With 28 million people and a $376 billion economy, Saudi Arabia provides its citizens with subsidized goods, services, healthcare, housing and education to assure a stable political system and long-term allegiance to the House of Saud, according to Rochdi Younsi, director in the Middle East and Africa practice at the Eurasia Group. An expert on the Gulf Cooperation Council, Younsi has been featured on CBS’ “60 Minutes” and on National Public Radio.
Thanks to its oil revenues, Saudi Arabia is building new cities such as the $26 billion King Abdullah Economic City, and hiring American contractors and consultants to construct this sustainable metropolis on the Red Sea. The vision: to create modern cities in which various major corporations will be headquartered. The payoff: approximately 1,000,000 new jobs for Saudi nationals.
Cash-rich Kuwait, which recently invested $800 million buying the Chrysler Building, has a $138 billion economy and $200 billion in reserves. According to Younsi, Kuwait is fascinating because it depends heavily on oil production and export to finance its Kuwait Investment Authority, which was established in the 1950s. The nation’s democratic system of government can be both an impediment and an advantage because it includes a parliament with real legislative powers and the ability to redesign the emirate’s economic strategy – which can mean gridlock.
Dubai, by contrast, has a $37 billion economy and is $100 billion in debt, following its building boom to establish itself as the Middle East’s financial hub. Younsi says it is important to not think of Dubai as an independent nation because it is one of seven emirates comprising the United Arab Emirates. Dubai lacks energy resources and is dependent on revenues it receives from the larger and wealthier Abu Dhabi, which is rich in oil and gas.
Eurasia Group is the world’s leading political risk and consulting firm that helps corporations make informed business decisions in countries around the world.
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