Having largely sat out the 2011 Arab Spring protests, Saudi Arabia and Iran are facing challenges now. Just days after higher fuel prices and a value-added tax introduced under the young Saudi crown prince's ambitious reform program proved unpopular, Saudi King Salman ordered extra pay for government employees and soldiers at a cost of $13.3 billion (EC Jan.5' 18). This week also saw the detention of 11 princes said to be protesting a halt in state payments covering their utility bills. The twists and turns raise wider questions about the Saudi Aramco initial public offering - the timing of which sources say has drifted to first-quarter 2019 from second-half 2018 - namely, just how comfortable will foreign investors be with the possibility of the state backtracking, and how much confidence will they have in the kingdom's underlying stability? The ongoing war in Yemen and this week's threat by Houthi rebels there to shut down Red Sea shipping lanes only add to the uncertainty surrounding the kingdom's investment appeal.
展开▼
