Saudi Arabia’s NEOM – moving towards one country, two systems?
The current pace of change in Saudi Arabia reminds me of global warming. We know it’s happening, but can we predict the outcomes? Will Crown Prince Mohammed bin Salman’s intention to transform the country into a haven for “moderate Islam” eliminate the influence of the conservative elements in its society? Or will he inadvertently create an underground resistance that will lead to perennial unrest?
After decades in which change has proceeded at a glacial pace, the ice is thawing rapidly. Economic and social measures are announced on a regular basis. A far-reaching 2030 Economic Vision. The ARAMCO flotation. Cinemas and entertainment zones. Women allowed to drive. Possible changes to the female guardianship rules. Even Richard Branson has got in on the act. Yesterday he announced that the Saudis would be investing a billion dollars in his space business.
The one constant is on the political front. Nothing and nobody is being allowed to challenge the supremacy of the royal family. Most recently there have been arrests across the social spectrum – from ultra-conservative clerics to liberals pressing for democracy. Saudi Arabia remains in the thrall of al-Saud. Those who have traditionally served as a brake on its absolute power – such as the religious establishment – appear to have been sidelined.
The Crown Prince is not without his opponents and naysayers both within and without the Kingdom. The war in Yemen is draining the treasury and going nowhere, they say. The 2030 Vision is hopefully ambitious and will fail. The marginalisation of the conservatives cannot be achieved by decree – hearts and minds need to be won. Others describe the task of embracing “moderate Islam” as a counter-reformation, pointing out that a Reformation of sorts took place more than two centuries ago when the first Saudi dynasty came to power in alliance with the “back to basics” preacher, Mohammed ibn Wahab. They claim that an open society promised by the Crown Prince cannot exist without the political plurality that he shows no sign of tolerating.
Whether or not the sceptics are right, there’s little doubt that Mohammed bin Salman has a massive task ahead of him if Saudi Arabia is to wean itself from dependence for its prosperity on oil and gas.
Saudi-watchers often claim that he sees Dubai as his model of governance. Tightly controlled by the ruling family, but socially liberal – up to a point – and rampantly entrepreneurial. But Dubai is a city state. It’s relatively easy to control politically and its population of nationals is far smaller compared with its expatriate s than Saudi Arabia. The Kingdom is sprawling and diverse.
My guess is that the Crown Prince looks further for his model – to China, where the entrepreneurial spirit thrives within the iron grip of the Communist Party. To compare Xi Jinping and his party oligarchs with Al-Saud might be a stretch, but the royal family numbers many thousands and its patronage extends far and wide.
In one aspect the example of Dubai does loom large in Saudi thinking. With its cinemas, bars and relatively relaxed social mores, it’s long been a honeypot for Saudis who wish to escape from the restrictions of their homeland for a weekend or sometimes longer. “Why can’t we be like Dubai?” is a familiar refrain, especially in cities, such as Jeddah, that have always been more cosmopolitan than those in the Saudi heartland – Riyadh, Hail and Qassim.
The news that the Saudis are planning to create a new megacity on the north-west coast, close to Jordan, Egypt and Israel made me smile, for reasons I will explain shortly. NEOM will be nearly the size of Belgium. It will be socially liberal, powered by sustainable energy, and devoted to high-tech industries. As Prince Mohammed explained, “this place is not for conventional people or conventional companies”.
Certainly not in Saudi terms. Potentially it represents the first step in solving the ages-old tension between the conservatives and those who chafe under what they see as unnecessary social restrictions.
Why the smile? Because six years ago in this blog I anticipated a development not a million miles from what is now being contemplated. In a piece called The New Saudi Arabia, I imagined the monarch at the time, King Abdullah, upon his return from surgery in the United States, addressing the nation thus:
….Of one thing I am sure. We cannot stand still. Today our economy is stronger than ever. We are a respected member of the G20 group of nations. We have carried out many initiatives to foster a new economy that will remain strong after our blessed patrimony, our reserves of oil and gas, have been depleted. But we have to face the prospect that within the next fifty years those resources will no longer be as valuable to the world as they are today. Our neighbours and trading partners are, as I speak, developing alternative energy technologies which are reducing the world’s reliance on hydrocarbons.
We must do the same. Whether the long-term solution is nuclear, solar, wind, wave power or a combination of all these technologies, Saudi Arabia must be at the forefront in developing solutions for ourselves. This is why I authorised the establishment of the King Abdullah University of Science and Technology and other research initiatives.
But these are long-term programmes. They will not solve the pressing problem facing many of our young people – the curse of unemployment. Therefore, after consulting members of the Shoura Council and the Council of Ministers, I have decided to issue a Royal Decree announcing a number of measures designed to stimulate employment, reduce our reliance of foreign labour and move towards a knowledge-based economy.
The first and most important measure will be to divide the country into two areas with separate commercial and social policies. The cities of Jeddah, Rabigh, Yanbu, Dammam, Al-Khobar and Jubail, together with their surrounding areas, will be designated as International Zones. The remaining cities, including Riyadh, Makkah, Al-Madinah and Hail, as well as the rest of the Kingdom, will be designated as Heritage Zones.
The Western cities, and particularly Jeddah, have long been at the commercial heart of the Kingdom. The conurbation of the Eastern Province plays a vital role as the centre of our petrochemical industries. It is in these regions that we will be implementing new regulations to encourage trade and investment, employment and the free movement of labour. If the measures succeed, then we will consider implementing them in the Heritage Zones also. If they fail, then those who accuse us of being resistant to change will not be able to say that we were unwilling to consider new approaches.
The new measures in the International Zones will include free association between men and women in the workplace, in education and in public gatherings. Women will be permitted to drive. Women will be permitted to practice as lawyers and in all other professions open to men. The sponsorship system for foreign labour employed in these zones will be abolished. The incentives currently in effect in the Royal Commission cities of Yanbu and Jubail will be extended to all the cities in the International zones. Several government departments currently located in Riyadh will move to the International zones, but staff will not be guaranteed lifetime employment, and their working conditions will be similar to those in effect in the private sector.
The Heritage Zones are at the heart of our culture as Arabs and Muslims. Riyadh and Hail best exemplify the purest Arabian traditions of hospitality and observance of the customs of our ancestors. The Holy Cities have been entrusted to us by God, and we will cherish and preserve them as living monuments to our Islamic values. In these regions, life will continue much as it does today.
There will be no discrimination between the Zones in terms of the basic rights and entitlements of our people. But by these measures we recognise and cater for the differences of aspiration and social preference between one section of our society and another. Our policy of investing in business, education and research across all areas of the Kingdom will continue. It will be the choice of our citizens whether to live and work in either Zone.
Saudi Arabia cannot stand apart in the world. We recognise that not all of our neighbours share all of our customs and values. We have learned from their successes and failures. These measures make certain areas of our Kingdom more aligned to the commercial and social practices of our neighbours and trading partners, while preserving in the heartland the way of life practiced by previous generations. They open the way for Jeddah to become the third great commercial and financial centre of the Middle East, rivalling Dubai and Bahrain, but with the advantage of being the only centre in the West of our country. The Eastern Province can similarly develop to become the centre of excellence for engineering and petrochemical technology in the Arabian Gulf, capitalising on the experience and expertise of Saudi Aramco. By these changes in social regulation, we even open the door for the cities of the International Zone to host major sporting competitions such as the Olympic Games and the FIFA World Cup.
Other measures will include regulations requiring a rigorous examination of productivity both in the public and the private sector with adjustments to work permit allocations and labour laws based on the findings. Schemes to re-train Saudi nationals in mid-career into new and rewarding occupations. Anti-corruption legislation that imposes stiff penalties with no exceptions on those who abuse positions of trust for personal gain. The requirement that foreign companies operating in their own right or as joint ventures contribute either to a national research and development fund or invest in their own research and development in the Kingdom, with the rights to their inventions remaining in the Kingdom. Standardisation of procedures for granting business and visit visas common to all our embassies abroad. Investment in non-religious tourist attractions within the International Zones. Extension of tourist visas into the International Zones for non-Muslims…..
Things are not quite working out that way. It would be hard to see young Saudis in places like Riyadh being content to miss out on all the fun to be had elsewhere. And the ban on women driving has been lifted throughout the country. But NEOM, if it happens, would be the first example of an entire area being sectioned off into a zone where different social and economic rules apply, even if, as Bloomberg anticipates, it ends up being populated more by robots than people. If it works, the principle of “one country, two systems” could become a model for further zoning.
I’m cautiously optimistic about the future of Saudi Arabia. I’ve been coming to the country since 1981, and for several years it was my home. That doesn’t make me an expert on all matters Arabian. But I’ve met and worked with enough people over those years to know that there’s no shortage of talent, enthusiasm and goodwill.
I also know that the Kingdom’s political leaders have always tempered dreams with pragmatism, and for that reason I don’t believe that a greater degree of political plurality is out of the question, even if today it appears far away.
Perhaps my optimism is rooted in a desire to see the country succeed. For all its flaws, there is so much to like about its people, its traditions and its often quirky approach to life.
If the region were not so riven with conflict, I would be even more positive about Saudi Arabia’s future as a nation. Even so, there have been plenty of people willing it to fail over the past nine decades of its existence, and it’s still standing. For the sake of all the good people who live there, I hope its current evolution leads to stability and fulfilment.
Those of us who watch from afar, whatever our reservations over its social and political policies, sometimes forget how important the country is to our prosperity. The prospect of it plunging into the chaos that has ruined its neighbours to the north would have ramifications way beyond the Middle East.
For me, it’s a bit more personal. I made friends with many Saudis over thirty-five years. They deserve happiness and success as much as the rest of us.