Saudi economy is resilient, says World Bank expert

Updated 07 February 2016
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Saudi economy is resilient, says World Bank expert

WASHINGTON: Saudi Arabia has five years’ worth of reserves at current spending levels and oil prices, Shantayanan Devarajan, chief economist of the World Bank’s Middle East and North Africa Region said in an interview with Tass.
“The fact is that Saudi Arabia did not cut back its oil exports when the price of oil plummeted in late 2014 (and stayed low in 2015). From an economic point of view, this strategy is sustainable only if Saudi Arabia can manage its fiscal policy so it doesn’t run out of foreign exchange reserves. At current spending levels, the estimates are that it has five years’ worth of reserves,” the expert said.
“The Saudi economy is as resilient as it is able to make the fiscal adjustments to respond to low oil prices. They have already announced the reduction of fuel subsidies,” Devarajan added.
Oil prices accelerated the decline early in January against the decision of the Saudi Aramco to increase discounts on its major blends for European consumers.
Brent price dropped by nearly 30 percent below $28 per barrel in the first three weeks of January but recovered lately to $35 a barrel.
A recent report from Jadwa Investment said that the Kingdom has maintained a high level of spending in the 2016 fiscal budget despite the global environment of lower oil prices.
Education and health care remain the focus of government spending, accounting for 35 percent of total spending.


Mideast plays key role in Chinese export of armed drones, report says

Updated 17 December 2018
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Mideast plays key role in Chinese export of armed drones, report says

  • China has exploited America’s selective drone export policy to become an increasingly influential player in meeting demand
  • The report is entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region”

BEIRUT: The use of armed drones in the Middle East, driven largely by sales from China, has grown significantly in the past few years with an increasing number of countries and other parties using them in regional conflicts to lethal effects, a new report said Monday.
The report by the Royal United Services Institute, or RUSI, found that more and more Mideast countries have acquired armed drones, either by importing them, such as Jordan, Iraq, Saudi Arabia and the United Arab Emirates, or by building them domestically like Israel, Iran and Turkey.
China has won sales in the Middle East and elsewhere by offering drones — otherwise known as UAVs or unmanned aerial vehicles — at lower prices and without the political conditions attached by the United States.
The report , entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region,” said that by capitalizing on the gap in the market over the past few years, Beijing has supplied armed drones to several countries that are not authorized to purchase them from the US, and at a dramatically cheaper price.
“China, a no-questions-asked exporter of drones, has played and is likely to continue playing a key role as a supplier of armed UAVs to the Middle East,” it said.
The report explored where and how each of the states have used their armed drones and whether they have changed the way these countries approach air power. It found that Iran, the UAE and Turkey all changed the way they employ airpower after they acquired armed drones.
For Turkey and the UAE, armed drones enabled them to conduct strikes in situations where they would not have risked using conventional aircraft, it said. Iran developed armed drones from the outset specifically to enable to project power beyond the reach of its air force, which is hamstrung by obsolete aircraft and sanctions, the report added.
The report said it remains to be seen whether and how the loosening of restrictions on the exportation of armed drones by the Trump administration will alter dynamics in the region.
“Nonetheless, proliferation in armed UAVs in the Middle East is unlikely to stop and could, in fact, even accelerate,” the report said.