Vision 2030: how far has Saudi Arabia come?

Saudi Arabia has attempted to expand its economy beyond its traditional reliance on oil and hydrocarbons

ISLAMABAD:

The world is rapidly transforming in the 21st century where the rise of new variables continues to intensify political, economic and social divisions. At the same time, as a consequence of economic globalisation, the world has become more interconnected and interdependent. The traditional tools of engagement and influence cannot withstand the pressures of new demands from the contemporary world.

Saudi Arabia has responded to 21st century challenges by attempting to expand its economy beyond its traditional reliance on oil and hydrocarbons. This is evident from initiatives like National Science, Technology and Innovation Policy and King Abdul Aziz City for Science and Technology. These measures show that the country is striving to become a knowledge-based advanced economy.

Although the Arab Spring proved to be a catalyst for reform in the country, recent developments have compelled the Arab kingdom to opt for rapid economic and social transformation.

In anticipation of global and regional changes, Crown Prince Muhammad Bin Salman, started the transformation process by presenting his idea of Vision 2030, which aims to transform the conservative country into a modern state.

In line with Vision 2030, he understood that there is a need to diversify the economy and look for new ‘non-oil sectors’ that can contribute to economic growth and national development. This is also required with reference to the reality of climate change, pushing countries to move away from fossil fuels and towards renewable sources of energy.

Accordingly, Salman announced that Saudi Arabia will be working to increase the share of non-oil sectors in national Gross Domestic product (GDP) from 16% in 2016 to 50% in 2030 (SAR 163 billion in 2016 to SAR one trillion in 2030). The task will require tremendous efforts to shift from oil and create new sectors of the economy through diversification and avenues for export.

Vision 2030 has also made the goal of reaching the tenth position on the competitiveness index. In pursuance of this, Saudi Arabia will have to improve competitiveness and Ease of Doing Business (EODB) by taking practical steps, including comprehensive reforms. In this context, it is noteworthy that the Kingdom has allowed foreign investors to buy property in certain designated areas for the first time in history.

Crucially, to protect the country’s sovereignty, the crown prince has envisioned that it is necessary that the Kingdom diversifies its security linkages and defence production. Presently, Saudi Arabia meets its needs by importing 98% of its total defence products. The domestic share stands at only 2%. This makes Saudi Arabia highly dependent and vulnerable to any shift in global politics, as it is located in a conflict-prone region.

Saudi Arabia is also aiming to become a connectivity hub under Vision 2030. It will be investing almost $130 billion to restructure and expand airports, related sectors and launch a new airline.

In addition, Salman foresaw that there is a need to reform the existing foreign policy of the country. Regional politics and the desire of certain countries to gain influence at the expense of Saudi Arabia has further given impetus to these efforts. The country is trying to devise a balanced foreign policy that can ensure its sovereignty and territorial integrity.

It is crucial to mention here that the crown prince has timely identified the need to strengthen existing diplomatic linkages to withstand global pressure. For that purpose, he is maintaining friendly relations with China. The joint communique of the recent visit of President Xi to Saudi Arabia provides a glimpse of the strengthening of bilateral relations between the two countries. High level interaction as a result of exchange of visits from both sides has created new opportunities. In recent years, China has increased investment and exports to Saudi Arabia. Both countries have also enhanced their bilateral defence cooperation.

Pakistan is another close ally and friend. Salman is willing to take close relations with Islamabad to new heights by investing in CPEC along with other sectors of the economy. It is suggested that China-Saudi Arabia-Pakistan should try to make CPEC a symbol of their trilateral friendship.

In recent years, the crown prince has also extended the offer of friendship towards the traditional opponents of the Kingdom, keeping in view the need for regional stability. He also expressed on a number of occasions that Saudi Arabia, being the custodian of the Holy places, should lead the efforts towards finding a sustainable peace.

The transformation of Saudi Arabia under the leadership of Salman is praiseworthy. His vision of making Saudi Arabia a modern state without compromising on the national interest remains an example for other countries in the Muslim world.

The writer is a political economist and a visiting research fellow at Hebei University, China

 

Published in The Express Tribune, December 26^th, 2022.

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