Hyper-Rentierism? Saudi Arabia’s Vision 2030 And The Social Contract In 2017 – Analysis

By Dr. Courtney Freer*

Vision 2030, at first glance, appears to be yet another major Saudi effort to lessen the Kingdom’s dependence on hydrocarbon resources – by reducing government spending on public sector employment and ramping up development in new economic sectors. Although similar visions date back to the 1970s, this plan is unique in that it will expand the government’s remit into something of a hyper-rentier arrangement.

Not only is the government meant to provide health, education, employment, and housing to its citizenry; it is also meant to actively manage the diversification process, while expanding entertainment options and enriching the social life of its citizens. For the younger generation of Saudis who have grown up with rentier benefits, such developments, especially at the hands of the young Deputy Crown Prince Mohammed bin Salman, hold appeal and could potentially open up the Kingdom socially. The rentier arrangement advocated by the Vision also, notably, involves hordes of Western consultants, who have become extensions of the ministries for which they work and thus comprise another budget line for spending on public sector employment. Year-on-year spending for consultants in Saudi Arabia rose a staggering 14.8 percent between 2015 and 2016.

That the government released a document as expansive as Vision 2030 is evidence of the large role it envisions for itself, even if dependence on hydrocarbon wealth will be diminished. Such a central role for government is logical, considering that two-thirds of the workforce is employed by the public sector. Nonetheless, Vision 2030 sets up the government, with the funds from the IPO of Saudi Aramco, as the primary developer of the new diversified economy, while also citing the need to “cut tedious bureaucracy”.

Furthermore, the Public Investment Fund (the state’s sovereign wealth fund) announced in April its plans to construct an entertainment city, roughly the size of the Las Vegas strip, south of Riyadh. It is slated to include a theme park and a safari park, and aims to promote tourism as well as to aid citizens in their efforts to “achieve a healthy and harmonious life, and provide more entertainment, joy and fun.” These new government-funded social ventures, though historically more common in the religious field, are new in the secular portion of Saudi entertainment – and this new government-styled and -funded sector is only likely to grow.

The Entertainment Authority, a new government entity established through the Vision, has taken the lead in organizing a series of concerts, comedy shows, and other performances of a type never before seen in the Kingdom. These restrictions have been largely due to the government’s centuries-old alliance with religious scholars (ulama) of the Wahhabi strand. The relationship requires Al Saud ruling family to respect a highly conservative and textualist understanding of Islam in order to maintain religious legitimacy as guardians of the two holy mosques. Wahhabi authorities focus their efforts on both cleansing Islam of what they consider incorrect religious practices (namely the ratification of innovations – from cemeteries to cinemas) as well as preserving a literal interpretation of the Qurʾan. In an effort to reconcile a wider variety of secular entertainment options with this alliance, the chairman of the Entertainment Authority, Ahmed al-Khateeb, assures that “[w]e have rejected more than 150 activities that we considered to be violating Islamic tenets [….] We will never abandon this line and will never do anything that may be against the Kingdom’s consistent policies.”

Some members of the ulama have made public complaints on Twitter, placing the blame primarily on performers themselves or on the Entertainment Authority, rather than on members of the ruling family or the government, for allowing this immoral and inappropriate entertainment. Gender mixing during Comic-Con in Jeddah, to which an estimated 7,000 Saudi-based fans flocked in February, fueled more complaints about unseemly behavior. A 2016 decision further shifted the balance of power away from the ulama, stripping them of their authority to arrest and urging them to act “kindly and gently” in their enforcement of appropriate, Wahhabi-defined, public behavior.

The increasing centralization of government authority and the government’s taking on of new social responsibilities could also alter social life more broadly by changing the position of women. For instance, the Vision states the ambitious goal of increasing the percentage of women in the workforce from 22 to 30 by 2030. Furthermore, in February, the first licenses for women’s gyms were granted, with plans to establish them in all major neighborhoods. Women’s gyms were previously marketed as expensive and exclusive health centers, and, though the new facilities will not allow competitive sports, their existence does grant women more choice in terms of entertainment options. Nonetheless, the major question of allowing women to drive remains. Deputy Crown Prince Mohammed bin Salman, the main government backer of the Vision, did state, however, that the issue is cultural, rather than religious, and that Saudi society “is not convinced about women driving.”

With subsidies being stripped and with value-added taxation (VAT) to be imposed in January 2018, some women who previously hired drivers may be less able to afford them, and the government may be forced to deal with the issue head-on. The precedent has been set in the Gulf for social liberalization to come from the top, even when it is not necessarily popularly supported. This occurred in Kuwait, when the amir decreed the right of women to vote in 2005 after it had been voted down in parliament. It remains to be seen, however, just how committed the Saudi government is to using the Vision to change the role of women in economic and social life.

Government advisers say the Vision’s budget is likely to be slashed by around 30 to 40 percent, and it will be telling which portions are maintained. The expansion of the social sphere could well be used as a hook for investment or it could ultimately be dropped due to complaints by the religious authorities. The success of the Saudi government’s venture into the entertainment sector hinges primarily on the decisions taken by Mohammed bin Salman– as well as the degree to which disapproval from the Wahhabi ulama is taken into consideration. What does seem likely, though, is that the Vision will continue to enjoy political support from primary members of the ruling family, with a recent cabinet reshuffle confirming the primacy of King Salman’s branch of the family.

The only part of the Vision on which the government has so far changed course, interestingly, is the one that seemed most straightforwardly linked to its economic goal, the reduction of allowances for public sector employees. These were reinstated in April because King Salman, as he explained, is “keen to provide comfort to the Saudi citizens.” They were also restored in the face of mounting online resistance, expressed through the hashtag “April 21 Movement”. Tweets associated with this hashtag demanded a stop to the IPO of Aramco, the restoration of benefits, the establishment of a constitutional monarchy, and the restoration of the full power of the religious police. Though it is nearly impossible to know the popularity of this sentiment, a government-sponsored poll insists that 77 percent of the population is in favor of the Vision.

What we may be seeing in the Kingdom is a wide generational shift. With some 70 percent of the population under 30, the style of 31-year-old Mohammed bin Salman, in addition to his support for more entertainment options in Saudi Arabia, holds appeal for this demographic, even though their parents may consider it socially harmful. The ruling bargain with the Wahhabi ulama may simply become less sustainable, at least in the way it has been arranged in the past, with an increasingly younger population hungry for change and a young ruler eager to provide it, at least in the social sphere. In the meantime, the goal of changing the social contract and altering rentier benefits may be fading – or at least considered unattainable.

About the author:
*Dr. Courtney Freer (@CourtneyFreer)
is an advisor at Gulf State Analytics and a Research Officer at the Kuwait Programme at the London School of Economics and Political Science. Her work focuses on the domestic politics of the Arab Gulf states with a particular focus on Islamism and tribalism.

Source:
Gulf State Analytics originally published this article


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Gulf State Analytics

Gulf State Analytics

Gulf State Analytics (GSA) assesses risks and opportunities among Gulf Cooperation Council (GCC) states for lenders, traders, investors and policymakers.

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