Saudi Arabia expels Canadian Ambassador over Human Rights Detainees

[African Peasant]

I agree with this mostly actually and I think you got most of the political rationale behind it right.


The major risk I see, is related to future foreign investment. Foreign investment in Saudi is already relatively scarce and has shrunk further in recent years. Their unemployment rate keeps growing, theyre dealing with a youth bulge, have a disastrous education system, and badly need to diversify their economy. In order to have any chance at success in this, they will need to up foreign investment, and its hard to see how this helps. The only successful private sector businessmen in the country were already locked up and shaken down over the year (some are still in jail). The Aramco IPO looks like itll never happen. The big name projects like NEOM look like white elephants in the making.


This only adds to the idea its an unpredictable place where your $$ arent safe. People will always take Saudi investment and arms money with open arms, but it needs the investment flows to go both ways for any hope to diversify.

You're right about those things. But those are structural issues SA is facing.

However, the fight with Canada is not causing these things nor substantially increasing them.

Saudi is not attacking investors at home or nationalizing their assets. They are in a diplomatic fight with Canada. And there is nothing unpredictable about it. SA always been sensible about critics relating to human rights. Like I said, SA is just sending a stronger message: don't interfere in our internal affairs. But it's not new. Investors don't care about human rights in SA.

 

[thatrapsfan]

You're right about those things. But those are structural issues SA is facing.

However, the fight with Canada is not causing these things nor substantially increasing them.

Saudi is not attacking investors at home or nationalizing their assets. They are in a diplomatic fight with Canada. And there is nothing unpredictable about it. SA always been sensible about critics relating to human rights. Like I said, SA is just sending a stronger message: don't interfere in our internal affairs. But it's not new. Investors don't care about human rights in SA.

I agree investors do not care about human rights, but they do care about rule of law ( i.e. their investments being protected) and political risk. While this story will not impact any of the major structural factors, it does add to the impression that the Saudi political leadership is profoundly unpredictable and that is a relevant.

There's a reason MBS spent so much time and money over the past two years promoting the image of a modernizing Saudi in business forums and mediums (Davos, Bloomberg, Economist etc) This, along with the crackdown preceding it, seems to work against that effort. The elite crackdown, did effectively nationalize the assets of the few succesful private firms in the country, and expropriated assets from a firm that has foreign exposure (Bin Waleed's company).

I do concede though, that this isnt *that* relevant in the big picture considering the limited trade between both countries.

 

[MVike28]

Well Trudeau just confirmed MBS can get the entire fukk outta here

he ain't backing down

fukk em!

Almost 700k expats left Saudi over the last year. Keep digging a hole.

 

[MVike28]

The nerve of Gulf nations to talk shyt.

Saudi/Kuwait/and to a lesser extent the UAE during the first Gulf War expelled expats from Sudan, Yemen, Jordan because their heads of state didn't back the coalition at the time.

If that ain't a direct provocation I don't know what is.