There’s more money in the moderate — Saudi Arabia and Western investment



Saudi Arabia is the second largest state in the Arab world, the primary driver and leader of the Gulf Cooperation Council (GCC), and an absolute monarchy characterised by conservative religious restrictions with its own brand of fundamentalist Islam, Wahhabism, as the foundation of Saudi culture.

Wahhabism dedicates itself to adherence to the belief and practices of the earliest Muslims. Its intolerance and dedication to Sharia-based law have led to some of the most restrictive laws in the world. Home to the holy cities of Mecca and Medina, Saudi Arabia views itself as the vanguard of Islam and regularly seeks to export its version of Islam across the world. The Government provides generous funding to support the promotion of Wahhabism, diving perilously close to state-sponsored terrorism.

Saudi Arabia has long been a Western ally in the Middle East, however it could not be more incompatible with Western liberal ideas of democracy, human rights, and free markets. Western governments receive criticism for their supply of weapons to the Kingdom used to pummel its poorest neighbour Yemen, keeping the Saudi royal family extremely wealthy with little to no accountability for human rights systemically abused in the Kingdom.

Saudi Arabia’s commonalities with the West stem from its massive oil and gas reserves, secure output, and high military expenditure. The Kingdom purchases high-grade Western weapons and systems and objects to the right enemies.

The Saudi Arabian economy is reliant on the export of fossil fuels, as 90 percent of revenue comes from oil and 70 percent of Saudis work for the government. With fluctuating oil prices, 70 percent of the Saudi population under the age of 30, a 12.8 percent unemployment rate, and a growing international push to move away from fossil fuels, the Saudi Arabian economy is in need of reform.

If there’s one man who realises the dire future of the Kingdom’s economy, it’s Crown Prince Mohammad bin Salman. After purging any potential rivals to secure his leadership, the Crown Prince has been on a diplomatic mission to the West, donning a suit and dropping traditional cultural attire to present himself as a new moderate leader to potential Western investors.

The Crown Prince has overseen the loosening of several social restrictions, including the announcement that women will no longer be banned from driving and reopening cinemas in the Kingdom after a 35-year ban, all while simultaneously cracking down on women-rights advocates pushing for more change.

On his visits to the US and UK the Crown Prince met with political and religious leaders, visiting the London and New York Stock Exchange. He is attempting to drive home the message that Saudi Arabia is stable and open for investment, attempting to diversify the economy into tourism, technology and entertainment, areas other members of the GCC have had more success in.

It is unclear whether partnerships with entertainment companies will pay off long-term for those willing to invest in the Kingdom. There are plans for Cirque du Soleil shows, National Geographic Encounter experiences and even professional wrestling making its first appearance in the Kingdom. In socially aware and charged times, where products and companies become lifestyle brands, there is a greater awareness of company’s actions and backlash for the socially irresponsible. Investment into one of the worst of the worst human rights abusers can have significant repercussions for Western investors, not to mention the level of unchecked executive powers the Saudi family enjoys.

Saudi Arabia need look no further than its closest neighbours about loosening investment and civil liberty restrictions. Saudi Arabia has some of the strictest travel policies in the world, with religious police patrolling the country. Qatar, the UAE, and Bahrain all border the Saudi Kingdom and despite their size have had success appealing to Western travellers and attracting foreign investment, comparably outperforming Saudi Arabia in gross domestic product and relative purchasing power. Due to its size, reform in Saudi Arabia will always be cumbersome in comparison to its smaller nimble neighbours, however, Saudi Arabia’s neighbours do provide a model for adherence to faith combined with some liberalisation.

International visits, charm offensives, and the loosening of restrictive Kingdom policies can only be characterised as publicity stunts designed to sway international public opinion on Saudi Arabia’s restrictive state, making doing business with the Kingdom, outside of oil and weapons, more palatable for private enterprise.

Saudi Arabia may take small steps towards modernisation but not liberalisation, ultimately Saudi Arabia’s view of itself as the keeper of the purest form of fundamental Sunni Islam leaves little in the way for major reform. Its greatest hope for increased foreign investment is a continued public relations campaign which champions the few freedoms that the Crown Prince can trickle out, not actual sweeping reform.

Matthew Wilson is studying a Masters of International Relations with a strong interest in national security and strategic studies.

#Insights

CAREER RESOURCES

  • Facebook - White Circle
  • Twitter - White Circle
  • LinkedIn - White Circle
  • Instagram

© 2020 Young Australians in International Affairs, Incorporated.

ABN: 35 134 986 228 ARBN: 609 452 333

Website Design www.olyablack.com