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Thursday, Jan 20, 2022

Saudi Vision 2030

Saudi Vision 2030

Saudi culture is essentially Islamic, as Islam had taken birth in this region. Because of its Islamic heritage and its historical role as an ancient trade centre, its Bedouin traditions had a strong impact on history through the ages.
The Arabs shared a traditional and conservative culture based on a strong moral code and cultural values, such as hospitality, loyalty, and a sense of duty to support their community.

Before the advent of Islam, the Arab society was divided into small tribes engaged in internecine warfare. Though Islam completely revolutionised their thinking and beliefs, internally Arabs remained just as politically divided into tribes. In the arid desert, there was little agriculture to make animal fodder, and their main income came from Haj immigration and off-shore fishing rights.

In 1938, an American company drilled oil from Dammam, Saudi Arabia, which started its sale to foreign countries in 1945. Later in 1950, it came to be identified as the largest source of petroleum in the world.

Saudi Arabia, being the chairman of the OPEC group of countries, imposed an embargo on oil sale in 1973, which precipitated a massive fuel crisis in the US and other parts of the industrial world, which led the Saudis to acquire total control of the company, now known as Saudi Aramco. The very next year, the kingdom’s oil revenues reached a boggling $118 billion.

Prince Mohammad bin Salman, the youthful Crown Prince of Saudi Kingdom, on his way to becoming its de facto ruler, had two great desires. First, he wanted to bring widespread cultural changes in the primitive Arab society-from their age-old lethargy and poverty-, bringing them into a new light of knowledge and technology by allowing their women greater emancipation of movement and thought.

To show his mind, he has already allowed women to drive on the roads. To achieve these goals, he wanted to earmark an area in his country where not only reformation of society on these lines could be undertaken, but also new investors and industrialists could also be invited for introducing their trade and skills in the Kingdom of Saudi Arabia. It should be introduced to the world as a new international city with all facilities of science and technology. He dreaded opposition from the conservative Wahhabis, who were violently against modernism in any form.

The Prince thinks that reformative measures should be introduced gradually and slowly and in areas where opposition should be little or mild. Saudis cannot face wide-scale reprisals when society’s centuries-old ways of life are changed. He had in mind the example of Dubai, which had, only four decades earlier, encouraged the foreign investors by promising them all facilities for their trade.

This converted the arid desert of Dubai into a flowering international city, which is the hub of several tourist resorts, hotels, shopping malls, numerous beaches, and recreation spots that are found nowhere else in the world and where tired tourists take refuge to refurbish their energies. The Prince knows that earlier, Dubai had no wealth or attraction, but it still became the most visited resort in the world. On the other hand, Saudi Arabia is a sanctuary of Muslims who are more than one-third of the world population. Saudis are the chief custodians of the major oil wealth of the world, with immense resources, and have a more prestigious world trade route in the Red Sea. Thus, they are far better placed to rule the world today.

The Prince had fixed three goals to achieve by this enterprise: a vital society, a thriving economy, and an ambitious nation. His society was based on these three pillars. On these, he wanted to base his conception of Saudi Arabia’s Vision of 2030. He had announced his Vision in 2014, and since then, he is periodically taking meetings with his Cultural and Education Council regularly to review the progress of this project.

The growth in Dubai was necessitated by tourism, investment in infrastructure, political stability, and trade liberalization. The crown prince is an agent of change on a very big scale, and the conferences he holds indicates a very big signal about how rapid is the pace of change. Daniel Yergin, a prominent energy strategist who attended the conference, wrote in an email. “This is driven by the recognition that an economic model based largely on oil, which worked for four decades, is no longer sufficient when 70 per cent of the population is 30 years or younger, oil prices are volatile and the world is going digital. He is hoping to transform the kingdom from a petro-state into a diverse, productive economy. But the obstacles to economic changes are many, starting with a culture that often discourages risk-taking and innovation.”

To accomplish his Vision of 2030, a city Neom (a $500 billion cross-border large tract of land on the shore of the Red Sea) has been earmarked; set to join smart city technologies and work as a tourist destination.

The Prince, considering it as a gigantic task, wants to have enough finances from the Oil. He has realised that nearly two years after the start of the collapse in global oil prices, Saudi Arabia’s economy has clearly deteriorated and the outlook remains uncertain. The county’s fiscal deficit hit almost $100 billion or 15 per cent of the GDP last year. Saudi Arabia also recorded a deficit in the current account balance, which for the first time since 1999 reached $41 billion, or 6.4 per cent of GDP in 2015. This deficit is expected to rise in 2016 to more than $63 billion, or 10.2 per cent of GDP.

Prince Mohammad bin Salman is by temperament a Western-educated liberal having a modern outlook and is in favour of women’s emancipation. After seeing his dwindling oil economy, he formulated a council of cultural and educational reforms in 2016 and regular meetings are being held to review its progress.

Added to these complications and due to security risks from Iran, Yemen, and Syria, Saudi Arabia’s huge defence spending is her huge liability. Meanwhile, Saudi foreign reserves are declining at an alarming rate. Another threat to stability and growth in Saudi Arabia has emerged as pressure on the long-standing riyal’s peg to the US dollar.

Undeterred by this development, Prince Salman invited more than 3,500 private-equity investors, corporate chief executives, heads of global organizations, and government officials from dozens of countries; making Riyadh a hustling and bustling market of international business leaders studying the kingdom’s moneymaking prospects.

Above all, Saudi Arabia’s oil dependence has also led to structural inefficiencies such as rising unemployment among Saudi citizens and a heavily subsidized welfare system.

The hallmark of Prince Mohammad’s Vision is to expand Saudi Arabia’s economy away from oil through many social and economic transformations.
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