The change Saudi Ara­bia needs

Speed is es­sen­tial for po­lit­i­cal and cul­tural re­forms, es­pe­cially in the face of op­po­si­tion

Bloomberg Businessweek (North America) - - Contents -

No one can fault Deputy Crown Prince Mo­hammed bin Sal­man for lack of am­bi­tion. The 30-year-old son of Saudi Ara­bia’s king has plans to sell shares in the world’s largest state oil com­pany and cre­ate the largest sov­er­eign wealth fund. The idea is to help the coun­try di­ver­sify its econ­omy. The fund would in­vest around the world while help­ing Saudi Aramco ex­pand be­yond oil and into con­struc­tion, engi­neer­ing, and other in­dus­tries. It’s a bold move, and its scale alone may help Saudis un­der­stand the mag­ni­tude of the chal­lenge they face.

At the same time, it will take more than this to pro­duce the change the coun­try needs. Suc­cess re­quires mov­ing fast on the kinds of po­lit­i­cal and cul­tural re­forms that usu­ally take decades.

A pop­u­la­tion ac­cus­tomed to re­ly­ing on im­mi­grant la­bor and gov­ern­ment as­sis­tance will have to work more and pay taxes. At the same time, the state will have to be more re­spon­sive to the cit­i­zens that it’s now ask­ing to start busi­nesses and fend for them­selves. It will have to pro­vide them with bet­ter health care and an ed­u­ca­tional sys­tem that helps them suc­ceed in a new econ­omy. More women will need to work (and drive to work, too). Fewer princes will be able to en­joy lux­u­ri­ous life­styles at state ex­pense. And when there’s un­rest, the gov­ern­ment will have to re­sist the temp­ta­tion to buy off the op­po­si­tion.

This is a tall or­der, to put it mildly. For Saudi Ara­bia to be­come the kind of re­gional fi­nan­cial-ser­vices hub that Prince Mo­hammed en­vi­sions would be harder still. Ul­tra­con­ser­va­tive re­li­gious lead­ers and much of his own fam­ily would fiercely op­pose the kinds of changes needed to make their coun­try at­trac­tive to em­ploy­ees of for­eign com­pa­nies.

The prince has moved sur­pris­ingly quickly to cut waste and sub­si­dies and is push­ing for large-scale pri­va­ti­za­tions. He de­serves sup­port. But he’ll also have to show he’s ready to do what it takes to suc­ceed—and sooner than he thinks. <BW>

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