At the summit of the Gulf Cooperation Council that was held in Abu Dhabi in 1983, the Crown Prince of Saudi Arabia at the time, Abdullah bin Abdulaziz, issued a warning to the leaders of the Gulf countries where he said: “Oil prices have deteriorated to $9 a barrel… The era of affluence is over and will not return, It’s time to tighten your belts.”
However, oil prices rose until it reached $100 a barrel, and this continued for several years, after which Abdullah assumed the position of the king and lived in luxury until he died after supporting Arab tyrants with his money. Soon after that, the Kingdom went through a global decline in oil prices in 2020, due to the spread of the Corona virus.
This caused the largest economic crisis in the Saudi history, as with the spread of the pandemic, all trips to Saudi Hajj and Umrah stopped, which contibuted further to the economic crisis of the country.
These crises came at a time when Trump, the former US president, drained the kingdom’s money under the pretext of protecting the throne of the House of Saud, and the Saudi Crown Prince Mohammed bin Salman pumped billions of dollars into the Neom desert under the pretext of diversifying the kingdom’s economy.
These crises resulted in more taxes being imposed on citizens by the state. Currently, the Kingdom is facing severe crises, due to the oil decline and the failed Neom Project from which he had forcibly dsplaced wners of the lands.
Another financial crisis was caised by the open war waged by the Saudi regime on Yemen under the pretext of stopping the Shiite influence of the Houthis in Yemen, which caused enorous humanitaran crisis and killed hundreds of thousands, displaced many civilians, and continues to drain the Saudi economy.
All these crises recorded a budget deficit in the first quarter of 2020 of $9 billion, compared to a surplus of $7.4 billion in the first quarter of 2019, with expectations of severe negative impact on the Saudi economy in the coming periods.
Saudi institutions expected the budget deficit to expand to 332 billion riyals, approximately $88 billion, and it expects the Kingdom to continue to finance most of the deficit by debt.
The Saudi Ministry of Finance also expected the deficit to rise to 9% of GDP, but some international financial institutions expect a deficit of up to 23%, if the price of Brent crude oil drops to $ 20, which means that the rate of depletion of foreign currency reserves will be fast , which will be linked to debt to GDP.
