King Banaian comes through with my plea for hard data on capital investment in the Saudi kingdom.
Stephen, some of the data you need is on the IMF website. See http://www.imf.org/external/np/sec/pn/2001/pn01119.htm. I had no idea before reading this that their debt/GDP ratio was as high as it was. Private investment in general is way down. They have had to open up to foreign investment, and government investment is up on the strength of better oil revenues from 2000 on.
Sadly, the IMF data only cover through 2000, and even those data are merely preliminary. Read down to the charts at the bottom, and you’ll see a rather mixed picture.
If I had to speculate — and I do — I’d say today the picture is worse.
The Saudis are pulling their dollars out of the US, weakening the strength of the currency they need to buy pricey imported goods. And Saudi has to import most everything but oil, hate, and madmen.
Furthermore, they’re shooting themselves in the foot (or, “pulling a Bob Barr,” as I like to call it) by voluntarily boycotting US goods.
And then there’s the general investment climate in the entire Middle East. With war ongoing and more war on the horizon, it’s a region any cautious investor is happily avoiding.
That’s the speculation. The happy chance is, we won’t know the reality until after it comes crashing down on Riyadh.
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