Happy New Year PITA-consumers!
What are you all expecting for 2016 in business, intra-MENA trade, development goals, and political bargaining? Whether you are an optimist, pessimist or cautiously optimistic, that list is probably long! Before we ramble on and on about Saudi Aramco — the largest oil company in the world, and the first in the region to open itself up to privatization — we just want to share the latest development challenge in Syria since its Human Development Index continues to drop for the fourth year in a row. In 1980, Syria boasted an HDI of .528, and ranked 69th in the world. Now, 35 years later, Syria’s HDI of .598 has sunk Syria to 134th place, according to the World Bank. Why? How? Well, check this video out explaining how the Syrian government in Damascus uses food as a weapon of control, or “tool of war”, during the siege. For example, in the town of Madaya, 40,000 people have little access to food.
In some areas, the price of food has skyrocketed so that a kilogramme of rice now costs $100.
Meanwhile, Saudi Arabia’s new Council of Economic and Development Affairs has finally heeded IMF’s call to move towards privatizing its primary sector, oil and petroleum. (By the way: Prince Mohammed bin Salman is the Chief Economic Planner who leads the Council– as well as the one in charge of Saudi’s Defense Ministry.) How big is oil in Saudi Arabia? Well, they represent 15 percent of global oil reserves. Saudi ranks as the 19th largest economy in the world.
If it [Saudi Aramco] went public, it could become the first listed company valued at $1 trillion or more, analysts estimate.
Finally, certain levels of Saudi leadership have either recognized the economic, social and political disadvantage of keeping Saudi Aramco out of the private sector…or they have felt their purse-strings tighten with the decreasing global oil prices. Crude oil prices hover around $30. In 2014, financial analysts shouted worriedly when oil prices “crashed” to $70. See the 60% drop within 2 years!
The food crisis in Syria, manufactured by Syria’s tyrant, Assad, still sounds worse than the oil crisis, manufactured by production players, in our humble opinion. Both hurt societies, but one of these crises bears a humanitarian cost that can be solved by changing leadership. Let’s hope that 2016 is on the side of the citizens.