CNBC: Saudi Arabia is ‘gradually running out of money’ and needs IPO to fund reforms, ex-CIA chief says
* Saudi Arabia is going to float a small portion of its state oil giant Saudi Aramco, the most profitable company in the world, in December.
* The IPO was first flagged in 2016 by the now-Crown Prince Mohammed bin Salman.
* The listing is seen as part of the crown prince’s “Vision 2030” program of economic and social reforms designed to diversify the kingdom’s economy and reduce its dependence on oil.
Saudi Arabia needs the initial public offering (IPO) of its state oil company to be successful as it needs to attract outside investment and, frankly, it needs the money, the former chief of the CIA David Petraeus told CNBC Thursday.
“It’s a fact that Saudi Arabia is gradually running out of money, they’d be the first to acknowledge that the sovereign wealth fund has been reduced, it’s somewhere below $500 billion now,” Gen. David Petraeus, who is currently chair of the KKR Global Institute, told CNBC’s Hadley Gamble in Abu Dhabi.
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Update: Saudi Arabia is 'running out of money' and needs the Aramco IPO cash, ex-CIA director says (Business Insider)
WNU Editor: Saudi Arabia is sitting on over 200 billion barrels of oil that is worth over $10 trillion. I am not going to be worried that they may run out of money. Their main focus should be on how to spend and invest it.
5 comments:
Maybe Petreaus is still getting his intel and advice via pillow talk?
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10 trillion sounds like a lot, unless you do some basic math.. lets say their gdp is 500bn (it's actually more, but whatever), so it's about 20 years worth of gdp output. That is not fucking long. They need to fucking hurry to change their economy, which takes decades to change (and then decades to change perception of others to do business with you).
It's of course a simplistic calculation and doesn't take into account any additional income (which they have ofc), interests paid, investments made etc.. but still.. 10 trillion ain't that much if you are a country that is not very small in terms of population or gdp output (because it's also a good proxy to understand spending needed to keep the show going)
Bernanke and obama's attempts to get the US economy growing again went through from $9 trillion to $15 or more trillion during the years prior to DJT being elected, depending on what story one happens to think is credible.
So yes, $10 trillion can disappear relatively quickly.
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