The outlook for Gulf privatisation.
In a new age of austerity after the 2014 oil price collapse, the state-driven growth model in Gulf Cooperation Council (GCC) states has reached its limit. All GCC governments are pushing the private sector to contribute more to national investment, the provision of public services and the diversification process. Privatisation plays a critical role in the austerity drive, but the political economy of the GCC distributive state makes conventional privatisation strategies difficult to implement.
Economic demand -- including for privately provided services and infrastructure -- will depend on state spending for the foreseeable future.
Full-out privatisation of key industrial assets is unlikely, as these fulfil critical public policy and development functions.
Saudi Arabia's massive planned Aramco IPO faces many stumbling blocks, and may end up being a much smaller, 'downstream only' sale.
