Saudi Aramco IPO Is Unlikely to Transform the Economy

(Bloomberg) --

Will the initial public offering of Saudi Aramco help wean the economy off its reliance on oil? That depends on the size of the proceeds and how the government decides to spend it, according to Bloomberg Economics. To maximize the growth impact of the Aramco sale, the windfall should be invested in domestic projects, with a large local content, while avoiding “white elephants.” Yet the government’s recent spending pattern has failed to meet these criteria: It has cut investment, increased current spending and shown a continued penchant for mega-projects.

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