How Saudi Arabia’s Spending Spree Reached the End of the Line

Saudi Arabia’s Crown Prince Mohammed bin Salman launched Vision 2030, a grand transformation plan aimed at catapulting the kingdom into a futuristic utopia. The initiative promised to wean the country off its dependence on oil and establish it as a global economic powerhouse.

However, behind the glossy PR campaigns and lavish promises, a more sobering reality is emerging. Several ambitious projects under Vision 2030 have hit turbulence in recent months. The Line, a supposed “city of the future” stretching over 100 miles in Saudi Arabia’s northwestern desert, has been significantly scaled down. The Trojena winter resort, meant to rival St Moritz with its artificial ski slopes and luxury amenities, is being reined in. Even the LIV Golf tour, touted as a key component of Saudi Arabia’s bid for global sports supremacy, has been reassessed as a costly failure.

This retrenchment raises more questions than answers about the true intentions behind Vision 2030. Was it ever anything more than a grand PR exercise designed to distract from the kingdom’s entrenched economic and social problems? The skepticism is well-founded: Saudi Arabia’s history of megaprojects gone wrong stretches back decades.

The Economic Cities programme launched by King Abdullah in the 2000s serves as a stark reminder of these failures. Despite investing billions of dollars in several proposed cities, the results were largely underwhelming. The King Abdullah Economic City on the Red Sea coast never materialized into the business and tourism hub it was promised to be. Unemployment rates remained high, hovering around 12% by 2016.

A fundamental issue at play here is the failure to take a realistic view of these projects’ potential. Officials behind Vision 2030 seem to have been operating under a misguided assumption that such grandiose schemes could magically transform Saudi Arabia’s economy and society. Foreign companies often prioritize securing lucrative contracts over asking difficult questions, contributing to this illusion.

Economic analyst Ghanem Nuseibeh believes MBS inherited a system that badly needed overhauling. However, it appears little has changed since then. The same old patronage networks and crony capitalism continue to stifle innovation and genuine economic growth.

As the kingdom navigates its current financial constraints – exacerbated by the ongoing conflict in the Middle East – one can’t help but wonder if Vision 2030 was ever more than just a desperate attempt to cling to relevance in an increasingly uncertain world. If so, it’s time for Saudi Arabia to rethink its strategy and confront the harsh realities of its economic situation.

The stakes are high: continued failure could lead to widespread disillusionment among Saudi Arabia’s youth population, who have been promised a better future but face bleak prospects instead. The international community also has a vested interest in how this saga unfolds. Will Vision 2030 ultimately be remembered as a grand folly or the first tentative steps toward genuine reform? Only time will tell.

Saudi Arabia’s spending spree has indeed reached its end of the line – and it’s high time for some much-needed realism to enter the picture.