While many questions remain to be answered, there is no doubt that the world is witnessing a historical time in the kingdom's history - one which holds massive business opportunities
When one reads the news these days – Arabian Business included – it’s hard not to be struck by the almost unbelievable pace of change in Saudi Arabia. Recent initiatives have ranged from its plans for an Aramco IPO; robots and renewable energy; women being allowed to drive and attend sports events; and, most recently, Neom, a futuristic $500bn tech hub that is slated to be more than 30 times the size of New York City when finished.
Looking forward to this dizzying array of economic, social and technological changes, many questions remain unanswered. How exactly will these projects be implemented? How will the kingdom overcome the enormous challenges of doing this all at once? What does all this mean for the greater region?
Among the most pressing questions is how Saudi society will respond to these changes, and what effect they will have on the daily lives of its citizens. Although nobody knows what the future will hold, things look promising if its populace supports the changes.
“You have to get the balance right, in terms of accelerating reforms in order to tell the outside world [you’re] open for business, but also garnering domestic political support,” Alia Moubayed, director of geo-economics and strategy at the International Institute for Strategic Studies, said in Dubai last week. “There is a tremendous energy in terms of these new projects, but we are dealing with an elite…The question really is what the rest of the population of Saudi Arabia thinks.”
So far, the government seems to have effectively outlined its near-, mid- and long-term plans, laying down frameworks, setting expectations, and wooing investors to projects that, though undoubtedly attractive, are a leap in the dark for both parties.
Investors seem to be responding to this once-in-a-lifetime opportunity to be a part of a seismic shift. Virgin Group’s Richard Branson, for example, has already gotten in on the act, as has Russia’s Direct Investment Fund.
In the UAE, Emaar CEO Mohammed Alabbar has expressed his excitement at the changes, particularly Neom, which he seems to view as an opportunity rather than competition. “It’s a big, exciting thing,” he said. “If they call on us, we would look on that positively.”
Some may wonder whether the kingdom’s development will, somehow, detract from the rest of the region. This, however, seems unlikely. As Crown Prince Mohammed bin Salman told Bloomberg in Riyadh last week, Hong Kong didn’t take away from Singapore, or vice versa. The Neom project, in particular, will provide a boon to the UAE, Kuwait, Jordan and Egypt – and likely much further afield.
Taking Neom as perhaps the best example of Saudi’s transformation, businesses of all kinds have many golden opportunities. Being a completely new city, it will need services, technology, and infrastructure to connect it with the region. Most importantly, it will need human capital to make it all possible.
All that said, perhaps no country in the world has tried to accomplish so much, so fast, and we don’t know how things will pan out. But businesses would be well advised to keep a careful eye on Saudi Arabia. If there’s ever a time to take a risk on an investment, this is it. It may not come again in our lifetimes – and the possibilities are endless. This is just the beginning.