Why Saudi Arabia is doomed

Saudi Arabia may seem to many of us to be a country with a golden future. A country with enormous reserves of wealth, collected from almost a century of trading in oil and holding a monopoly on the world's hydrocarbon market. BUT... I would argue that the enormous economic power the Saudis built on the hydrocarbon market has doomed their country, as well as those of their neighbors in Qatar or the UAE. The holding of such a monopoly stagnated political development and therefore left these countries in a position of being ill-prepared for a world after oil. To showcase this, I will however take you to a different place first. The Congo

Why Nations Fail by Darren Acemoglu and James Robinson
A world History of Slavery by Milton Meltzer
Conquerors by Roger Crowly

Impromptu no. 4 in A flat major, D. 899
Preludes, Op. 28 - No. 15 'Raindrop'
Ballade no. 1 in G minor, Op. 23

Thank you again, and don't forget to subscribe to watch more.

[Kraut_the_Parrot]

Pinned comment reserved for correcting potential mistakes, adressing critizisms, and other releated points:

1: "How is Iran not impacted by this" - Ironically the sanctions against Iran mean that iran will in the long term be in a better position than the Saudis, because Iran is forced through the sanctions to diversify its economy in advance.

[TomFynn]

I read a quote somewhere by an Arab oil tycoon who said in effect "My grandpa rode camels, my father rode a car, I ride a Ferrari and my grandson will ride a camel."

[IMPERIALYT]

Honestly, I find the most impressive part of this video how you manage to create analogues between centuries; an ancient African Kingdom complacent in its slave wealth and an Arabic Kingdom complacent in its oil wealth. It's an art to make these videos relevant to contemporary forces, and on top of that you manage to communicate the trap of innovation stagnation very well.

[justaguy]

As an African, I'm glad people are talking about this dark history of ours. May it be a lesson that evil is not based on race but based on the very nature of human beings and we should all as humanity, not races, learn from the mistakes of our ancestors....

[DarksideModerator]

The sad part is the thing that happened to the Kongo didn't stop there. Dahomey is another example of an African state that almost completely morphed into a militant state that structured itself entirely around the slave trade. Even after the abolition of slavery in Europe, these social, economic, military, and political structures persisted, paralyzing the development of multiple African states in the 19th century.

[alexrofe]

Perhaps the most disturbing part of this for the Congo is that, after the slave trade,

Their wealth was gone
Their nations income was gone
Their social structure and institutions were broken
Their diplomatic importance and influence was gone

All that was left was one of the only investments the monarchy made, the guns. That was all they had left.

[Hatypus]

"But you can only see their portraits in Portugal, and some in Brazil"

You showed a painting of an emissary to the Dutch which if I recall correctly is on display in Denmark.

[jam]

My family and I lived in Saudi Arabia almost continuously for 14 years, my father worked for the Saudi military through a UK and my mother worked for various Saudi Universities. This country was my home for the majority of my childhood and teenage years and the experiences gained there inform my thoughts on Saudi Arabia.
I think the most important point in this video is how slavery in the Kongo (present day Northern Angola) created a sort of inevitable collapse of the country, it was just too reliant on slavery, and too reliant on the secondary effects it gave. And Saud’s great oil reservoirs place Saudi Arabia in a similar situation, and that there is no possible way for Saudi Arabia to wean itself from oil, nor for it to remain as the country we know should oil run out. The problem is not just that of hydrocarbons and how it dominates the country’ s economy, it is that for the past 50 years, the entire society has been built around what oil provides and that the country does not seem to realise that it needs to diversify completely from oil in order to be able to provide for itself.
At this point the Saudis know that they need something else, Saudi Vision 2030, is their answer to organise the government into pushing less oil reliant industries. If you look at Saudi exports, however, apart from products directly related to oil and oil refinement, the next largest export by a large margin is heavy metals. The largest of these heavy metals is aluminium, the problem with aluminium is that in order to refine aluminium you require petroleum coke, an oil refining by-product and a lot of power, provided by oil generators, and it is a similar case with their steel refinement. Saudi is expanding their industrial capacity but only by utilising what they already make with oil at this time.

However, the largest problem with Saudi Arabia and why it will not survive is to do with their current emigration and immigration policies. The reason these are a problem are that Saudi has a work ethic problem in that native born Saudis are given a life from birth that is comfortable and that continues into adulthood. They are given sinecures, government jobs and salaries, while they import manual workers from poor countries, cheap labourers from India, Philippines and specialised jobs mainly from the West. It has worked alright for the past 40-50 years, the problem is that Saudi Arabia is not as financially attractive anymore, the salaries are down, they have introduced taxes and have failed to make the country more hospitable to Westerners to counteract salary decreases. Everyone has heard of the issues with the cheap labour they bring; they are treated like slaves in Qatar, UAE and Saudi, and for the most part this is ignored by these workers because the pay is good, but once the pay is not good these cheap workers will stop arriving and will start leaving. These two problems combined means that Saudi Arabia is going to suffer a massive worker shortage including, perhaps most importantly in the oil fields and security forces. This problem is made worse in that, the Saudis who want to work, who are motivated and educated leave the country for a free society and better prospects. And it is not just the males who are able to leave. Saudi female graduates or those at university, the half who are actually motivated all go to the USA or the UK to finish their education and stay there. It is a massive brain drain that is not even realised outside the country because there are so many westerners masking it. Its why the new Crown Prince, MBS, has tried to reform the laws so much as part of Saudi Vision 2030, especially in regard to women, because they are leaving in their droves, and with them go their bank accounts, the money spent in Saudi Arabia, their children and Saudi’s future.

[eliteplier]

Came for Saudi Arabia
Stayed for Poruguesse Kongo

[MelGibsonFan]

Why “X Country” is doomed could pretty much be a long running series at this point. It also feels like this would apply for most of the OPEC nations. As usual great content.

[flynnstone]

Only Kraut could make a video about Saudi Arabia that entirely proves his point by talking about the Congo for 12 minutes of the 14 minute runtime.

Excellent content as always. The history major in me adores your use of historical context to construct arguments about the modern day.

[SirFloopy]

I remember hearing from my parents that my grandfather nearly moved his family to Saudi Arabia from the United States in the 1970s, as they were apparently facing a crushing lack of engineers at the time, and would have paid him very well.

Apparently my grandmother did her research, learning about all the legal restrictions that would be placed on her and her children, as well as the isolated nature of their daily lives as you allude to at the end of this video. And she put her foot down on what was otherwise pretty much a done deal.

I'd always figured she made the right choice, but watching this video, the connections you make between Congolese history and the Saudis' present, and getting more of the larger context for why the country is the way it is... She may have *really* dodged a bullet for her family.

Edit: Typo

[atix]

Excellent video. Those who are angered by the European slave trade rarely acknowledge the role of Africans in the practice. (My biological father is a West African barrister and is thoroughly of the opinion Africa is still selling its people's future to the highest bidders - China and Russia this century)

[Balint-ys]

A similar effect was seen in Spain where the vast gold wealth from the new world dincentivized development of its local economy and squandered on pan European religious wars, and led to Spain having an economy backward relative to the rest of Europe until the beginning of the 20th century.

[RavignonCh]

I've read the Lincoln Republicans argue against corporations existing for a while. A lot of their arguments were that an economy structured around the strategic control of property can devalue labour across the board, and citizens become less empowered by becoming less and less relevant to the functioning of the government's funding requirements.

I thought the Saudis were a very extreme example of this, but it's grim to realize the slave trade worked to create a similar state too. In the end, the message is that it's a stupid game that wins you a stupid prize.

[mythperson]

The fact that 75% of this video has nothing to do with Saudi Arabia yet it all relates is the magic I love about this channel, thank you again my sir

[stevekoskiesq]

To be honest, this is a masterclass in educating, it had me enraptured throughout and got its message across with grim effectiveness

[PoliticswithPaint]

Wow, the story of the Kongo is a sad and haunting tale for the Gulf states to hopefully learn from.

[TempusFugitYT]

Saudi Arabian hydrocarbon reserves are likely going to be depleted within the next 50 years. Since 1980, Saudi Aramco has been owned entirely by the Saudi government. Following the centralization of the industry in 1987 under the control of Saudi Aramco, the official crude oil reserves increased from just over 170 billion barrels of crude to well over 200 billion barrels of crude. This shift went against the consensus estimates of all western oil majors at the time. BPD (barrels per day) has remained stagnant since the early days of OPEC. Regardless of the market incentive structure, it seems as if Saudi Aramco lacks the capacity to break the 9.5 million BPD barrier. Even when engaged in a price war, enjoying peak profitability, and preferred shipping/insurance rates, they still have failed consistently to breach the 10 million BPD barrier.

Despite government figures, no one truly knows how much more hydrocarbon can be pulled from the modern Congo’s coffers. The current attempts at diversification have failed miserably. In practical terms, Saudi Arabia is little more than a joint stock venture masquerading itself as a nation-state.

[e.g.]

I met a traveler from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”