It has been a big week in Saudi Arabia and, as someone who has developed +$10B of high profile projects in that country, I have been getting asked about it. So a few thoughts.
First, there were uprisings in Tunisia, Egypt, and Bahrain. Then violence in Libya. And now there have been calls for a March 11 "Day of Rage" in Saudi Arabia. In response to all of this, King Abdullah has returned to Saudi from his post-surgery recuperation – and he has quickly released a +$35 billion package of reforms. All eyes are turning to Saudi Arabia and it has been a fairly tense week in the world's other magic Kingdom.
Regarding the announced reforms. These are mainly economic, not political, in nature. And you can expect them to be very successful in the short-term. They increase the salaries of government workers, move more of the population into government jobs, subsidize education, subsidize housing, and so on. The King is bringing a $35 billion sledge hammer down on the Kingdom's most immediate economic problem – the increasing unaffordability of life for significant portions of the population. And it will work. In a country of 23M, $35 billion is a big hammer.
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