- Saudi Arabia is in the process of reinventing itself.
- The Gulf kingdom is racing to transform to stay relevant well into the 21st century.
- Take a closer look at the country led by a prince on a mission.
Saudi Arabia is in the midst of a once-in-a-lifetime reinvention that could make or break the most powerful kingdom in the Gulf.
After a near-century of relying on its oil riches, the country has been scrambling to set a grand plan in motion that aims to do nothing short of transform its entire economy and pave the way to the future for a nation of youths hungry for opportunity.
The plan, known as Vision 2030, is being led by the desperately ambitious 38-year-old Crown Prince Mohammed Bin Salman, the de facto leader trying to cement both his legacy and the kingdom’s place on the global stage — all by the close of the decade.
But radical reform has not been without controversy.
The kingdom’s been under increasing scrutiny since the Crown Prince rose to power in 2017. Saudi Arabia sparked international outrage in 2018 after Washington Post columnist Jamal Khashoggi was murdered at the Saudi consulate in Istanbul, and continues to face accusations of human rights violations.
Despite this, little has been able to stop Saudi Arabia from exerting more and more influence on the global stage.
It’s opened its purse strings to direct billions of dollars towards everything from sports to media and entertainment as part of an international spending spree aimed at helping it diversify beyond oil.
All this makes Saudi Arabia a country more relevant than ever. Here’s a closer look at everything from its GDP to employment in the Gulf Kingdom.
An economy in boom mode
Like many countries, Saudi Arabia’s economy suffered when the pandemic struck in 2020, but the only way has been up since then.
It GDP soared past $1 trillion last year for the first time, while per- capita output stood at $30,436, up about 50% in just two years, according to World Bank data.
The growth phase, which secured the kingdom’s spot as the G20’s fastest-growing economy last year, was fueled by higher global energy prices as well as a 4.8% non-oil GDP growth thanks to a boom in areas such as construction and transport, per the IMF.
Oil is still king
Saudi Arabia may be trying to reduce its reliance on oil revenues as part of its Vision 2030 plan for a diversified economy, but it’s clear that crude still calls the shots for the world’s top exporter.
An 8.7% economic expansion last year was driven by higher oil prices. Saudi Aramco, the majority state-owned oil major that raised $25.6 billion in its 2019 IPO, made record profit of $161 billion last year, up from $110 billion in 2021.
Despite the resilience of oil demand even with the rise of renewable energy, Saudi Arabia’s wants to increase the share of non-oil exports in non-oil GDP from 18.7% to 50%.
Money is being sprayed everywhere
Both at home and far away, Saudi Arabia hasn’t shied away from investing boatloads of cash. The investments are primarily led by the Public Investment Fund, the state’s powerful sovereign wealth fund led by MBS and fund governor Yasir Al-Rumayyan.
It’s the investment vehicle behind splashy deals in sports such as Saudi Arabia’s takeover of Newcastle United and the LIV Golf merger with the PGA Tour, to being the driving force behind Saudi Arabia’s domestic investments in giga-projects like NEOM and the Red Sea resort.
In August, the fund disclosed assets under management surpassed 2.23 trillion riyals ($594 billion) in 2022, Reuters reported. Almost a quarter of those assets were international.
A young population
Saudi’s population is young and growing. The total hit 32.2 million in May with a median age of 29, according to Saudi Arabia’s General Authority for Statistics.
The population has increased by a third in 13 years and more than half of Saudis are under 30, according to a 2022 census reported by Reuters.
The high proportion of young people attempting to enter the workforce is one of the MBS’s biggest challenges. The prince has been attempting to diversify the economy and create opportunities for young workers.
A hub for foreign nationals
The country has been heavily reliant on migrant labor for some time, with many employed in sectors such as agriculture and domestic service industries. The country has faced criticism from international groups about its treatment of migrant workers including the exclusions from some protections under national labor law.
The unemployment rate was 5.1% in the first quarter of this year, according to estimates based on an official labor force survey. The country’s average overall employment participation rate was 61.7% – 52.4% for Saudi nationals and 75.2% for non-Saudis.
Saudi women are also less likely to be working, with the unemployment rate for those aged 25 to 54 at 15.7% compared to just 3.5% for men in the same age bracket.
Place in the Gulf States
The Arab Gulf economies share similar characteristics and are all heavily reliant on oil or gas revenue.
While Saudi Arabia was the world’s fastest-growing G20 economy last year, fellow Gulf states Kuwait and the United Arab Emirates registered rapid growth as well.
The kingdom registered the largest overall GDP in the Arab League last year.
Its record-setting $1 trillion economy was more than double the size of the UAE. The kingdom’s GDP per capita, however, fell below figures recorded for Qatar, the UAE, and Kuwait, per the IMF.