Saudi Arabia has adopted strict austerity measures to combat the dual effect of falling oil prices and the coronavirus crisis. Unlike previous measures that were lifted when oil prices recovered, a July 1 VAT increase (from 5% to 15%) is more likely to stay in place, which could present challenges to low-income families, businesses, and plans to revive domestic tourism.
This post is part of an AGSIW series on Saudi Vision 2030, a sweeping set of programs and reforms adopted by the Saudi government to be implemented by 2030.
On April 25, Saudi Arabia’s young deputy crown prince, defense minister, and head of the Council of Economic and Developmental Affairs, Mohammed bin Salman (MbS), boldly outlined for a Saudi domestic audience Saudi Vision 2030, the government’s plans for a future without oil. In doing so, he laid down the markers for a new Saudi Arabia, and made an appeal to the next generation to take up the challenge and get to work.
In 2011, a wry young blogger noted that the average age of the ministers governing the kingdom was 65, while the average age of the population was 19. The ascension of King Salman bin Abdulaziz, accompanied by the increased prominence of his son and recruitment of a younger and more technocratic Cabinet, has brought a tangible shift in generation and sensibility. Both the message and the medium of delivery of Saudi Vision 2030 is novel: a clear policy direction presented by a young prince sitting down for an interview on Saudi television.
The directness of MbS’ responses and his emphasis on transparency and periodic performance evaluations of government bring a new aura of business and accountability to the kingdom that is crafted to resonate with younger Saudis raised on the open communication of social media. Still, a transformation along the lines proposed in Saudi Vision 2030 will demand much more of the new generation of Saudis. Will they buy the sales pitch?
The New Look of Saudi Vision 2030
There is no denying the ambition in Saudi Vision 2030. Economically, it centers on the rapid expansion of Saudi Arabia’s small sovereign wealth fund, the Public Investment Fund, to utilize as a catalyst to spur greater domestic and international investment. Initially the PIF’s funds will come through the public sale of a less than five percent share of the Saudi national oil company, Aramco, and through the transfer of state-held urban public lands for use in large-scale development projects. The investment strategy will build upon Saudi Arabia’s advantages as a heartland of Arab and Islamic history and culture, and as a trading hub geographically situated as a crossroads for three different continents. The recent meetings in Egypt that resulted in the return of two islands to Saudi Arabia and discussion of a bridge between the two countries hints at the huge investments planned to realize these conduits of commerce and influence.
While this model of state as investor and land developer has been pursued across the Gulf region, most notably in Dubai, its pursuit on this scale is new for Saudi Arabia, which has heretofore followed more conservative policies. Up until the last decade, Saudi Arabia did not have the abundant surplus revenue of some of the smaller Gulf states, and concentrated its foreign reserves in secure investments, predominantly U.S. treasury bonds. The clash between bold vision and customary caution were on full display in the back and forth of the interview conducted on the Saudi television station Al Arabiya between the young prince and the veteran journalist Turki Al-Dakhil.
Dakhil began the interview alluding to the public patrimony of Saudi’s oil resources, and the controversial public sale of Aramco. “Will you not be breaching the sacred?” he asked. MbS responded, forcefully attacking this line of thinking, stressing the need for Saudi Arabia to move beyond this “addiction to oil.” He then pointedly noted that his grandfather’s generation established the country and defied British colonialism without the benefit of oil, “just as men.” He repeatedly challenged Dakhil, and through him, the Saudi audience, to think of oil as an investment – a resource for action, not a source of dependence. While Dakhil repeatedly brought the discussion back to bread and butter issues for Saudis – the elimination of subsidies and government jobs, the need for housing – MbS reached for the broader vision, stating, “Our ambition will overtake these problems.”
Saudi Vision 2030 and Youth
That ambition is at the center of the youth appeal of Saudi Vision 2030, and indeed, of the young prince himself. The program speaks to the historical significance and potential power of the Saudi nation and of the obligation of Saudis to contribute to that realization. Allusions to Saudi Arabia as the heartland of Arab and Islamic civilizations, a global investment powerhouse, and a home to globally recognized cities appeal to national pride and youth aspirations.
Saudi youth are thus a natural constituency for the MbS-led transformation program, and not surprisingly, there have been concerted efforts to reach out to them. Youth social media personalities were present at the unveiling of the plan, and others have been recruited for positions within the transition team. The Ministry of Culture and Information under the new leadership of a young and liberal journalist, Adel Altoraifi, has been courting Internet-based entertainment groups popular with Saudi youth.
Still, it is far from clear that the Vision will deliver the most fundamental necessity for young Saudis: jobs. While cutbacks in government subsidies and government employment are certain, the expected growth in private sector jobs is not. Key sectors targeted for growth – mining, defense manufacturing – are not likely to employ many Saudis. Large-scale infrastructure projects also employ mostly foreign workers and, despite government pledges to continue their expansion, there is evidence that some state contractors are facing cash flow problems. Recently, the Bin Laden group, one of Saudi Arabia’s biggest construction conglomerates, has faced angry protests by workers awaiting back wages after 77,000 employees, nearly half of its total workforce, were laid off. The plan to offer permanent residence to some foreign nationals that would allow the holder to own property and undertake commercial activities may encourage more investment, but it may also hinder the expansion of Saudi professionals in the workplace.
The Vision appears to be compensating for reduced government support for the next generation with the promise of a broader socioeconomic transformation that would open new avenues of participation in the economy and public life. The development of domestic tourism invites Saudis to explore their country and history. The expansion of NGOs and volunteering opens up the very limited space for civil society. And the cultivation of entertainment and culture addresses one of the chief complaints of Saudi youth: boredom. All imply a loosening of the sociopolitical strictures that stifle social interaction and global engagement. It would also mark a reversal of some security-minded policies of the past five years that shut down many independent social initiatives and gathering places popular with youth activists. The new openings could facilitate connections that nourish the creative economies valued by many tech-savvy Saudis.
There are indicators that changes may be forthcoming. Under the late King Abdullah, women were permitted to work in retail and hospitality and were granted certificates to practice law. In December 2015, the Council of Ministers released a new law for civil associations and organizations. And long-discussed restrictions on the purview of Saudi religious police were enacted in April. Still, no one should underestimate the challenge of opening up a society strictly patrolled in equal measure by an authoritarian government maintaining control and religious movements jealously guarding their privileged access to shaping youth education and socialization.
Islamist Reaction to Saudi Vision 2030
Saudi Vision 2030 and the interview with MbS imply changes that will threaten the privileged position of the religious establishment in government and of religious movements in society. The educational sector represents a stronghold of Islamists that may not be relinquished without sacrificing significant economic power and political influence. Past efforts to change the curriculum have been sharply contested, and current proposals to adapt to the demands of the economy by cutting back on religious education will likely meet the same resistance. The emphasis in Vision 2030 on religious tourism may be welcome; however, the crown prince’s suggestion of developing historical sites predating Islamic history and Arab culture goes well beyond the orthodoxy enforced by Saudi Salafi unitarianism. More generally, the opening of the economy and social life beyond the narrow avenues defined by these Islamist actors threatens their influence over the next generation, and thus their future. Resistance within some quarters of these influential players is certain and could shape the pace and direction of reforms.
Formally, the institutions of official Islam have voiced their support for the government and its programs. The heads of the Organization to Promote Virtue and Prevent Vice and the Council of Senior Scholars praised Saudi Vision 2030 and the king’s promotion of development in line with the fixed principles upon which the kingdom has been built since its founding. Both made special note of the strengthening of Saudi leadership in the Islamic and Arab world, and indeed this aspect of the development plan may be important in rallying conservative support.
Some of the leading “media” sheikhs also have been courted by the royal court; the popular Salafi preacher Mohammed al-Arefe posted pictures of himself meeting with MbS and offered his blessings for the success of the plan. However, the Twitter feeds of some leading activists among more independent Islamist networks were less forthcoming. One influential leader within Muslim Brotherhood-influenced networks tweeted the text of the MbS interview, but no commentary, even when prompted for his views. Others within the competitor Sururi networks did not address the announcement at all. Islamist activists may have been chastened by the detention of a popular sheikh, Abdelaziz al-Turaifi, who criticized the paring back of the power of religious police.
Reformist youth activists who have emerged from within Islamist networks were more vocal than other social groups in debating the pros and cons of Saudi Vision 2030 on Twitter. Most voiced a cautious optimism, praising MbS’ directness and calls for transparency, but predicting it would all come to naught without popular accountability through elected parliament, political associations, a free press, and trade unions.
Youth and the Coalition for Change
By becoming the public face of Saudi Vision 2030, MbS is championing necessary reforms in the kingdom, but also taking on the political risks of failure. Not far from Saudi Arabia’s borders is another son of a king who tied his ascendance to a project of economic transformation. Bahrain’s Crown Prince Salman bin Hamad likewise appealed to technocrats and a youthful constituency in pressing hard for governmental reform and economic liberalization. For a time, the crown prince’s Economic Development Board, established in 2000, held superministerial powers over the operations of the government led by his uncle, the prime minister. While the program had notable successes in attracting foreign investment and reforming the labor market, it was unable to sustain momentum in the face of bureaucratic resistance and ultimately, political unrest. While Saudi Arabia’s challenges differ from those of Bahrain, the relative success of the reform project may also ultimately hinge on the strength of the coalition for change and the political ingenuity of those championing it. If Saudi Arabia’s youthful population is given the space to contribute and the means to prosper, so will the kingdom.
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