Kingdom’s reform steps up a gear

▶ End of the ban on women drivers has huge signinficance

The political and economic development of any country consists of an infinite number of small steps, punctuated every so often by a giant leap forward that changes the game completely.

The decree issued by Saudi Arabia’s King Salman, lifting the ban on women drivers in the country, falls firmly in the latter category, an event that will long be remembered in the country’s social and cultural history. The impact on the kingdom’s economy, meanwhile, is sure to be no less important.

King Salman’s decree removes in one fell swoop a major impediment to increased participation of women in the workplace, one of the government’s key goals as part of its National Transformation Programme for 2020. The inclusion of ever more women in the workplace means a rise in disposable incomes, benefiting all segments of the economy.

Banks and insurance companies are expected to see particular benefits, given the anticipated rise in car loans and car insurance policies once the ban on women driving is lifted next June. Retail and hospitality are also set to gain.

The lifting of the driving ban

King Salman’s decree removes a major impediment to increased participation of women in the workplace

is not a magic wand that in and of itself will prompt droves of Saudi women to enter the workforce, with plenty of social and economic factors still to contend with. But the decreased reliance on expatriate male drivers will still boost household finances even if women choose not to work.

The estimated 3,800 Saudi riyals (Dh3,721) the average household spends per month on drivers can now be spent elsewhere. That is more likely to be spent within the domestic economy, rather than remitted out of the country.

The change in Saudi Arabia’s transport equation may not to be everyone’s benefit. Ride-sharing apps Careem and Uber may well see business drop as many of their female clients get behind their own sets of wheels. Both companies remain optimistic though, with Careem noting that it has already created plenty of jobs for Saudi women.

Saudi women’s newly-gained ability to drive will not solve all the problems of the country’s economy in one fell swoop, with plenty of vital reforms still to be enacted. But the lifting of the ban marks a historic moment for the country, whose economy can but gain as a result.