Economic Transformation in Saudi Arabia
You will find the “Economic Transformation in Saudi Arabia” case study on page 60 of the course textbook. You will be required to read the case study and answer the following questions.
What long-term economic and political problems does Saudi Arabia face?
How might the reforms proposed by Muhammad bin Salman potentially address these problems? Who will gain from these reforms? Who might object and push back against them?
Current plans for Saudi Aramco call for the state-owned oil company to be privatized. An initial public offering (IPO) is tentatively scheduled for 2021. What are the potential benefits to Saudi Arabia of privatizing Saudi Aramco? Is there a downside?
Is it morally correct for international businesses to invest in a country that denies basic rights to women?
Is it morally correct for international businesses to invest in an autocratic country where the current leader has been implicated in ordering the murder of one of his critics?
Sample Solution
Economic Transformation in Saudi Arabia
The oil crisis spells big trouble for Saudi Arabia, the world`s largest petro-state. for years, the nation`s leaders, particularly Crown Prince Mohammed Bin Salman, have been preparing for an economic transition away from oil. But the spectacular collapse in global demand and prices stemming from the coronavirus has brought a moment of reckoning for the kingdom, one that will require unprecedented action to manage without prompting profound economic stress or internal political instability. For decades, oil revenue has been the glue holding the Saudi economy together. It helped cement the kingdom`s internal stability, funding lavish welfare programs benefiting millions of Saudi citizens.
