Vision 2030: Building Saudi Arabia’s Economic Future

For the last few weeks, the media has focused almost exclusively on the Ukraine war and the looming recession. Of course, that’s perfectly understandable. Those two things are the gigantic elephants rumbling around in our little planetary room, and recently they have been putting a major strain on East and West economic relations, undermining global energy concerns, and generally upending every geopolitical structure we’ve taken for granted as we witness the transition from a post-20th century world to a new 21st-century global order.

The stuff on the big stage is quite dramatic, but while we’re watching the macro unfold, there have been some black box theaters running small-scale socioeconomic productions that are well worth checking out. And one of the most exciting independent shows today is playing on the Saudi Arabian Peninsula. Saudi Arabia, the UAE, Kuwait, Bahrain, Qatar—all are known internationally for oil. However, if you look at their marquees these days, all you’re going to see advertised is alternative energy, tech, and tourism.? While the rest of the world has just begun to get serious about green energy and trade independence from Russian fossil fuels, the nations of our traditional petroleum Disneyland have been looking at fashioning a carbon-free economy for at least a decade. And their wells are not even close to running dry.?

Vision 2030: The Specs

The flagship initiative at the moment is known as Vision 2030 , which is Saudi Arabia’s broad-based strategy to re-imagine its position in world economic affairs in a post-oil world. Some of its more dramatic goals include:?

• Decentralizing and privatizing assets that have historically been controlled by the royal family
• Developing non-oil sectors
• Strengthening the country’s position as a geographical trade hub between East and West
• Developing cutting-edge technology and automation infrastructure
• Leading the energy industry by maximizing the potential of existing oil assets and diversifying into the green and renewable energy markets.?

Not bad.

It’s an incredibly exciting undertaking that is as bold as it is courageous for a nation that has reposed itself quite comfortably for a hundred years on the soft pillows of easy petroleum cash and highly conservative social structures. All that economic decoupling of eastern and western hemispheres and talk of reducing global carbon footprints we’ve been talking about? The Saudis are going to try to do all that in less than a decade.?

The going plan is that by 2030, the country intends to produce a whopping 50% of its electricity from renewables despite floating on a literal ocean of liquid megawatts. Oh, and they also plan to raise an automated emission-free city out of the sand and turn the deserts into forests. It’s a colossal rebranding of one of humanity’s classic labels, and this little laboratory is going to run all the tests the rest of the world is going to need to implement as big-picture ecological and economic tectonics settle into a new global image.?

Before Saudi Oil: A History

The philosophy of Vision 2030 is rooted in something that has nearly gone out of living memory: the importance of the Middle East was never oil. It was trading, specifically between east and west. It’s right there in the name: Middle East. In fact, oil wasn’t even discovered in Saudi Arabia until 1938 when it bubbled up in the Damman oil field. Even today, there are a few people kicking around who remember when the most significant asset of a Saudi king was knowledge of camel deployment in modern warfare.

The Arab traders and merchants who inspired Sinbad in the 1001 Arabian Nights were dealing in cloves and nutmeg for centuries before the Dutch and English even knew where those spices came from. The ancient Silk Road, African, and sub-continent trade routes were refreshed in the 19th century when the Suez Canal opened, as was European colonial meddling. Now, China’s Belt and Road Initiative (BRI) is promising to inject economic steroids into the Persian Gulf and Red Sea trade arteries, and the House of Saud plans to take full advantage of this opportunity as it weans itself off its domestic oil addiction.?

China and Saudi Arabia: BRI and Vision 2030?

China is currently Saudi Arabia’s largest trading partner, mostly because it imports 17% of its oil from the OPEC hub. However, until recently, Chinese investment and export had been relatively limited ($2.2 billion of the $239 billion invested by the rest of the world), with its most significant commodity being weapons. Even there, their exposure is dwarfed by Western interests. The reason: until the 2010s China really didn’t care about the Middle East as long as their container ships kept chugging through the Red Sea on Saudi diesel. That all changed when, after a 2016 visit to Riyadh by Xi Jinping, soon-to-be-Crown-Prince Mohammad bin Salman announced the kingdom’s intent to pursue bilateral trade and development cooperation between the BRI and Vision 2030.??

In the last five years, Chinese investments have increased dramatically. In 2021, China’s premier shipping company COSCO signed a 20% equity investment agreement with the Jeddah Islamic Port, as well as ports on the Ethiopian side and around the Gulf of Aden. The Haramain high speed railway line between Mecca and Medina was largely funded by the China Railway Construction Corporation. In the meantime, the rapid development of Gwadar Port in the China-Pakistan Economic Corridor opened a direct link from the Arabian Peninsula to China through Pakistan, overcoming the political inconvenience of shipping goods and petroleum through the Western-influenced Malaccan Strait in Malaysia (which was known as the “Malaccan dilemma ”). These rapidly changing factors are strengthening Saudi Arabia’s position as a major trade hub between Europe and Beijing as they move into the 2030’s.?

A Technological Arab Spring

Let’s be honest: Saudi Arabia’s journey to being a trade powerhouse is not going to happen in a tech vacuum. Like the UAE, Saudi Arabia has ambitions of developing the cities of tomorrow, complete with cutting-edge transportation and automated infrastructure. So far, they have invested billions for improvements in areas like robotics and automation, the Internet of Things, blockchain, and AI through Vision 2030’s Smart Government Strategy.? The theory is that, in addition to looking the part of a rich entrepreneurial nation,? Saudi Arabia will have to increasingly rely on tourism as Vision 2030 sets in. To do that, they will need cities with big wow factors.

And that’s just the digital stuff. What the country is doing in Tabuk Province is the stuff of science fiction. Neom is a made-from-scratch megacity founded in 2017 at the meeting point of Jordan, Israel, and the Sinai. The $500 billion investment will feature an emission-free, car-free (yes, car-free) district for 1 million residents called The Line, as well as the largest floating (yes, floating) industrial sector in the world. They’re even putting in a ski area in the mountains. All of this magic will be supported by green energy and water systems, so you can breathe free when you hit the slopes in Trojena when it opens in 2026.

On the subject of green, the Saudi Green Initiative is currently developing an afforestation plan—the opposite of deforestation—to plant 50 billion trees across the country with the aim of rehabilitating and reclaiming 40 million hectares of desert and dilapidated land resources. That’s an astonishing picture of a country that is most known for sand dunes and sun. But believe me, they have not forgotten about the sun. In 2020 the Sakaka solar plant began producing 300MW of clean electricity, and plants in Jeddah, Rabigh, and Sudair are expected to come online this year.

The Future is in Free Markets

Perhaps the most important part of Vision 2030’s efforts is ideological: all the tech wonders are happening as a direct result of the natural forces of private enterprise and the free market. This must have been a difficult move for a pure monarchy that has benefited immensely from state control of major industries, but in 2017 the Saudi regime established the National Center for Privatization and PPP. The Center’s mission is engineering a modern, healthy economic stratum for Vision 2030. The list of areas the NCP is working in is too long to mention in full, but it covers everything from industry and education to—and I triple-checked this—the Hajj and the Umrah.

Given that the House of Saud only permitted women to start driving in 2019, this all suggests the striking realization that the days of going it alone with a monolithic economy are over. When you embrace free market reforms and invite tourists from free countries, you open the door for something even more important than flashy cars and green energy: freedom. Freedom to innovate. Freedom to dream. Freedom to build a green future. When private companies in major sectors have complaints about restrictive social conventions that impact their economic interests, it’s much harder for kings to look the other way. The real future of Vision 2030 will invariably include greater personal and economic freedom and social tolerance for the increasing diversity of people who live there and power their economic engine, and that’s something the entire world can get behind.