The closing case explores the political economy of Saudi Arabia. For decades, Saudi Arabia's political system has relied on religious teaching for direction. The state controls much of the country's economic activity, and while per capita income is not unlike that of the United States, its distribution is uneven, unemployment is relatively high, and the potential for social unrest is a concern. The country saw some changes recently when King Salman bin Abd al-Aziz Al Saud came to power following the death of his brother. The new king immediately gave his son, Muhammad bin Salman, significant power. Crown Prince Muhammad bin Salman is using his new power to undertake significant economic and political reforms in the country, reforms designed to help better position the country in today's world. While some of the reforms have been applauded, others have met with strong resistance, suggesting that transitioning Saudi Arabia to a new place will not be easy. The crown prince has also come under fire for his potential involvement with the murder of journalist Jamal Khoshoggi. A discussion of the case can begin with the following questions: 1. Current plans for Saudi Aramco call for the state-owned oil company to be privatized. An initial public offering (IPO) is tentatively scheduled for 2021. What are the potential benefits to Saudi Arabia of privatizing Saudi Aramco? Is there a downside? 2. Is it morally correct for international businesses to invest in a country that denies basic rights to women? 3. Is it morally correct for international businesses to invest in an autocratic country where the current leader has been implicated in ordering the murder of one of his critics?
The closing case explores the political economy of Saudi Arabia. For decades, Saudi Arabia's political system has relied on religious teaching for direction. The state controls much of the country's economic activity, and while per capita income is not unlike that of the United States, its distribution is uneven, unemployment is relatively high, and the potential for social unrest is a concern. The country saw some changes recently when King Salman bin Abd al-Aziz Al Saud came to power following the death of his brother. The new king immediately gave his son, Muhammad bin Salman, significant power. Crown Prince Muhammad bin Salman is using his new power to undertake significant economic and political reforms in the country, reforms designed to help better position the country in today's world. While some of the reforms have been applauded, others have met with strong resistance, suggesting that transitioning Saudi Arabia to a new place will not be easy. The crown prince has also come under fire for his potential involvement with the murder of journalist Jamal Khoshoggi. A discussion of the case can begin with the following questions: 1. Current plans for Saudi Aramco call for the state-owned oil company to be privatized. An initial public offering (IPO) is tentatively scheduled for 2021. What are the potential benefits to Saudi Arabia of privatizing Saudi Aramco? Is there a downside? 2. Is it morally correct for international businesses to invest in a country that denies basic rights to women? 3. Is it morally correct for international businesses to invest in an autocratic country where the current leader has been implicated in ordering the murder of one of his critics?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The closing case explores the political economy of Saudi Arabia. For decades, Saudi Arabia's
political system has relied on religious teaching for direction. The state controls much of the
country's economic activity, and while per capita income is not unlike that of the United States,
its distribution is uneven, unemployment is relatively high, and the potential for social unrest is
a concern. The country saw some changes recently when King Salman bin Abd al-Aziz Al Saud
came to power following the death of his brother. The new king immediately gave his son,
Muhammad bin Salman, significant power. Crown Prince Muhammad bin Salman is using his new
power to undertake significant economic and political reforms in the country, reforms designed
to help better position the country in today's world. While some of the reforms have been
applauded, others have met with strong resistance, suggesting that transitioning Saudi Arabia to
a new place will not be easy. The crown prince has also come under fire for his potential
involvement with the murder of journalist Jamal Khoshoggi. A discussion of the case can begin
with the following questions:
1. Current plans for Saudi Aramco call for the state-owned oil company to be privatized. An
initial public offering (IPO) is tentatively scheduled for 2021. What are the potential benefits to
Saudi Arabia of privatizing Saudi Aramco? Is there a downside?
2. Is it morally correct for international businesses to invest in a country that denies basic rights
to women?
3. Is it morally correct for international businesses to invest in an autocratic country where the
current leader has been implicated in ordering the murder of one of his critics?
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