It’s not really the focus of today’s video, which I wanted to keep light, but it really is fucking outrageous what the Defense Department is trying to pull off with its new National Defense Strategy. The Pentagon continues to use terrorism as a blank check for assassinations, kidnappings, and hyper-militarization in dozens of countries all over the world. The Pentagon has used it to scare the US public for decades now. They want to keep doing all of these things. But now that terrorism is fading, they want to perform a magic trick, keep all their money and toys, and continue with business as usual.
And they’re getting away with it. Washington, DC is super absorbed with talking about how much it hates Donald Trump, but is acting with surprising unity. Trump has started a trade war with China. The Department of Justice is pursuing cases against Chinese businesses with unprecedented and shocking vigor. The recently vacating “adults in the room” at the Defense Department were obsessed with China too. Every media group lightly poo poos Trump’s treatment of China… and then jumps on the bandwagon to talk about how scary and sinister China is. It’s outrageous really. Sigh.
Well at least we’re attempting to hold them accountable. Spill your glass for the War on Terror. It was a terribly wasteful and pointless way to spend a couple trillion dollars and a couple million lives.
Today’s video tries to present the relationships that Saudi Arabia has with Turkey and Indonesia. I don’t really do much of this on this channel, unless we’re talking about one of the world’s great rivalries, like Saudi Arabia vs. Iran. That’s too bad. Almost all of the videos on this channel deal with the way the United States relates to some other country. That’s only natural, as I am a US citizen, and all of us are living in the shadow of the world’s most powerful country to some extent. But I think a lot of valuable detail gets left out if we just focus on the relationships between the US and other countries. And that detail is only getting more important.
Power is flattening. The old imperial model, and the early US world system lent itself to a “hub and spoke” approach. Colonized or just weaker countries tended to have one all important relationship, and then lesser ones with neighbors or other countries with which it had some kind of historical connection. Nowadays more and more places are getting rich, and therefore their relationships are getting a lot more complex. Business and cultural ties can strengthen for a wide range of reasons. Everything’s getting a lot more interesting. I hope to do what today’s video does more often, and cover more relationships between countries outside of the context of the United States.
So let’s talk about King Abdullah Economic City. In today’s video, I may give the impression that it doesn’t exist. It totally does! It was established in 2005, and much like NEOM, the mega city the Saudis are currently pushing, it was supposed to revolutionize everything!!! 13 years later only about 15% of the 100 billion dollar city has been built. The other three cities that were meant to be built at the same time are somewhere between 30% and 0% completed. Theirwikipediapages make for some depressing reading. Depressingly familiar reading.
The objective of SAGIA’s “10 x 10” program, which ran from 2005 to 2010, was to place Saudi Arabia among the world’s top ten competitive investment destinations by 2010.
Launched in 2006, the Economic Cities program was designed to drive toward greater competitiveness, job creation, and economic diversification.
In developing economic cities, over a thousand of the world’s free zones were surveyed. The sixty deemed most successful were studied to determine key success factors. The objectives of the Economic Cities were to promote regional development, achieve economic diversification, create jobs, and enhance competitiveness in Saudi Arabia. Four new cities were identified and thus developed: King Abdullah Economic City, Jazan Economic City, Prince Abdulaziz Bin Mousaed Economic City, and the Knowledge Economic City, Medina.
When you read some of this 15 year old public relations copy, you realize just how familiar it all is. It’s the same thing as Vision 2030, but it’s Vision 2010. It’s all very sad. Back in King Abdullah’s time it was possible to imagine that Saudi Arabia could pull it off. Their oil was still one of the most valuable commodities in the world. An Aramco IPO back then would have yielded hundreds of billions of dollars. Instead the economic cities plans just sort of fizzled out during the extraordinary expenditures the government made to bribe the populace out of an Arab Spring. After Abdullah died in 2015, the focus shifted to new projects.
A sensible ruler ca. 2015 would have recommitted to all the plans Abdullah had made, and brought them to fruition. It would have made a lot of sense. But that wasn’t ambitious enough for King Salman, and Crown Prince Muhammad Bin Salman. They are diverting scarcer and scarcer funds to all of their new cities, and losing investments in foreign companies. They’ve gotten a lot of uncritical support in the Western Press, but that’s because they are paying for it. So yes, the King Abdullah Economic city exists, as a shell of what it could be. The bottom third is the only section of this BBC article on King Abdullah Economic City that is worth reading. After repeating the standard public relations texts, it lays out what a disappointment the project has been. NEOM might get there too. But it won’t ever become what was promised. Today’s video lays out why.
So why am I the only guy talking about this? In today’s video I connect a bunch of dots to point out that Saudi Arabia’s investment program isn’t going to help them out of their current mess. In fact that investment program is more than a bit nuts. Funds that are desperately needed to reinvent the country are being sent to some of silicon valley’s riskiest money pits. It’s possible that these investments will make some money eventually, but it isn’t what I’d call likely.
The truth is that all of this information is out there. Today’s video wouldn’t be possible without some great financial journalism done by folks at Bloomberg and the Financial Times. The FT’s “Saudi Sovereign Wealth Fund Scrambles For Resources” in particular was very useful. But this stuff is often behind paywalls, and only read by nerds like myself. This information is all out there, and it’s being acted on by serious investors. That’s why that magical city, NEOM, isn’t going anywhere, and its German CEO has already been shuffled off to another job. That’s why the Saudi-Blackstone infrastructure fund announced at the Saudi-Trump orb fest last year can’t find any other investors. The broader situation really is dire, far beyond the headline grabbing problems with Tesla and Uber.
This is a slow motion catastrophe. But it hasn’t made much of an impact on the broader consciousness yet. That’s because the Saudi PR machine is still working in high gear. Bloomberg, FT, and occasionally the New York Times will follow up on all these projects and their failings, in articles that are only read by a few tens of thousands of people. But when a new project is announced it’s in ALL the outlets, with videos, puff pieces, and endless social media placements. The more disturbing facts are all out there, and I’m proud that I got to bring them to you with today’s video.
Full disclosure: I own some Tesla stock and I’m actually pretty bullish on the company’s long-term chances. If Elon Musk can get his head on straight that is. That doesn’t mean it’s a good investment for Saudi Arabia…
One of the most important aspects of development in Saudi Arabia, and in the Gulf more broadly, is the fact that it often doesn’t happen. The Gulf countries are mostly run by monarchs, and they all have pharaonic ambitions. They want to build monuments, cities, and other great works that illustrate their magnificence. If it’s something as simple as a museum or giving a foreign university a local campus it happens. But the great ambitions that mix local development, innovation, or anything else that requires real buy-in from the people of the country, either never happen, or happen in such a small way as to make the initial announcements look ridiculous.
When NEOM, the 500 billion USD sustainable city was announced, I couldn’t help but think of the UAE’s Masdar city. It was announced with similar fanfare back in 2006. It was going to be green, it was going to be amazing, there were going to be tons of people there! Parts of Masdar did end up being built, but most of the plan was scrapped, and the Guardian now describes it as in danger of becoming a ghost town. Masdar isn’t the only hi-tech wonderland city that never was. Saudi Arabia has one too. Anybody remember King Abdullah Technology City? It was the last king’s NEOM. It was still moving along, or at least reported to be so back in 2015.
And that’s the important bit here. All of this constant churn of projects seems to be done more for a foreign press audience than to create real change in Saudi Arabia. I don’t doubt the sincerity of any of the Saudi Royal reformers, I just doubt their ability. The world press gives them a free pass on all of this. Almost none of the articles reporting on NEOM mentioned King Abdullah city or Masdar. Actually, now that Abdullah is dead, his city seems to have disappeared from the news completely. It’s clear that it’s now longer a public relations priority, and I’d guess that the 100 billion that is supposed to build that city is now quickly moving on to MBS’s NEOM. This is not a good way to run anything. But the Saudis get a pass from the world press. Today’s video, on the ridiculousness of the Saudi Aramco IPO is an attempt to push back on that a bit.
Over the past year Saudi Arabia has experienced a perfect storm of factors in its favor. Asset prices in the US economy and elsewhere have gone nuts. Saudi Arabia is a country that owns a lot of stock, land and everything else, so that’s been very helpful. On the oil market front, the most important front there is for Saudi Arabia, they’ve had unprecedented cooperation on the OPEC production slow-down, and a series of competitors have given up millions of barrels a day in production due to sundry wars and dictatorships.
If Saudi Arabia’s ambitious plans for the future were ever going to work, 2017 would have been the year for it. But as this video shows, some of the key metrics that illustrate the hole Saudi Arabia is in haven’t changed much at all. As I said in last year’s video, and as I repeat in today’s video… Saudi Arabia is still finished.
I wanted to address another aspect of the comparison between Pakistan and Turkey that the cursed article I talk about in today’s video mentions briefly. The article does concede that Pakistan’s dictator led Islamification under Zia ul-Haq was a completely different example than the attempts at Islamification currently being carried out by Turkey’s elected president Erdogan. As I point out in the video, Pakistan remains desperately poor today and this was even more the case in the 1980’s. Zia was using Islam as tool for nation-building. It remains a key part of Pakistan’s sense of itself as a nation today.
As I laid out in my other twovideos on Islam in Turkey, Erdogan does not have the blank slate to work with that Pakistan’s Zia did. Pakistan of course, unlike Saudi Arabia, has an endlessly rich and varied history. But very few among a population that mostly couldn’t read, and was living on the brink of starvation, were able to benefit from that history and culture. Turkey has a very distinct sense of nationalism that is quite separate from Islam, and that is internalized across the population. No matter how powerful Erdogan becomes, he will not be able to eradicate those underpinnings.
Spanish history really is amazing. As someone from the United States, who has spent a fair amount of time in the Middle East, I tend to focus on British and ancient history. Last year my family took a trip to Spain and Morocco and I really got a sense of what I’m missing. Spain has its roots in a fascinating conflict and mixture between Roman, Medieval Christian, and Islamic cultures. The Crusades focusing on Jerusalem, a much more transitory affair, get a lot more press. Which seems nuts. You’ve got to go back to 1961 and the surprisingly woke, and gloriously bloated, Charlton Heston film El Cid to find a treatment of the Spanish Reconquista in popular culture.
This is a shame, because it’s an incredibly epic story. You’ve got Medieval culture clash that literally ends the SAME YEAR, 1492, as a new and even more momentous clash between continental civilizations. The Crusades don’t have the conquest of a continent as their aftermath. The lack of coverage may have something to do with the fact that Spanish history, and Latin American history hasn’t always been the happiest. Here’s hoping that that changes in future years. I’m definitely excited to do some more work on the topic, and I am super excited to be covering it in this week’s video…
The fall of Christian Constantinople to the Muslim Turks is one of the most significant events in Eurasian history. Some use the date it happened, 1453, as the break point between “Medieval” times and the “Early Modern” era. The threat of the Ottoman Empire was an important thing too. It motivated a lot of the state consolidation and military advancement that gave us modern Western Civilization. The threat of “the Turk” is long passed, but we don’t challenge the basic assumptions that that struggle has left us with. We don’t need the dream of a fallen Constantinople for propaganda purposes anymore. We should acknowledge what actually happened. That’s what this week’s video aims to do.
You all may have noticed that I consciously avoid the term “Byzantine Empire” here. The Byzantines did too. In fact the term wasn’t even invented until centuries after they had gone. They knew themselves as Romans, so that’s how I try to refer to them as well. This confusion has its origin in a bit of archaic racism. The Enlightenment thinkers that drew European History together didn’t like the Greeks much. For them Rome was based in Rome. It was the great civilization of Cicero and Augustus, it spoke Latin and it ended in 476.
The Western bits of the Empire did in fact fall in 476. But the Eastern Half had a full 1,000 years of history ahead of it. The Western European historians of the 1700s found this kind of thing distasteful. Altogether too Eastern. The Eastern Roman Emperors, with their constant murdering of each other, their pretensions to imperial divinity, and tasteless bling weren’t really their sort of Romans. So they invented a whole new name for them, the Byzantines, based on the original Greek name of Constantinople. I’m a big fan of Rome, and I have some of the same prejudices, but I don’t feel the need to distinguish the way the folks in the 1700s did. So I tend to use the term “Eastern Roman Empire” rather than “Byzantine Empire”.
History can be used as a weapon. There are a lot of people in my YouTube comments, and in the US at large, who have some weird ideas about Islam. The things they know aren’t necessarily wrong, but the conclusions they draw are. This is a problem that comes up again and again in contemporary political discussion. The more context you have, the more you realize that individual facts don’t tell you as much as you think they do. This video, and the next couple I will be producing, aim to provide the context necessary to better understand the darker aspects of world history, and Islamic history in particular.