Saudi Arabia in a post-oil world — IR INSIDER

Over the past two decades, the need to move away from fossil fuels has become evident. Climate change has started to impact the world, and all over the world acceptance of theory has increased. In addition to the environmental impact, the supply of fossil fuels is limited and will be inevitably dry up. Fortunately, these concerns have been met by increased investment and the deployment of clean energy alternatives.

Sales of solar power, for example, have increased 25% from 2019 to 2020 in the United States. In total, solar and wind represented more than 80% of new electrical capacity in 2020 and 100% of new electrical capacity in the first quarter of 2021.

However, these changes and projections for the future have left some countries with difficult prospects. In 2020, more than 60% of the Saudi population exports were oil, while finished 40% of Saudi GDP depends on oil. In the past, these revenues helped Saudi Arabia become one of the wealthiest countries in the world. In 2017, Saudi Arabia been 17th in GDP per capita (PPP). However, with the phasing out of fossil fuels, the future looks bleak.

In response to long-term trends in the oil industry, Crown Prince Mohammed Bin Salman introduced a new economic plan called Vision 2030. This plan focuses on diversifying the Saudi economy to thrive in a post-oil world. It contained a large number of initiatives, ranging from tourism for manufacturing, as well as a number of high-level collaborators. The focus on technology is central to many of these transitions.

Explicitly, the plan Remarks that “sophisticated digital infrastructure is an integral part of today’s advanced industrial operations. It attracts investors and improves the fundamental competitiveness of the Saudi economy. Refusing to give up the energy sector, Saudi Arabia recently engaged direct 50% of new investments towards renewable energy resources.

The huge economic reserves built from past reliance on fossil fuels have enabled massive investments in a variety of projects to achieve these goals. For example, in 2017 King Salman approved a $3 billion investment investment in New Taif. This project aimed to build a new airport, a residential center and a technological oasis.

This project is far from being an exception, with billions being poured into a variety other similar projects. Beyond economic planning, Vision 2030 sets out to empower women. For example, women were granted the right to drive in Saudi Arabia in 2018. However, these social initiatives have more broadly been a failure. In 2021, Saudi Arabia was classroom 147 out of 156 in the Global Gender Gap report, representing the progress that still needs to be made.

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