Quo Vadis: politics, uncertainty and Saudi Aramco

The focus of this article is the political economy surrounding the proposed sale of Saudi Aramco. The Saudi power reshuffle has resulted in unprecedented military, financial and political risk taking to carry out the Crown Prince's 2030 vision. This has shattered a long-standing consensual alliance between various tribes and branches of the royal family, which is scrambling to fight back. Examining various valuation scenarios and their drivers, this article argues that the eventual sale would reduce the Kingdom's resource dependence, and end the crowding out of initiatives that are characteristic of endowed richness. Putting Aramco under a global microscope automatically leads to improved legal and geopolitical conditions. Whether Aramco undergoes an initial public offering or backs a debt facility for funding, steps undertaken by the Kingdom have put one foot forward on an irreversible mechanism that will lead to a bigger voice for the burgeoning Saudi middle class that is seeing its time to rise. Delays simply exacerbate the unsustainable status quo.