surely, saudi arabia is already working partly as an investment in activities other than oil. Do we have a measure of how well those investments have worked so far ?
i mean, investing requires skill, and you can get burned if you're not really smart and knowledgeable and agile. All things in which many states ( not just oil states) are not very famous for.
Saudi Arabia recently signed a licensed-production deal with Antonov of Ukraine. The first batch of transport aircraft will go to the air force but it's a huge step for a country that has traditionally outsourced everything to do with aviation.
I live in the Gulf right now, and hang out with investment professionals occasionally. The prevailing opinion appears to be that local investors are shrewd at a tactical level, but terrible at long term planning because of a tendency to go after flashy, high risk/high return prestige projects.
There is also the distinct lack of local sophistication: almost all investors are reliant on non-local agents for due diligence and investment lead generation. I guarantee that this is going to come back to bite them down the road: incentives need to be aligned, and right now, they simply aren't.
If you look at the staff of the various SWFs, they're mostly western citizens. There are various Arabization programs afoot, but the dearth of local talent to manage these massive pools of cash means that most of these programs are DOA. For the forseeable future, they'll be reliant on western/foreign expertise and talent to get most foreign deals done.
I suspect that the same thinking that causes them to hire cheap migrant labor to build out their infrastructure operates at a higher form where finance is concerned.
It'll be interesting to see where these programs go over the next few years.
i mean, investing requires skill, and you can get burned if you're not really smart and knowledgeable and agile. All things in which many states ( not just oil states) are not very famous for.