Interpreting Middle East Economic News and Analyzing Market Trends

Category: Saudi Arabia

Saudi Arabia steps-up foreign land purchases to sustain its growing food security needs

Middle East oil-producing nations have long sought to guarantee their food security.  In a land that is mainly unable to sustain agriculture, these countries have been aggressively looking for alternatives to ensure their food security.  Saudi Arabia has been one of the most active in this area due to its large and rapidly growing population. 

In the 1980s it resorted to converting vast amounts of desert into farming oases.  This proved to be more costly than it had expected.  It has now started moving away from this strategy by slowly removing water subsidies to farmers and promoting a different and more sustainable model going forward; vast purchases of farmland in fertile countries.

   

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… Meanwhile, Saudi banks suffer from too much cash

It’s a terrible time to be a bank in the Eurozone.  Countries in southern Europe are stuck in a depression, banks all over Europe are stuck with too much bad debt, and recently a major loss of confidence after the public theft of Cypriot depositors.  Banks in Saudi Arabia, on the other hand, face a different challenge: what to do with all that cash?

 

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Egypt close to default and Bahrain one step away from junk bond status

Cyprus has been dominating the financial news over the past two weeks.  The crisis seemed to come out of nowhere and rattle financial markets.  There are many questions that come up with events like these.  One key question is, did this crisis really come out of nowhere?  Another key question is, how can we spot potential crisis in the future?  What about the Middle East and the GCC in particular, are there any trouble spots?

 

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US tells Iraq to stop allowing Iran supply flights to Syria over its airspace while it pushes ahead with arming rebels

It is no secret that the CIA has been helping the rebels in Syria.  Initially, the US gave the green light to Saudi Arabia and Qatar to send aid and military supplies to the rebels, but two years on and frustration growing, the US is becoming more aggressive.  As the US increases its support for the rebels, it is now asking Iraq to stop allowing Iranian supply planes to fly over Iraq in an attempt to halt Iran’s aid to Assad’s regime.  Will Iraq comply?  No.

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Riyadh, we have a problem!

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Gulf Cooperation Council (GCC)* countries continue to consume large amounts of water even though they are among the driest countries in the world.  Saudi Arabia, the largest of the GCC countries in terms of population and size realizes that something needs to be done.  However, tackling the main issue remains a taboo subject as we’ve mentioned in earlier posts.

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