. #73
    Council Member Firn's Avatar
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    Maybe that particular execution was indeed aimed at inflaming the conflict to have the old external enemy at the center of much internal attention in a time when subsidies have been cut for the first time in a long time and the budget deficit was shocking. Who knows?

    Personally I'm inclined to believe that the recent Saudi pumping is not just a clever play aimed at destroying shale. That might well be part of their thinking, maybe even be the internal offical line as clever sounds always better then an obvious one: Cutting production might have well caused a still bigger short-term budget deficit. If they decided to cut, they would have needed to do so quite deeply to have an effect.

    The oil market has it's specifics but just look at almost every other commodity out there. Be it iron ore or coal, most producers are in a rat race to the bottom, trying to cut costs and increasing production in some cases. So the Saudi decision to keep pumping is hardly singular for those lowest in the cost curve...
    Last edited by Firn; 01-06-2016 at 06:17 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  14. #74
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    Default Comparing Saudi Arabia and Iran

    The new direction of Syrian arguments is about picking a side in the Sunni-Shia conflict.

    Pro-Russian partisans accuse Saudi Arabia of being less democratic and more repressive than Iran, and of using Islamist groups including AQ and IS the way Iran uses the IRGC.

    They highlight Iran's relative "freedom of religion" compared to KSA, the fact that women can drive in Iran, etc. The Al-Nimr execution has brought this line of argument to the fore.

    However, upon closer examination, the Iranian regime is more bloodthirsty. They execute at least 3X more people per year than the KSA and have killed 12,000-15,000 in waves of purges against the Tudeh and other opponents to Khomeini. In contrast, Saudi political bloodletting from '79 to present is several hundred.

    In addition, there is Hezbollah, Hamas and the IRGC to contend with, which are either arms of the Iranian state or sponsored by them. Private donations aside, the Saudis have nothing comparable.

    Anyone care to add more?

  15. #75
    Council Member Firn's Avatar
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    Well I do focus more on the sinews of war, not the political conflict:


    Contracts used to bet whether Saudi Arabia will allow its dollar-pegged currency to weaken were poised for the highest level in almost two decades as oil prices plummeted.

    Twelve-month forward contracts for the riyal climbed 260 points to 950 as of 3:49 p.m. in Riyadh, set for the steepest close since December 1996, when Bloomberg began collecting the data. That reflects growing speculation the world’s biggest oil exporter may allow its currency to slide against the dollar for the first time since 1986.


    A picture can say sometimes more then a hundred words...


    In this context the previously unthinkable to most seems now possible to some: "Saudi Arabia Is Considering Aramco IPO, Deputy Crown Prince Says"


    “Personally, I’m enthusiastic about this step,” [Deputy Crown Prince] Salman said.

    Saudi Aramco produces all of Saudi Arabia’s crude oil, at 10.25 million barrels a day in December. Among listed companies, Russia’s OAO Rosneft produces more than 5 million barrels a day while Exxon Mobil Corp. pumps out about 4 million barrels.
    An IPO will certainly be done in a way that Saudi Arabia de-jure and de-facto still controlls Aramco. Of course like many things it would have been smarter to make such moves in good times but buy high and sell low seems to be the motto of many a miner or driller, public, private or state-owned.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  16. #76
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    Default Ruling the Kingdom: US Agency in the Saudi Arabian Nuclear Proliferation Puzzle

    Ruling the Kingdom: US Agency in the Saudi Arabian Nuclear Proliferation Puzzle

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  17. #77
    Council Member Firn's Avatar
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    To sum up some of my thoughts on the economic (and political) future of Saudi Arabia:

    1. What can't go on forever will end. Even with far higher oil prices - budget breakeven being at around 90$ - the expenditures must be reduced.

    2. The McKinsey study is just one in a considerably number of studies and even official policies all aimed at creating a more diversified economy, so it's chances don't look good.

    3. However as the economy can in the mid- to longterm no longer work like it does change has to be attempted. It will be very difficult as the terrible track-record shows, but it has to be tried.

    4. Success, even a partly one, looks unlikely as past performance is a pretty good indicator, if not a guarantuee of future success.

    5. Oil income has been bedrock of the royal might, enabling relatively generous social subsidies but also to pay the organisations of suppression and co-option (obviously all are related).


    If we take the simple facts and combine them we have to come to the conclusion that Saud Arabia faces in the long run terrible economic challenges. If those aren't met properly, and history suggests that it will be hard to do so, the political system in Saudi Arabia is at grave risk. Of course it might conserve power for a long time even in the face of a much poorer society, but it is almost certain that Saudi Arabia will have a harder time seeking security then thirty years or so ago.


    The Western would certainly do well to prepare well for a variety of scenarios. Things might continue in a certain fashion for a long time but can also change surprisingly quickly...
    Last edited by Firn; 01-10-2016 at 09:16 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  18. #78
    Council Member CrowBat's Avatar
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    If the following is truth, Saudis should have no major security issues for quite some times any more...

    Saudi policical analyst Dahham al-Anzi stating clearly on TV, 'yes Sir, Saudi Arabia has nukes' (via Memri TV, yes, but originally he stated that on an Arabic TV channel, on 15 February):
    http://www.youtube.com/watch?v=yXuJkVPRjNI

    Supposedly, they have a 'handful' of nuclear warheads in KSA, made by Pakistan, but guarded and maintained by Chinese.

    Now, if they have such bombs, and considering circumstances, they might really do that test. And then....

    ...well, what then...?
    Attached Images Attached Images

  19. #79
    Council Member CrowBat's Avatar
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    ...not to forget a day-earlier 'confirmation' from what sounds like quite an authoritative source: CIA Confirms: Saudi Arabia has Four to Seven Nuclear Bombs, Deliverable by Missile or Aircraft
    ..."Founding Director of the Central Intelligence Agency (CIA) Counter-Terrorism Operations Center publicly confirms Saudi Arabia has deliverable nuclear bombs.

    Last week, on "The Hal Turner Show" Mr. Turner told his audience that, based on his years of experience as a National Security Intelligence Asset with the FBI Joint Terrorism Task Force, Saudi Arabia is in possession of nuclear weapons. He also made clear that a CIA asset had (earlier) made this revelation in public, on FOX NEWS CHANNEL, and this revelation was a staggering breach of Classified Information protocols.

    Turner went on to say that "the only way a guy from the CIA would reveal such information is if Washington WANTED the information revealed; otherwise the person who exposed the classified material could be criminally prosecuted."
    ...
    (Added by Moderator) The "CIA guy" film clip on Fox News is available via:https://www.youtube.com/watch?v=qt3t...ature=youtu.be
    Last edited by davidbfpo; 02-22-2016 at 09:03 PM. Reason: Add last link

  20. #80
    Council Member davidbfpo's Avatar
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    Default KSA has nukes?

    Leaving aside the details (as per map), the timing and method one must wonder at the impact within several Western nations, Israel, even Iran and in the USA. Perhaps officialdom knew and just forgot to tell the public?

    From my memory there has been reporting about the Chinese-made SSM before and the KSA refusal to allow the USA to pay a "courtesy" visit. As for them having nuclear warheads that IMHO is a moot point. I have a vague recollection that the USA reassured Israel on the SSM's deployment they had only high explosive warheads.

    In fact I am sure the SSMs have appeared on SWC before and their bases were then shown as nearer to Israel than the map provided today.

    See Post 43 for a detailed report from December 2014:http://www.nti.org/analysis/articles...les-its-saber/

    Within is this paragraph:
    While Chinese DF-3 missiles were armed with large multi-megaton warheads - and thus did not need to be especially accurate - Saudi Arabia's conventionally-armed variants required far better accuracy to provide effective deterrence. China, apparently with Israeli technical assistance, reportedly produced a more accurate version of the DF-3. In April 1988, China delivered the second consignment of DF-3 missiles with "drastically improved" accuracy to replace those delivered a few months before. In the end, Saudi Arabia imported approximately 40 DF-3 missiles capable of carrying a 2,000 kilogram explosive payload to a range of 3,000 km.

    (Chinese helpers on-site?) On balance, however, the evidence suggests that the Royal Saudi Strategic Missile Force is, in fact, Saudi.
    Last edited by davidbfpo; 02-22-2016 at 07:10 PM.
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