Why Saudi Reform?

Reuters photo

By

Tom Arms

Saudi Arabia needs social reform. Not because it is the right thing to do–although it is– but because it needs the money.

That is the pragmatic thinking behind Crown Prince Mohammad bin Salman’s decision to let women drive. It is also behind his decision to remove the morality police from the streets, open public cinemas and allow music in public places.

The need for cash will also be behind any social and political reforms so far unknown but almost certainly in the works.

Eighty percent of Saudi Arabia’s revenues are based on the production of oil. The kingdom is the world’s biggest oil producer. The problem is that as the oil starts to run out globally the price goes up because the cost of extracting the slimy black gold increases. This in turn makes the cost of renewable energy supplies relatively cheaper and encourages investment in non-fossil fuels. Eventually the tipping point will be reached where the cost of renewable energy will be significantly cheaper than the cost of extracting Saudi oil. When that happens, the Saudis are potentially in trouble.

Mohammad bin Salman is trying to diversify now to avoid the economic and political dislocation that inevitably accompanies such trouble. He wants to follow in the footsteps of the Gulf states who have successfully used their oil money to turn Qatar and the United Arab Emirates into media centres, tourism hot spots, and transport and financial hubs.

Twenty years ago a bird watching journalist friend of mine was refused a visa to visit Saudi Arabia for a book he was writing on birds of the Middle East. He was a journalist and thus suspect regardless of the topic. A few months ago thousands of journalists were invited to Saudi Arabia’s annual camel festival.

To attract the businesses, foreign investment and foreign expertise to successfully diversify, the Saudis have to do more than pay big salaries. They need to create social conditions in which people feel comfortable.

Saudi Arabia certainly has the money to achieve this aim. Years of oil revenues have created a $2 trillion sovereign wealth fund—the world’s fourth largest behind China, Norway and the United Arab Emirates. This should buy it time to introduce the reforms gradually enough to prevent backlash from the religious right.

Tom Arms

I am a journalist, entrepreneur and historian with extensive experience in print, web and broadcast journalism. I started as a diplomatic correspondent, wrote several books (The Falklands Crisis, World Elections On File and the Encyclopedia of the Cold War), and then in 1987 started my own business (Future Events News Service, www.fensinformation.com) which over 25 years established itself as the world and UK media’s diary. Our strapline was: “We set the world’s news agenda.” I sold FENS in December 2012 but retained the exclusive broadcast rights to all of FENS data. To exploit these rights I set up LookAhead TV which produces unique programmes which “Broadcasts Tomorrow Today” so that viewers can “Plan to Participate.” LookAhead has appeared regularly on Vox Africa, Radio Tatras International, The Conversation and Voice of Africa Radio.

In addition to being a syndicated broadcaster and columnist on global affairs, Tom is also available for speaking engagements and can be contacted on Twitter, Linkedin and email: [email protected].