Saudi Arabia's Vision 2030

"Visions" are proliferating in the Arab sheikhdoms for quite sometime. The UAE embarked on "Vision 2021", Qatar unfolded "National Vision 2030", Kuwait unveiled "Vision 2035", and Oman came up with "Vision 2040." Saudi Arabia was last in line to showcase its "Vision 2030" in 2016. The Saudi 'Vision' shares the hallmarks of all the other 'Visions' of economic planning and industrial and labour policies.

All these 'Visions' are driven by the urgency to steer their economies off the rentier paradigm based on fossil fuel wealth, which is increasingly becoming vulnerable on account of unprecedented volatility in oil market and global economies moving from fossil fuels towards innovative and increasingly cost effective and environment- friendly renewable energy technologies applicable in industry, housing, transportation, energy and other fields. Saudi Arabia's Vision 2030 capitalises on its unchallenged standing as the 'heart of the Arab and Islamic worlds' and its geographical advantage to connect Asia, Europe and Africa. The Saudi 'Vision' sets out targets for diversification and improving competitiveness. It is said to be built around three principal themes which set out specific objectives that are to be achieved by 2030. These are: (i) a vibrant society or a society that is strongly characterized by, among other things, growing urbanism, culture and entertainment, sports; (ii) a thriving economy or a non-oil exports economy; and (iii) an ambitious nation.

The deliverables also focus on the progressiveness of Saudi government by increasing the ratio of non-oil revenues and improving overall government effectiveness. The primary goal is to increase the non-oil business sectors such as tourism, banking and Information Technology.

The Gulf Cooperation Council (GCC) 'Visions' have got such a lot in common. The Saudi Vision 2030, in line with GCC 'Visions' tradition, has spectacular infrastructure at the core of the programme. Chief among these mega projects is Neom, a gargantuan planned city larger than all of Kuwait with a special economic zone that is supposed to focus on biotech, robotics, and green energy. It is being built on the Red Sea in the north-west Saudi Arabia. It is said that in Neom people will see flying cars and taxes and some sort of an artificial moon.

Saudi Arabia's Vision 2030, like other Arab 'Visions', is relying heavily on new megaprojects and ignoring regional advantages in research and education.

However, GCC 'Visions' while offering a spectacular façade, tend to deliver few tangible economic results. Productivity in the Gulf is flagging, unemployment and government deficits are becoming a matter of concern. The region needs to balance its quest for mega projects and immense military spending with focus on low-productivity, high-volatility industries like tourism and its regional competitive advantage in higher education and research.

GGC 'Visions' and their implementation and management on ground largely depend on management, technology and expertise sourced from outside - largely from the technology savvy nations of the West. This strategic weakness has to be made good by a large scale investment in vocational and higher education of their youth, research and development and high tech industry and systems.

Another aspect of concern which needs to be looked into is the growing business rivalry in GCC. If this spins out of control, it could create some new challenges for the region. In a recent economic and strategic development in the region, Saudi Arabia told international companies to move their regional headquarters to its capital to lose out on government contracts. Presently, much of businesses in Saudi Arabia are managed from regional headquarters of the corporate sector and multinationals located in the UAE. The Saudi directive means the relocation of business from the emirates to the kingdom.

Some analysts and economists argue and often refer to this issue as institutional uncertainty or policy volatility, which is characterized by sudden, vague government announcements that are not backed up by actual policies. When policies do appear, their implementation and enforcement are erratic.

The Saudi Vision 2030 is a welcome step towards presenting the kingdom as a vibrant society in accordance with the aspirations of its budding youth. The 'Vision' sends a strong message across that Saudi Arabia is out to do business as per international norms and practices. PM Imran Khan was presented the Saudi Vision 2030 during his recent visit to the kingdom. On his return, he implored the business sector to seriously explore the business potential in the Saudi 'Vision'. According to him, for example, "owing to their complementarities in the socioeconomic fundamentals, Saudi Arabia's Vision 2030 provides opportunities for Pakistan to engage with the kingdom in realizing the government's ambitious plan for Pakistan". The Saudi Vision 2030 does present Pakistan an opportunity to embark on labour export diversification without any loss of time. In other words, banking and IT professionals must show increased presence in the labour export mix.

(The writer is a former President, Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2021