Saudi Arabia with its continental economy along with the holy sites is finding its distinctive charismatic leader. With a determination to turn history, Crown Prince Muhammad Bin Salman spoke last week for 90 minutes in unprecedented assertiveness. Our contemporary and ancient history taught us that responsibilities of political leadership carry with it unanticipated costs, challenges, impediments, and complications, but never inhibits the ability of any historic leader from moving forward, and Saudi Arabia is not an exception.
Last week, the Crown Prince established a standard for a new kind of leadership. In addition, the tone of that interview portraits his political destiny. The way he interacts with the media reflects physical strength, confidence, and competence. Certainly, his assertive convictions put him on the center stage of international politics.
Saudi Vision 2030 was designed carefully by the Crown Prince to improve the financial sector. The Saudi Stock Exchange (Tadawul) joined in June 2018 the emerging market indices (MSCI), FTSE, and Standard & Poor's Dow Jones. The joining made it easier for foreign investors to invest in the Kingdom, as they began to take advantage of their holdings in the market increased by 195.9% to reach SR208.3 billion by 2020, with an ownership rate of 12.8% of the total value of the share.
In 2020, the Kingdom was able to withstand the stalemate, closure, and stagnation due to the outbreak of the COVID-19 pandemic, and despite this, it managed to achieve good numbers compared to some G20 countries, as the rate of contraction in non-oil GDP reached 2.3%.
The non-oil GDP in 2020 represented 59% of GDP, while it was close to 55% in 2016. This process of foreign direct investment has increased to reach SR17.625 billion, an increase of 331%, from just SR5.321 billion in 2015. Furthermore, at the beginning of 2019, NEOM, Qiddiya, and the Red Sea resorts launched. The private sector's share of GDP increased from 38.7% in 2016 to 41.1% by the end of 2020.
The participation of international investors in the Saudi market increased by more than 12.4% in 2020. The National Centre for Debt Management was able to support the general budget with SR897 billion.
The contribution of Vision's programs is clear in attracting a series of famous sporting activities. In this new context, Vision 2030 hails the success of attracting around 46 million spectators. The Vision reflects the fact that Saudi Arabia is a global hub, as NEOM will soon act as the center of the global financial market and sport.
The Saudi Arabian government was aware of the issue of energy challenges that had been difficult to tackle in the past given the sensitivity of energy prices and the lack of coordination between different departments.
The Vision 2030 has made it possible to relax electricity subsidies and set targets for a regulatory framework for renewable energy. The Vision set up several clean energy technologies based on solar energy. The Vision is also formulating a comprehensive national incentive to the private sector to make an investment in clean energy commercially attractive. The total electricity generated from the solar projects was more than 3600 megawatts. A separate network provides electricity for more than 600 dwellings.
Meanwhile, the Vision is also creating laboratories for innovation and several clean energy facilities for ammonia and hydrogen. Under these favorable conditions, renewable energy projects will play a significant role in economically diversifying the energy mix and introducing the latest technology.
In addition, the recent approval of the development of the Jafurah gas field would be a reinforcement of the Vision plans. Many other discoveries including five new gas and oil fields have become a critical factor in the economic power of the Kingdom. Those discoveries have the added benefit of integrating the petroleum and petrochemical sectors.
Undoubtedly, Saudi Arabia has the largest desalination facilities in the world, and more than 50% of all world desalination plants are in Saudi Arabia. A series of significant decisions were made regarding the desalination of saline water to increase the production capacity to 5.9 million cubic meters a day in 2020. Indeed, using environmentally friendly technologies has led to a reduction of 28 million tons of carbon dioxide a year.
The Vision has set clear plans for robust compensation to the poor sections of the society, and at the same time started restructuring some of the current systems to enhance effectiveness and sustainability. From this perspective, new water and electricity electronic metering system was introduced by the Water and Electricity Regulatory Authority to create a culture of conserving natural resources.
The Vision has invited the private sector to take part through alternative financing and management methods to increase the efficiency of existing resources. Undoubtedly, public-private partnerships will make health services stronger by gaining access to the world’s most advanced infrastructure.
Information technologies and digital transformation should be used to improve the efficiency and quality of the healthcare sector. In the meantime, health care will significantly improve when the issue of obesity and smoking is confronted. In this regard, the health service has an obligation to implement effective and right measures to respond to public threats in emergencies in line with international standards.
In large measure, the process of privatizing one of the medical cities along with localizing the pharmaceutical industry is an excellent example of a public-private partnership. Health insurance and medical service purchase will be more effective when trained health practitioners recruited in an exemplary manner. Furthermore, a substantial improvement in the health service was achieved by reducing the waiting time in the emergency units to less than 4 hours. The Vision has also applied a range of measures to bring down fatalities of road accidents from 28.8 to 13.5 per 100,000.
Instrumentally, Vision 2030 has made a fundamental change for pilgrims to holy sites and other visitors by issuing automatic visa within 5 minutes, instead of 14 days. The holy cities have been expanded to accommodate the needs of an ever-increasing number of pilgrims. Further strengthening Saudi Arabian claims to be the core of global archaeological sites, UNESCO has registered eight intangible cultural sites, compared to only three in 2016.
Because of a new robust approach to the judiciary system, the rate of enforcement courts increased to 82%, while the rate of personal status courts increased to 59%. The Vision preserves traditional Saudi values while vigorously promoting international systems in several fields, including laws and jurisdiction. For instance combating corruption and improving integrity has recovered a total of SR247 billion.
The importance of investment in education is reflected in the Vision. This is demonstrated in the creation of a conducive environment for developing skills. It is also evident in the government targeting of youth for education and training. The Vision appears to have succeeded in increasing the number of universities and colleges to 63.
This drastic increase of institutions has resulted in the number of published scientific papers reaching 33,588 compared to 15,056 in previous years, an increase of 233%. Kindergarten education has been gaining support and the enrolment rate has increased from 13% to 23%.
Over the course of 5 years of the Vision, more than 46,000 housing units have been provided, and a new platform "Joud" created as a brand-new set of concepts to involve the community in providing a helping hand with 121 charitable societies. In large measures, the Vision has supported non-profit organizations by training 409,123 male and female volunteers in more than 156,000 volunteering jobs in 2020, compared to 23,000 volunteers in 2016.
In response to the global campaign to accelerate resolutions of the Paris Agreement and the UN framework convention on climate change, the Vision has convened mega projects called Saudi Green and the Middle East Green initiatives to reduce carbon dioxide emissions, expand vegetation cover, combat pollution and land degradation, and preserve marine life. The Crown Prince has paid special attention to work with all countries and joining forces with societies, companies, and the press on the frontline. The voice of Vision 2030 to plant 10 billion trees is indispensable and a rational call.
To localize some aspects of military industries as part of Vision 2030, a mechanism has been established to increase the rate of localization from 2% in 2016, to 8% in 2020. Based on this arrangement, decision-makers for the first time in the history of the Kingdom have issued licenses to 91 local and international companies, along with with142 foundation licenses. As a result, more than 422,000 citizens, male and female, have been employed.
The role of the Vision is best characterized by the improvement of the digital services provision to citizens and residents. The latest review shows the maturity rate of digital government services increased from 60% in 2017, to 81.3% in 2020. Undoubtedly, Saudi Arabia becomes stronger by gaining access to the world's most advanced technology and the Fintech Saudi center is a case in point.
There has been a considerable effort from the Vision to provide an environment that attracts business leaders. On the other hand, the assets of the Public Investment Fund (PIF) have increased from SR570 billion in 2015, to SR1.5 trillion in 2020.
The Vision 2030 knows the risk of the financial crisis, climate change, and COVID-19 pandemic cannot be mitigated by individual countries; those challenges require coordinated actions on a global scale. In Saudi Arabia, managing the risks from globalization and maximizing the benefits requires institutional innovation. The Vision in the 5G era is using digital competitiveness to halt the power of traditional bureaucracies.
The evolution in technology investment was pushed by covering 3.5 million homes in urban areas by fiber optics networks. Saudi Arabia has a clear view of how its national interest is best served by attracting the largest technology investment in the Middle East and North Africa. The Vision gives these task real strengths.
The Vision 2030 is working for an economy that is attractive to international investors, is attractive to the Saudi culture, and is attractive to tourists. The Vision needs to fulfill the national interest by changing circumstances, not by changing alliances, or changing values. Today, more than ever before the country is attractive globally, and developing numerous tourist destinations that stretch north, east, south, and west.
The Crown Prince commands a substantial base of support among Saudis and non-Saudis. He will meet his country’s challenges calmly.
The writer is a member of Shawleen Centre for Global Studies (SCGS), UK.
