Kingdom’s $90bn boost with women at the wheel

Giving Saudi women the right to drive could help the kingdom to reap as much income as selling shares in state oil company Saudi Aramco.

The lifting of the ban yesterday could add up to US$90 billion (Dh330.5bn) to economic output by 2030, according to Bloomberg Economics.

Selling a 5 per cent stake in Aramco, at the most optimistic valuation, could generate about $100bn.

Saudi Arabia ended its status as the last country to prohibit women from taking to the wheel.

“Lifting the ban on driving is likely to increase the number of women seeking jobs, boosting the size of the workforce and lifting overall incomes and output,” said Ziad Daoud, chief Middle East economist for Bloomberg Economics, in Dubai .

“But it’ll take time before these gains are realised as the economy adapts to absorbing a growing number of women seeking work.”

Ending the ban is one of the most socially significant reforms implemented by Saudi Crown Prince Mohammed bin Salman. It is also a key part of his plan to steer the economy away from its reliance on oil.

“The participation of women in Saudi Arabia’s labour market is poor,” Mr Daoud said. “With only 20 per cent of females in Saudi Arabia economically active, the country lags behind its neighbours in the Gulf, where participation averaged 42 per cent in 2016.

“Recognising this, the Saudi administration made raising the female participation rate one of its main targets in the National Vision 2030 programme, designed to modernise Saudi society.”

Adding 1 percentage point to the Saudi participation rate every year might add about 70,000 more women a year to the labour market, he said.

Having more women in the workforce will lift growth by as much as 0.9 percentage points a year, “depending on the proportion that chooses to work full or part-time”, Mr Daoud said.

Saudi Energy Minister Khalid Al Falih said ending the ban meant that “women will be more empowered and more mobile, and I think they will participate more in the job market over time, so I think it’s going to contribute to the employment of females in Saudi Arabia”.

“A secondary effect will probably be a higher demand for petrol.”