Saudi Vision 2030: Political Liberalization & the Kingdom’s Social Contract
Saudi Vision 2030
Political Liberalization & the Kingdom’s Social Contract
By Sandeep Gingipalli
From being seen as a sweltering desert with scattered nomads to a resource-rich oasis teeming with cutting-edge infrastructure and technology, Saudi Arabia’s rise as a regional hegemon has been fueled by its discovery of oil in the 1930s.[i] As a country largely devoid of industries outside of natural resources, Saudi Arabia’s economy and politics are dictated by the central role of oil. Traditionally, Saudi citizens have received economic benefits from the government's oil enterprises in exchange for unquestioned loyalty towards those in power. This exchange has created civilian dependence on the Saudi government for economic welfare, which, in turn, has led to little opposition towards the authoritarian government. Consistent revenue from oil has allowed this system to flourish; however, volatile oil prices, a result of OPEC’s failure to control the supply of oil and a greater global commitment to renewable energy, have embedded the future of Saudi Arabia’s political and economic structures in instability.[ii] To combat this volatility, in 2016 King Salman and his Crown Prince Mohammad Bin Salman put forward Saudi Vision 2030, a plan that aims to diversify the Saudi economy and partially privatize state owned enterprises.[iii] Ultimately, a movement away from the oil industry in the manner envisioned by Saudi Vision 2030 will reduce citizen dependence on the Saudi government, suggesting a shift in the established social contract towards political liberalization. However, the kingdom’s strong authoritarian rule and Muslim clerics, who practice and enforce the ultra-conservative sect of Islam known as Wahhabism, stand in the way of this occurring.
Saudi Arabia’s Rentier Social Contract
Pioneered by French Enlightenment philosopher Jean-Jacques Rousseau in the 18th century, the ‘social contract’ is an implicit agreement between the state and its citizens wherein citizens agree to give up a certain degree of liberty in exchange for the state’s protection.[iv] The majority of rentier states, defined as countries where the majority of state revenue is generated by the sale of indigenous resources like oil, have developed social contracts in which the government uses revenue from these resources to provide extensive welfare programs to its people in exchange for absolute political power. This appeasement limits political development as citizens are not inclined to pressure the government to be responsive to their needs, thereby giving the state free reign.[v]
In Saudi Arabia, oil has historically been the key provider of state revenue, and, as a result, has also served as the main source of funding for economic welfare programs. When oil production increased in the 1970s, welfare benefits subsequently surged, pacifying opposition and establishing the government's role as the main provider of economic welfare.[vi]As a result of the government’s oil enterprises, in the past few decades Saudi citizens have grown accustomed to receiving economic benefits such as tax-free incomes and subsidies on fuel, water, and electricity.[vii]
Prior Strains on the Saudi Arabian Social Contract
Saudi Arabia’s struggling economy, strained from volatile oil prices and financing the war in Yemen, has limited the kingdom’s ability to appease citizens. As a result, King Salman and his Crown Prince Mohammad Bin Salman have begun to feel apprehensive towards threats to their authoritarian rule. Fearing turmoil similar to that of countries in the region such as Libya and Syria, in April 2018 the government quickly reversed public sector salary cuts it had imposed in September after facing backlash, despite the country’s continued economic struggles.[viii]A similar attempt to implement austerity measures in January of 2018, in the form of a five percent sales tax on most goods, failed as the government faced harsh criticism on social media. To subdue people’s frustrations, the government announced later that month that it would be distributing a 50 billion Riyals ($13 billion) stimulus package for citizens.[ix] The government recognized that support from the military and beneficiaries of the government, which it has received in the past by providing economic welfare, would be imperative to avoiding potential challenges to their rule. However, given Saudi Arabia’s volatile economy, the government's ability to continue this appeasement and uphold the established social contract into the long-term future is unlikely.
How Saudi Vision 2030 Will Diversify the Economy
By bolstering the private sector, reducing the country’s dependence on oil, and shifting the economy towards the tourism, entertainment, and renewable energy sectors among others, Saudi Vision 2030 aims to reduce pressure on the government to uphold this contract.[x] Though Saudi Arabia has primarily focused on religious tourism in the past, with the Hajj, an annual pilgrimage to Mecca that all Muslims are expected to make at least once in their lifetime, bringing in 1.75 million tourists in 2018, the government is now looking to expand its non-religious tourism.[xi] The kingdom has taken steps to achieve this goal by granting non-religious tourist visas to people from 49 countries beginning in October 2019.[xii] The government’s increasing emphasis on tourism is occurring in conjunction with a plan to expand its entertainment industry. Not only did Crown Prince Salman announce plans to build an ‘entertainment city’ south of Riyadh by 2022, but in February 2017, the CEO of Arabian Centers, Saudi Arabia’s largest mall operator, stated that his company intended to build cinema theaters, which had previously been banned, in 10 new malls across the country.[xiii]
Furthermore, with environmental consciousness rising among world powers and the global demand for oil increasing at a falling rate, the kingdom has identified renewable energy as a way to partially replace their oil industry. In 2019, the Saudi government channeled the foreign and domestic investment of $320 million into the privately-developed Sakaka Independent Power Photovoltaic Solar Plant, which aims to meet the energy needs of 45,000 homes in the Al Jawf region.[xiv]
Moreover, in order to bolster the talent pool that companies in the Saudi private sector can hire from, the nation is looking to partially secularize its education system and increase its emphasis on critical thinking and STEM subjects. To further increase the strength of its employment pool, the kingdom is also looking to expand women's rights in an effort to reduce their 33% unemployment rate.[xv] The kingdom hopes these reforms will allow for some of the largest state-owned enterprises, such as the oil and gas giant Saudi Aramco, to be partially taken over by the growing private sector which currently only employs 30% of the Saudi workforce.[xvi] In November 2019, Saudi Arabia kick-started its initial public offering (IPO) of Saudi Aramco, with sources claiming that the company could offer up to 2 percent of its shares, raising as much as $40 billion to support economic diversification.[xvii]
Political Liberalization in Saudi Arabia?
While the Saudi government hopes to rewrite the current social contract in a manner that allows them to retrench economic welfare while maintaining authoritarian rule, diversifying the economy away from oil in the fashion envisioned by Saudi Vision 2030 could provide Saudi citizens with an increase in economic and social liberty. This development would appear to hint at a movement of the established social contract away from the government’s preferred authoritarianism and towards a more politically liberal system. If the economy moved away from oil and the private sector achieved more equal footing with the public sector, individuals would be less reliant on the government’s provisions, thus reducing the state’s coercive power. This reduction of state power would seem to indicate an increase in the freedom of information and expression in the kingdom, which could translate to political reform. However, a number of barriers exist which may prevent this from occurring.
Obstacles Preventing Political Liberalization
Although Saudi Vision 2030 appears destined to transform the social contract in a manner that increases political freedom, the government's immense power and the role of religion in the kingdom could stand in the way. As the world's third largest military spender, the government has the force necessary to crush voices of dissent, as it has done in the past when faced with opposition.[xviii] If the government retains military support through economic appeasement, a measure which it can afford, it would be difficult for citizens to generate enough momentum to challenge the established form of governance. The kingdom demonstrated its intolerance towards dissent in 2017, when Prince Salman notably lifted the ban on women driving but in the process also authorized the imprisonment of the female activists who had spearheaded the movement.[xix] Ranked 172nd out of 180 countries by the World Press Freedom Index, the country’s history of suppressing critics of the government could also make transforming the social contract in a manner that enhances political reforms difficult.[xx]As China and the United Arab Emirates have shown, economic liberalization doesn’t necessarily have to correspond with political liberalization if the government has a sufficiently strong hold on its people.
Moreover, Saudi Arabia is a deeply religious theocracy, with the respected conservative Muslim clerics providing legitimacy to the state’s authoritarian regime. Growing criticism from the kingdom’s religious elite, such as Grand Mufti Abdulaziz al-Sheikh, who denounced the actions of activists and Saudi Arabia’s recent moves towards a more secular, Westernized society as “Haram”, or forbidden in Islam, could lead to a religious resurgence similar to, but not as radical, as the one led by Ayatollah Ruhollah Khomeini in Iran during the late 1970s.[xxi] This in effect would also stifle any opportunity for the social contract to be modified in favor of political liberalization.
A Global Challenge
The challenges Saudi Arabia is facing as a result of its oil-based economy are not unique. Nearly all OPEC countries have looked towards the dim future prospects of their oil-based economies with heightened fear, scrambling to look for ways to diversify. Still, it remains to be seen how this diversification will change the social contract in Saudi Arabia and elsewhere. Though the past century has shown that economic freedom typically corresponds to a proportional amount of political freedom, aberrations such as China have created a model that many countries, including Saudi Arabia, are attempting to emulate. Ultimately, although Saudi Vision 2030 will likely lead to Saudi citizens receiving some degree of political liberalization, the multiple forces supporting the government’s stronghold over its people will likely allow it to continue its authoritarian rule. While it seems that the government, as opposed to the people, will be rewriting the social contract in a way that allows them to continue their authoritarian rule while curbing welfare benefits, prospects for political liberalization, although slim, remain. However, as with most things in the kingdom, the ability to achieve political liberalization doesn’t lie in the hands of the people but rather in the moral impulses of the rulers in power.
*Illustration by Mena Attia
[i] History.com Editors. “Standard Oil Geologists Arrive in Saudi Arabia.” History.com, A&E Television Networks, 27 Jan. 2010, https://www.history.com/this-day-in-history/standard-oil-geologists-arrive-in-saudi-arabia.
[ii] Barro, Josh. “Here's Why OPEC Can't Control Oil Prices Anymore.” New York Magazine. New York Magazine, December 7, 2018. http://nymag.com/article/2018/12/heres-why-opec-cant-control-oil-prices-anymore.html#comments
[iii] Kinninmont, Jane. “Vision 2030 and Saudi Arabia’s Social Contract Austerity and Transformation.” ChathamHouse, July 2017, https://www.chathamhouse.org/sites/default/files/publications/research/2017-07-20-vision-2030-saudi-kinninmont.pdf.
[iv] The Editors of Encyclopedia Britannica. “Social Contract.” Encyclopedia Britannica, Encyclopedia Britannica, Inc., 6 Aug. 2019, https://www.britannica.com/topic/social-contract.
[v] The Project on Middle East Political Science. “The Politics of Rentier States in the Gulf.” The Baker Institute, The Baker Institute, 2019, https://www.bakerinstitute.org/media/files/files/df77a3f0/krane-subsidies-pomeps.pdf.
[vi] Mammadov, Rauf, et al. “A Rentier Social Contract: The Saudi Political Economy since 1979.” Middle East Institute, 9 Oct. 2019,
https://www.mei.edu/publications/rentier-social-contract-saudi-political-economy-1979.
[vii] Joseph, Cozza. “Could Vision 2030 Reforms Destabilize Saudi Arabia?” IndraStra Global. USA, January 1, 1970. https://nbn-resolving.org/urn:nbn:de:0168-ssoar-48612-7.
[viii] Kelemen, Barbara. “Saudi Arabia from Within: Diversionary Policy of Iranian Containment?” Middle East Centre, July 5, 2018. https://blogs.lse.ac.uk/mec/2018/07/05/saudi-arabia-from-within-diversionary-policy-of-iranian-containment/.
[ix] Alkhalisi, Zahraa. “Saudi Arabia Eases Austerity after 'Very Negative' Response.” CNNMoney. Cable News Network, 2018. https://money.cnn.com/2018/01/09/news/economy/saudi-arabia-austerity-backlash/index.html.
[x] Kinninmont, Jane. “Vision 2030 and Saudi Arabia’s Social Contract Austerity and Transformation.”
[xi] General Authority for Statistics. “Censuses: Limited to Actual Hajj.” General Authority for Statistics: Kingdom of Saudi Arabia, 2017. https://web.archive.org/web/20180620024237/https://www.stats.gov.sa/en/28.
[xii] Mzezewa, Tariro. “Saudi Arabia Invites Tourists: What You Need to Know.” The New York Times, The New York Times, 27 Sept. 2019, https://www.nytimes.com/2019/09/27/travel/saudi-tourist-visa-questions.html?auth=login-google&login=google.
[xiii] Kinninmont, Jane. “Vision 2030 and Saudi Arabia’s Social Contract Austerity and Transformation.”
[xiv] Bellini, Emiliano. “ACWA Receives $320m Financing for 300 MW Saudi Project.” pv magazine International, November 16, 2018. https://www.pv-magazine.com/2018/11/16/acwa-receives-320m-financing-for-300-mw-saudi-project/.
[xv] Ghafar, Adel Abdek. “Vision 2030 & the Political Costs of Saudi Reforms – Part 2.” Vision 2030 & the Political Costs of Saudi Reforms - Part 2 | Inter Press Service, 20 Feb. 2018, http://www.ipsnews.net/2018/02/vision-2030-political-costs-saudi-reforms-part-2/.
[xvi] Seeking Alpha. “Saudi Arabia's Vision 2030: We Want It... We Need It.” Seeking Alpha, October 28, 2016. https://seekingalpha.com/article/4016337-saudi-arabias-vision-2030-want-need.
[xvii] Merced, Michael J. De La, and Stanley Reed. “Saudi Aramco Announces Plans to Go Public.” The New York Times. The New York Times, November 3, 2019.
https://www.nytimes.com/2019/11/03/business/dealbook/aramco-ipo.html.
[xviii] Joyner, Alfred. “How Strong Is Saudi Arabia's Military?” Newsweek. Newsweek, December 4, 2018. https://www.newsweek.com/how-strong-saudi-arabias-military-1233164.
[xix] Grand, Stephen. “Saudi's Vision 2030 Continues to Solicit Concerns.” Atlantic Council. Atlantic Council, August 21, 2019. https://www.atlanticcouncil.org/blogs/menasource/saudi-s-vision-2030-continues-to-solicit-concerns/.
[xx] Staff of Reporters Without Borders, “2019 World Press Freedom Index: Reporters Without Borders,” RSF, 2019, https://rsf.org/en/ranking.
[xxi] Ottaway, David. “Will Saudi Arabia's Social Revolution Provoke a Wahhabi Backlash?” Wilson Center, May 15, 2018. https://www.wilsoncenter.org/publication/will-saudi-arabias-social-revolution-provoke-wahhabi-backlash.
