Gen. David Petraeus, the retired four-star Army general and former head of the CIA, told CNBC on Thursday that Saudi Arabia is “gradually running out of money.”
Petraeus said the Saudi’s need their initial public offering (IPO) of the state-run oil company Aramco, to be successful. In December, the Saudis plan on releasing some shares of Aramco to the public in an effort to attract outside investors.
The IPO is part of Crown Prince Mohammad bin Salman’s “Vision 2030,” his effort to diversify Saudi Arabia’s economy and reduce its dependence on oil exports. Petraeus said Saudi Arabia’s budget deficits can be “anywhere from $40 to $60 billion” each year, depending on the price of oil.
When asked about other people’s criticisms of the crown prince, Petraeus said it was in the entire world’s interest to see “Saudi Arabia succeed” and to also see it “moderate” some of its practices.
Petraeus brought up the murder of journalist Jamal Khashoggi: “Certainly there have been some setbacks and missteps — some of them truly grievous, the horrific murder of Khashoggi being foremost among those.” Petraeus added, “at the end of the day, we all want to Saudi Arabia to succeed.”
Neither Petraeus nor the interviewer brought up Saudi Arabia’s war in Yemen, which could account for some of the Kingdom’s financial troubles. In 2018, Saudi Arabia ranked third in the world in military spending, behind only China and the US.
The war in Yemen will enter its fifth year in 2020, and the death toll has just reached over 100,000. This death toll only accounts for those killed by violence, not those who have died from starvation or diseases like cholera. A report released by the UN earlier this year says if the war ends in 2019, it will account for 233,000 deaths, 60 percent of those deaths being children under five.
Petraeus is currently the chair of the KKR Global Institute, a branch of the American global investment firm KKR. Petraeus said there is no KKR investment into Saudi Arabia he is aware of yet, and that the Saudis need to “regain the confidence of all the investors of the world.” But Petraeus did say KKR has invested elsewhere in the region and put $2 billion into the United Arab Emirates’ Abu Dhabi National Oil Company.