Middle Eastern countries such as UAE and Saudi Arabia have built their fortunes on their ‘black gold’ or oil. The surge in oil demands and prices in previous decades have enabled these countries to enjoy such luxury. It is quite difficult to imagine an oil-rich country like Saudi Arabia will ever go bankrupt right?
But reports and statements from the International Monetary Fund (IMF) reveals that the country might face a big fiscal crisis within the next 5 years. The national GDP may not keep up with its expenditures if current economic trends and government expenditures continue. IMF warns that the Saudi Arabian government might have to cut back on its spending and review its policies regarding its oil products.
Meeting of Saudi Arabian officials with US President Obama
The IMF claims two reasons for this impending economic crash,
1. The continuing drop of oil prices in the international market as dictated by nations like America.
2. Increasing regional conflicts and surge of refugees.
3. Unnecessary government spending
Some of the major expenditures of the Kingdom in 2015 are as follows: $32 billion dole outs distributed to the public, for the celebration of King Salman Bin Abdulaziz Al Saud’s corontation, military spending with a defence budget of $80.8 billion making them the third most expensively funded military in the world; and lastly the war in Yemen being singlehandedly fought by KSA.
The influx of government spending on helping out refugees and even paying for labor has largely affected the country’s finances. In fact, last year alone they had been forced to delay projects, cut government spending and sell bonds amounting to $15 billion to domestic and foreign investors. However those measures hadn’t been enough as the country’s assets dropped $82 billion last year.
The resulting losses has been detrimental not only to the country as a whole, but even to the smaller scale of workers and companies. Some contractors had not been paid for their work for 6 months already. Almost all of the countries in the OPEC are reeling from the problem, but Saudi is one of the hardest hit as the biggest oil exporter with more than 80% of its economy relying on the oil industry.
Experts advise that OPEC and Saudi Arabia may have to make their move on adjusting international policies and prices on oil exportation. Indeed this situation is developing like a seesaw. While the rest of the world enjoys more affordable fuel, these “oil” countries suffer. And to save their economies, perhaps the whole world will have to share the financial burden with oil price hikes. Where do we strike the balance?
Got some insights to share? Comment them below and share this story too.
Bees Kill Penguins by Stinging Them in the Eyes
2000 Kilogram Sunfish Caught Off North African Coast
Man Embezzles $57K in COVID-19 Relief to Buy Pokemon Cards
Florida Man Catches and “Recycles” Alligator in Driveway
Man Shocks Reporter on How He’d Spend the Lottery Winnings
Man Joins Search Operation Not Realizing He’s the One Missing
World’s Oldest Rhino Dies in Italian Zoo at 54 Years Old
Meet Quilty – Cat Escape Artist Helping Other Cats Jailbreak
Fans Use American Flag to Save Falling Cat During Football Game in Miami
TikToker Shares How She Tricked Invaders Who Tried Opening The Hotel Door While She Was Alone
Man Iced Neighbor Who Repeatedly Asked Him “When Are You Getting Married?”
Do You Live in One of These 15 Countries With The Most Beautiful Women on Earth?
The Secret Meaning of Anklets And Why Some Wives Wear Them
Waking Up Between 3 to 5 AM Could Mean You’re Experiencing Spiritual Awakening
Divorced Man Wrote 20 Epic Marriage Advice He Wished He Could Have Had
Haunting Photos of Two Tourists Snapped Just Before They Mysteriously Disappeared
“Chastity Cages” is the Latest Thing for Men
Pork Fat Is Officially One of the World’s Most Nutritious Foods
Some Stranger Padlocked This Guy’s Earlobe And Ran Away With The Key
Three-Month-Old Baby Left Blind in One Eye After Family Friend Took His Picture
News10 months ago
Mexican Residents Tie Mayor To Tree After He Failed To Fulfill His Campaign Promise
Interesting10 months ago
Diver Coaxes Octopus To Trade His Plastic Cup For A Shell
OMG10 months ago
Bride Asks Husband If She Can Hug Her Ex-BF “One Final Time” During Wedding
Entertainment9 months ago
Dwayne ‘The Rock’ Johnson Could “Unite The People” If He Runs As US President, Says The Undertaker