Analyzing and forecasting the Gulf Cooperation Council's geopolitical environment

Hyper-Rentierism? Vision 2030 and the Social Contract in 2017

By Dr. Courtney Freer
June 13, 2017

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.

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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.