Saudi Arabias problem is not low oil prices – it’s the fact that if you discount the oil factor from the country, it reverts to nothingness. They want to diversify their economy and in order to do that they need more oil cash – does anyone see the oxymoron in there? Adam Smith already famously said that in order to go from the lowest level of destitution to the highest level of prosperity, all you need is economic freedom and a stable and reliable judiciary that works the same way for everyone. Both things that don’t even exist in Saudi Arabia in homeopathic doses. Don’t hold your breath for rapid change there.
Things are starting to look good financially for Saudi Arabia again – very good. The de facto OPEC leader and world’s largest oil exporter said today it posted a budget surplus of 27.8 billion riyals (U.S. $7.4 billion) in the first quarter of the year.