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Newsletter #297

December 21-27, 2008

What's New on SUSRIS

Iran Capturing Iraq (AUSPC 2008) Dr. Kenneth Katzman

"..With the conventional military and WMD threat from Saddam removed, Iran now seeks to insure that Iraq can never again become a threat to Iran, whether U.S. forces are in Iraq or not. I used to ask, with panels like this, two years ago, I would ask my peers on the panel does Iran want the United States in Iraq or do they want us out of Iraq? And the answer that would universally be given two years ago is both, or neither. Well now I think the answer is becoming clear, clearer. Having secured Shia control over Iraq, Iran now -- they were ambivalent two years ago until Shia control was consolidated -- now that it is consolidated, Iran wants the United States out of Iraq.."  [more]

Opening the Aperture on Defense Cooperation (AUSPC 2008) Ambassador Barbara Bodine

"..I think defense has been treated, defense cooperation has been treated increasingly far too narrowly. We’re looking at things; we’re looking at places. And I don’t discount the need for the military cooperation and the sales cooperation that’s been well outlined here, nor do I discount at all the threats that the Gulf States face. The Gulf has become over the last several years, certainly since I was in Kuwait, almost a continuous string of U.S. military facilities -- bases and access that range all the way from Oman to Kuwait. The sales figures Doctor Cordesman has very well outlined those. They are astronomical and we’ve had longstanding engagements with the militaries. Mr. Blanchard has described them as legacy arrangements. These are not insignificant and they are not unimportant and they do need to go forward but I do think we need to open the aperture considerably when we think about defense cooperation both from our point of view and from the Gulf States’ point of view.."  [more]

Saudi-U.S. Cooperation: Building Dialogue (AUSPC 2008) Amb Robert Jordan

"..One of my very most esteemed interlocutors in those days was a gentleman who had left public service at that time and gone into the private sector, thankfully briefly. Prince Turki al Faisal became a good friend and advisor in many ways during those very difficult years in which we were trying to both preserve the relationship and figure out how we jointly were going to approach the problems of the terrorist threat, the unknown situation within the Kingdom. I certainly echo what Ford Fraker has said, that the Saudis, particularly after the bombings in Riyadh in May of 2003 and then later the attacks in Jeddah in 2004, stepped up their game in a dramatic way so that we really now have captured or killed virtually all the leadership of Al Qaeda in the Kingdom. Doesn’t mean there is not a threat. There is of course. But the vigilance that we have seen that has been dramatic and even while it is dramatically underreported in the press in the Western world.."  [more]

Saudi Arabia's 2009 Budget - Jadwa Forecast - Brad Bourland

"..King Abdullah presented the Kingdom's 2009 budget yesterday. It will be the largest budget in Saudi Arabia's history with $126.7 billion in expenditures based on revenues of $109.3 billion and a deficit of $17.3 billion. The 2009 budget, according to a Saudi Gazette report, "will continue to focus on: optimizing use of available resources giving priority to projects that ensure sustainable and balanced development as well as more employment opportunities and job creation, infrastructure and social services, especially education, health, social affairs, municipal services, water and sewage, and roads, projects related to science and technology and e-government capital expenditures to boost economic activities and enhance the prospects of economic growth.".."  [more]

Saudi Arabia's 2009 Budget Analysis - John Sfakianakis (SABB)

"..The 2009 budget offers two surprises. First, it is expansionary at a time when the global economy is in a spending turmoil. Saudi Arabia outlined a spending program that should offer encouragement to the private sector. Second, actual spending in 2008 increased by SR100 billion ($26.66 billion), which is more than 24 percent of budgeted spending. The authorities are quite aware that 2009 will be a difficult year for oil revenues and a deficit is forecast of SR65 billion. This could easily be covered by tapping into the huge foreign asset pool of more than $450 billion in foreign assets managed by the Saudi Arabian Monetary Agency (SAMA). People tend to have short memories, hence we should not brush aside the fact that in 2008 Saudi Arabia registered its largest surplus in its history (SR590 billion) while other countries in the G-20 are trying to contain their budget deficits and some are even on the verge of receiving International Monetary Fund (IMF) bailouts.."  [more]

Saudi Arabia's 2009 Budget Overview

"..Saudi Arabia [Mon., Dec 22] announced an SR475 billion ($126.7 billion) economic stimulus budget for 2009, allocating more money for education and increasing public spending by 15.8 percent (SR65 billion), despite a sharp decline in oil prices that have dipped to $43 a barrel. Custodian of the Two Holy Mosques King Abdullah, who unveiled the Kingdom’s largest-ever budget during a Cabinet session at Khoraim Gardens, said a record SR225 billion has been allocated for new projects and SR122 billion is slated for education, training and scholarship. The king said the budget allocation for new projects in 2009 was 36 percent more than the allocations made in 2008.."  [more]

Consequences of the Oil Price Crash - Jean Francois Seznec

"Professor Jean-Francois Seznec of Georgetown University recently spoke with Todd Feinburg about how the crash in world crude oil prices is affecting oil producing countries. Seznec, fresh on the heels of a tour of the region, shares his insights through the Web site "Middle East Interviews," a nationally syndicated radio talk show hosted by Feinburg. They walked through the consequences of declining oil revenues and the prospects for future oil pricing in Saudi Arabia, Iran, the UAE and elsewhere."  [more]

In the News

Saudi Arabia to invest billions in public works – LA Times

"..Facing a global economic slowdown and plummeting oil prices, the government of Saudi Arabia is taking a page from President-elect Barack Obama's book and pouring additional billions of dollars into public works, even as the country expects its first budget deficit in six years. But unlike the United States, Saudi Arabia will be drawing from its substantial savings, rather than issuing new debt. Even though it is cutting expenses by about 7%, Saudi Arabia will invest about $60 billion in public works projects, nearly half of its $127-billion fiscal 2009 budget. The public works spending is projected to be about 36% higher than for the previous year. Much like Obama's plan to jump-start the U.S. economy by injecting capital into education and public infrastructure, Saudi Arabia is focusing on its schools, universities, clinics, waterworks, roads and telecommunications.."  [more]

Low oil prices mean less future supply - Saudi - Reuters

"..The steep fall in oil prices is causing "havoc" with investment plans in oil producing countries and jeopardises future oil supplies, Saudi Arabian Oil Minister Ali al-Naimi said on Friday. Naimi told a meeting of producer and consumer countries in London that oil prices, which have fallen by more than $100 a barrel from a high of almost $150 in July, were already too low to support some necessary investment in energy projects. "Today's price levels are wreaking havoc on the industry and are threatening current and planned investments," he said.."  [more]

Saudi Arabia: Women-owned restaurant -- a first -- debuts - LA Times Blog

"..Saudi Arabia this month marked the opening of its first restaurant entirely owned and managed by women, local media reported. But the establishment of this start-up business in the kingdom's Eastern Province did not come without complications. The designers of the project had to make sure that there would be no contact whatsoever between the female staff working in the kitchen and the male customers who visit. A "separation wall" will isolate the food pickup area from the kitchen to prevent contact between men and the 10 or so women cooking in the kitchen.."  [more]

Mile-high skyscraper is no great engineering feat, expert says

"..With the announcement by Saudi Prince al-Walid bin Talal that he intends to build a tower approximately 5,000 feet tall outside the city of Jeddah, Saudi Arabia, engineers and architects are once again asking how high skyscrapers can go. Design features such as a "buttressed core" or a giant pendulum can help correct the sway caused by high-altitude winds, and mass dampers can counteract the shock of an earthquake. "Structural engineering-wise, it's not even difficult," says one expert of the mile-high tower, which will be about twice the height of the current record-holder, the Burj Dubai, which is still under construction.."  [more]

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