Saudi Arabia easing social restrictions to modernise economy

When Crown Prince Mohammed bin Salman laid out Saudi Arabia’s Vision 2030 in April 2016, he proposed reducing the country’s dependence on oil revenues by modernising the economy and creating a more moderate society. While the full economic impact of the plan will take a few years to be felt in the country, a series of bold moves to loosen restrictions regarding entertainment and women’s participation in society are opening up new areas of economic potential.

Entertainment

Vision 2030 places a strong emphasis on entertainment, targeting an increase in household spending on cultural and entertainment activities within the Kingdom from 2.9% to 6% of GDP. To this end, the creation of the General Entertainment Authority in May 2016 followed quickly on the heels of the launch of Vision 2030. It led to an increase in the number of film screenings and concerts, and in late 2017 the Ministry of Culture and Information announced that cinemas across the Kingdom are expected to open in March 2018 for the first time in over 35 years.

A number of events have attracted attention as being symbolic of this shift in state policy, including a Comic Con gathering, at which mixed audiences mingled in fancy dress, and Blue Man Group performances attended by mixed-gender audiences. In September 2017 women were allowed into the King Fahd International Stadium for the first time, as part of celebrations marking the anniversary of the foundation of the state. In the same month Saudi Arabia’s Public Investment Fund (PIF) launched a new company to invest in local entertainment, with an initial capitalisation of SR10bn ($2.7bn). Citing the country’s large national youth population – 12m people, or 59% of the population, are under the age of 30 – as part of its rationale, the PIF expects the company to contribute SR1bn ($266.6m) to GDP and create 1000 direct jobs by 2020.

Among the proposals outlined by the PIF is The Qiddiya Project, which seeks to transform Qiddiya, an area that lies 40 km from Riyadh, into “the Kingdom’s iconic entertainment destination”. The city will include a combination of theme parks, a sports city, natural features and wildlife, as well as facilities for events and cultural activities. These will be complemented by retail malls, outlet shops, hospitality options and residential developments. Building on the city is expected to start by April 2018 and be completed by October 2022.

The move to foster a home-grown entertainment sector reflects similar policies to develop domestic industries and reduce the number of imports in currently high-spending segments such as defence and the auto industry. The hope is that domestic leisure and entertainment options will help to capture some of the $20bn that Saudis are currently spending on travel and leisure abroad every year.

Female Drivers

Another move towards social liberalisation with strong economic potential is the increasing inclusion of women in Saudi society. Vision 2030 aims to grow the role of women in the workforce from 22% to 30% – an achievable estimate in a country where women constitute 60% of university graduates. Reaching and even surpassing this target became more likely at the end of September, when the government announced that women would be allowed to drive as of June 2018. It is hoped the move will help to address falling vehicle sales, which fell by 21% to 655,500 in 2016 from the previous year. Market research firm Frost & Sullivan estimates up to 150,000 women will get driver’s licences in the country each year.

Beach Tourism

Another initiative that has prompted talk on the loosening of restrictions to public life is the Red Sea Project, a luxurious 34,000-sq-km waterfront tourism destination on the country’s north-western coastline. The PIF’s announcement that the project will be located “in a special zone, with its own regulations,” as well as its targeting a 60:40 mix of GCC to non-GCC visitors, has prompted speculation that arrangements may be made to allow tourists to enjoy looser restrictions on social issues such as dress and gender mixing.