Saudi Arabia Faces Challenge in Enlarging Private Sector
This is a Mafia model. The owners are the House of Saud.
More after the jump.
"As Saudi Arabia moves to diversify its petroleum-centric economy and shrink its public sector, the government faces a hefty task in a crucial aspect of the plan: encouraging people to take jobs in private industry."
That is all you need to know nutshelled. This will indeed be a difficult challenge. The people of Saudi Arabia are not used to working for enterprises which demand things from their workers. Up till now the entire place has simply been run like a Mafia family. While the oil money flowed, and times were good, the House of Saud spread the money around like a goombah.
"For decades, the public sector has offered Saudis a deal that is hard to beat—high salaries for respected and often undemanding jobs-for-life, which explains why two-thirds of working Saudis are employed by the government.
But as the world’s largest oil-exporting nation reels from a two-year slump in oil prices, the Saudi government is under pressure to reduce the number of people on its payroll by encouraging them to work privately instead. That is a central focus of the Saudi Arabia’s National Transformation Program, a new five-year reform plan that was drafted under the supervision of the king’s powerful 30-year old son, Deputy Crown Prince Mohammed bin Salman."
The money flow has stopped, and the House of Saud is facing trouble in the form of unrest if it cannot quickly create a real economy, and persuade the Saudis to work in it. In most places economies are organically developed due to people desire to trade and invent. This has apparently never really happened in Saudi Arabia.
I cannot think of any reason it would start now, even with a bit of a jump start from the goombah.
Good luck to the House of Saud, this is a valuable endeavor, but I expect it will be supremely difficult.