Saudi Arabia Business Spat Threatens Riyadh Bid to Be Middle East Boomtown

Eight months ago this sprawling desert capital seemed poised to take on the mantle of new Middle East boomtown.

Flush with $450 billion in foreign-exchange reserves, the Saudi government kicked off a massive spending program to mitigate effects of the global economic downturn and loss of oil revenues.

Officials knew 2009 would be a tough year but unlike neighboring Dubai at least they could boast of healthy banks. Bankers were touting Riyadh as the next financial frontier.