Russia — Saudi Arabia: looking into the future
The most representative Saudi delegation has visited the St. Petersburg International Economic Forum in May 2018. Dialogue between the two countries and a common vision of challenges in the global economy have already made it possible to sign an agreement on limiting of oil production by OPEC+, which has stabilized prices in world markets after their dramatic fall. But bilateral cooperation between our states cannot and should not be limited to only the oil industry. Both Russia and Saudi Arabia are interested in diversifying economies and reducing dependence on oil and gas revenues through the development of industry and the latest technologies. Plan of economic reforms “Vision-2030” (Saudi Vision-2030), the author of which is energetic and popular in the country Crown Prince Mohammad bin Salman, assumes large-scale investments in industry and high technologies around the world including Russia.
And, of course, football. It is our teams that open the World Cup 2018.
Oh sport, you are… everything!
World Cup 2018: rules of the game and Saudi football
Business and big-time politics are undoubtedly urgent things. But there is something more important — at least almost two and a half billion football fans think so who are waiting for the opening of the World Cup 2018.
Football has a symbolic meaning for Russia and Saudi Arabia. Confederations Cup came to an end in Russia last year and very few people know that Saudi Arabia and personally Fahd Abdul Aziz Al Saud, its King, stood at the origins of this movement. The first game of the World Cup 2018 will be held at the Luzhniki Stadium in Moscow this year on 14, June, marking the beginning of the world football event even more significant than the Olympic Games as experts and fans of all ranks and countries say. Russia and Saudi Arabia will face together in the first game of World Cup.
Juan Antonio Pizzi, the coach of the Saudi Arabia national football team, shared his expectations from the opening match with the Russian team: “It’s a special honor to take part in such a game. It is important for us to start well in the group. We hope that we will be able to resist the strongest teams. In the near future we will develop the best strategy to play at this level”.
Russia is ready
Thirty-two of the world’s best national teams will reveal the winner on Russia’s football pitches from June 14 to July 15. The matches will be shown by hundreds of TV companies. The current World Cup with no doubt will become a part of the history of world football: the World Cup will be held for the first time on the territory of two parts of the world — Europe and Asia. In addition, also for the first time the tournament will use a system of video replay which will clearly show whether a goal is scored with a violation of the rules or not.
Execution of such events like a football world championship is not an easy test for any country. Half a century ago when the number of participants in the final stage was limited to 16 teams, all the necessary infrastructure was reduced to a stadium with large capacity and several luxury hotels. Now the number of finalists has doubled and the requirements of the International Football Federation to the organizers soared to the highest levels. The world championship has ceased to be even a large, but still a local sports tournament. Now this is a huge forum of global significance and attention.
The matches of the current tournament will be held in 11 cities of Russia. The organizing committee assumed a huge amount of obligations when signing a contract for its holding. The requirements for these sports facilities are prescribed in the approved specification of the stadiums up to the last detail. Everything is agreed: from the capacity of the stands, VIP-sectors and sky-boxes to the level of illumination of the arena and the quality of the pitch. It goes without saying that the country simply did not have sites of this level until recently. However, the infrastructure for the football world championship implies not only stadiums, but also bases for living and training of participating teams. 64 objects were prepared in 31 cities of the country in order to have the opportunity to choose for them. In addition, these are hundreds of hotels for officials and guests of the championship. This is thousands of kilometers of new roads and railways, junctions, stations ... By the way, for the first time you can travel to matches from city to city for free at this tournament. In this regard it is enough to demonstrate the fan’s passport and ticket for the upcoming game.
However, the most important innovation of the upcoming championship is in the other. For the first time in history, a video replay system will be used at tournaments of this level. Not so long ago, the former FIFA president João Havelange stated that the main secret of the popularity of football lies in the inviolability of its rules. “We offer fans a performance, the component of which is the human factor: mistakes made by players, coaches and, last but not least, by referees. Controversial goals, unobvious offsides make our game even more attractive,” as the Brazilian stated.
Twenty years passed and the opinion of the International Football Federation has changed radically. The constant scandals associated with the incorrect definition of the “offside” position and fake penalties angered even the most conservative officials. World Cup 2010 in South Africa which was marked by several serious mistakes of the referees has broken the camel’s back. After that, FIFA management began to consider the idea of introducing video replay seriously. Seven years have passed before the initiative was implemented, not so much given the fact that the rules of football in their modern form exist for almost a century and
a half. For the first time at the international level the novelty was officially tested at the Confederations Cup which was held in our country last year. And even at that time it allowed to find and correct several referees’ mistakes.
How does it work? The Video Assistant Referees system consists of several monitors and a special computer program that allows you to track all actions of players on the pitch during a television show. Assistant referees may be in a special room at the stadium and even outside the arena. If necessary the assistants must quickly read the controversial play and report their verdict by radio.
Exactly the referee, as a rule, acts as the initiator of using the Video Assistant Referees system, although the tip may come from his attentive assistants. VAR system is not cheap, the price for the kit is one million two hundred thousand dollars. In addition, the maintenance of equipment will cost another hundred thousand dollars for a year of operation. However, the observance of fair play is certainly worth such investments.
An opening match in which the Russians will meet with the Saudi Arabia national football team on 14th of June has huge significance for the hosts of the championship. However, it will be very important and for the guests. “Falcons” (it’s the name of the team at home) will take part in final part of the world championship for the fifth time in their history, though last time it happened for a long time ago — in 2006.
The authorities of KSA who support national football do not like this state of affairs. Not surprisingly that there are big changes in the team in the last years. Basically, these changes relate to the position of the head coach: few of the head coaches manage to stay in their seats longer than for a season or two. The Dutchman Bert van Marwijk had a good chance to surpass his colleagues, who, in fact, brought the “falcons” to the final part of the World Cup. However, the former midfielder himself refused to renew the contract with the federation and soon has concluded the contract as the head coach of the Australian national football team.
Spaniard Juan Antonio Pizzi has replaced him last year in the autumn. Serious changes took place in the team along with his appointment. So, goalkeeper Mohammed Al Deayea has finished his career who is the second player of all time in terms of the number of matches played in the national team. The famous goalkeeper, who defended the honor of his country at four world championships, spent 178 games. Now the captain of the team Osama Hawsawi is the most experienced player in Saudi Arabia. His employment record is also impressive: the 34-year-old defender came out on the pitch in a green jersey for 130 times.
Until recently absolutely all players of the national team played in the clubs of the local Premier League. The overwhelming majority at the same time represented the capital “Al-Hilal”, “Al-Shabab” and “Al-Nasr”. However, more recently, the national team has its own foreign players. 23-year-old midfielder Fahad Al-Muwallad moved to the Spanish “Levante” in the winter, becoming one of the first Saudi Arabian football players to perform abroad. Two more players moved to Spain after him: Yahya Ali Al-Shehri signed a contract with “Leganes”, and Salem Al-Dawsari joined “Villarreal”.
Of course, even the invitation of a coach from the Pyrenees and the presence in squad of players with experience in the Spanish league unlikely helps the Saudi Arabia national football team to play in the style of “Real” or “Barcelona”. But they can still count on qualifying from a group. So far, the best result of the Saudis was getting into the 1/8 finals at the World Cup 1994. Just to achieve the same result as the main objective for the tournament faces Juan Antonio Pizzi.
Saudi Arabia considers its bilateral relations with Russia as strategic and very important
Dr Rayed Krimly, Ambassador of Saudi Arabia in Russia, in an Interview with RV.
RV: Mr. Ambassador, you arrived in Moscow in the midst of the Russian winter. What were your first impressions?
I arrived in Moscow last November, and had to adjust to a Russian winter where the weather is very different from what we are used to in Saudi Arabia. However, I was immediately and greatly impressed by the effective and continuous efforts to open the roads and remove the cumulated snow even during snow storms.
I was also impressed by Russian families and children enjoying the snow and playing in the numerous spacious parks in Moscow.
RV: In the early days of your mission you carried out a number of important negotiations concerning the relations between our countries. November 28, 2017 you met with the representative of the Russian president for the Middle East and Africa, Deputy Foreign Minister Mikhail Bogdanov. According to the Russian Foreign Ministry, during the meeting the sides discussed issues of bilateral cooperation “on the implementation of agreements agreed at the highest level.” What are the priorities in this agenda?
I met many Russian officials in the last six months, but my most frequent meetings are with Mr. Bogdanov. Mr. Bogdanov is a highly skilled and experienced diplomat who speaks Arabic fluently. He was kind enough to meet me in my very first day in Moscow. He is considered with the highest regard in Saudi Arabia and all the Arab World.
RV: But let’s return to the bilateral agenda. Economic ties. First, oil. Secondly, what besides oil?
Saudi Arabia considers its bilateral relations with Russia as strategic and very important. I am fortunate to have arrived at a period where the bilateral relation reached its strongest levels ever. The leadership in both countries are determined to realize the great potential of increasing political, economic and cultural cooperation. Since the Crown Prince visited Russia in 2015, our bilateral cooperation began to deepen and expand in all fields. As two large producers of energy, our two countries worked effectively together to stabilize the World energy market. Our cooperation continued to expand, culminating in the historical visit of King Salman to Moscow last fall. Many agreements were signed covering wide areas of mutually beneficial cooperation in military, investment, trade, agricultural, educational and technical fields.
RV: In 2016, Riyadh unveiled a program Vision 2030 — a long-term plan for the transformation of the Kingdom’s economy for the next 15 years to get rid of oil dependence. For Russia this is also an urgent issue. Do you know the secret of how to do this?
Oil plays a major part in the economy of both Russia and Saudi Arabia. However, for sustained development our most important and non-depletable resource lies in the skills, and capabilities of our people. This is why the Saudi 2030 Vision, led by Crown Prince Mohammad bin Salman, places significant emphasis on empowering our younger generation, who constitute the majority of our population, to assume their natural role as leaders and beneficiaries of change and innovation.
RV: Neom is the city of the future, an innovation center in the northwest of Saudi Arabia. The authorities of the Kingdom promise that the city will become a free economic zone. Do you plan the Russian companies’ participation in this
All our projects and economic sectors welcome foreign investments from all countries including Russia. Both Russia and Saudi Arabia are building strong and dynamic relations between the public and private sectors. Our business leaders are meeting directly and frequently with their Russian counterparts. I just returned from the 10th Economic Summit “Russia — Islamic World” in beautiful Kazan where a large Saudi delegation, including many business leaders, participated. Even a larger delegation of 55 Saudi investment officials and businessmen attended the 22nd St. Petersburg International Economic Forum.
RV: In December 2017, a press conference was held in Moscow by the head of the Saudi Center for Humanitarian Aid and Humanitarian Operations named after King Salman, adviser to the Royal Council Abdullah Al Rabiah. Summing up this discussion, you noted that Saudi Arabia is interested in cooperation with Russia on issues of Middle East settlement, social and humanitarian cooperation. Are there any specific plans?
The King Salman Center for Humanitarian Aid and Operations is the leading provider of urgently needed humanitarian assistance to the people of Yemen, as well as to all areas of conflict and suffering from Syria, to Myanmar, to sub-Sahara Africa. It provides aid and medical care regardless of political, ethnic or sectarian divisions. For instance, the only hospital in Sa’da, the center of the Huthi militias in Yemen, was built, operated and is still supplied by Saudi humanitarian assistance. The King Salman Center and the Russian Emergency and Relief authorities are preparing a memorandum of understanding to expand cooperation in both the International Organization level and the bilateral technical level.
RV: The Russian and Saudi teams will open the World Cup. What is your forecast not only for this match, but in general: who is the winner-2018?
The World Cup represents a great opportunity for thousands of Saudi fans to visit Russia and experience first-hand the natural beauty and warm hospitality of Russia. Misconceptions and stereotypes are the product of ignorance where Hollywood movies miss represent the realities of both Russia and Saudi Arabia. Therefore, it is very important to increase people-to-people contacts. Russians and Saudis love football and look forward to the opening match between their teams, but most probably neither will play in the final match. Let us just enjoy the games, and remember that football is full of excitements and surprises.
Commodity turnover of Russia with Saudi Arabia
Russia’s trade with Saudi Arabia in 2017 composed $915,198,199 having increased up to 86.14% ($423,521,278) in comparison with 2016.
Russia’s exports to Saudi Arabia in 2017 composed $770,682,488 having increased up to 119.62% ($419767831) in comparison with 2016.
Russia’s imports from Saudi Arabia in 2017 composed $144,515,711 having increased up to 2.67% ($3753447) in comparison with 2016.
Russia’s trade surplus with Saudi Arabia in 2017 was positive in the amount of $626,166,777. Positive surplus have increased to 197.96% ($416,014,384) in comparison with 2016.
Saudi Arabia interest in the foreign trade turnover of Russia in 2017 composed 0.1567% against 0.1051% in 2016. Saudi Arabia took 65th place according to the interest in the Russian trade turnover in 2017 (75th place — in 2016).
Saudi Arabia interest in the export of Russia in 2017 composed 0.2158% against 0.1229% in 2016. Saudi Arabia took 56th place according to the interest in the Russian export in 2017 (70th place — in 2016).
Saudi Arabia interest in the import of Russia in 2017 composed 0.0637% against 0.0772% in 2016. Saudi Arabia took 76th place according to the interest in the Russian import in 2017 (75th place — in 2016).
According to http://russian-trade.com
Russia’s Exports to Saudi Arabia
The major share of Russian exports to Saudi Arabia in 2017 (and in 2016) was accounted
for the following product types:
- Food products and agricultural raw materials — 44.59% of Russia’s total exports to Saudi Arabia (70.29% in 2016);
- Mineral products — 35.38% of Russia’s total exports to Saudi Arabia (1.22% in 2016);
- Chemical products — 8.09% of Russia’s total exports to Saudi Arabia (13.08% in 2016);
- Metals and products from them (HS codes 72-83) — 5.66% of Russia’s total exports to Saudi Arabia (6.16% in 2016);
- Wood and wood products — 3.39% of Russia’s total exports to Saudi Arabia (7.35% in 2016);
- Machinery, equipment and vehicles — 1.14% of Russia’s total exports to Saudi Arabia (1.45% in 2016).
The largest gains in Russia’s exports to Saudi Arabia in 2017 in comparison with 2016 were recorded for the following product groups:
- Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes — an increase of $268388414;
- Cereals — an increase of $52,953,404;
- Iron and steel — an increase of $29,768,954;
- Animal or vegetable fats and oils and their cleavage products prepared edible fats; animal or vegetable waxes — an increase of $21,256,073;
- Cocoa and cocoa preparations — an increase of $17,755,820;
- Rubber and articles thereof — an increase of $15,020,517;
- Paper and paperboard; articles of paper pulp, of paper or of paperboard — an increase of $4,888,999;
- Edible vegetables and certain roots and tubers — an increase of $4,626,093;
- Pharmaceutical products — an increase of $3,858,630;
- Vehicles other than railway or tramway rolling stock, and parts and accessories thereof — an increase of $2,438,173.
Moscow — Saint Petersburg — Riyadh
At SPIEF-2018 Saudi Arabia sent the most representative delegation in the history of participation in this forum. It consists of ministers, governments heading the economic unit, as well as heads of the largest companies in the kingdom — more than 150 delegates in total.
At the beginning of the year the delegation of KSA visited Moscow to discuss the format of participation in the St. Petersburg International Economic Forum (SPIEF) scheduled for May 2018. During the negotiations between the representatives of the Saudi Arabian General Investment Authority (SAGIA) and the executive management of the Roscongress Foundation, the parties discussed technical issues: the design of the Saudi stand in the SPIEF exhibition area, the formation of the business and cultural program of the visit, the holding of the Russian-Saudi round-table meeting and the signing of an agreement on cooperation between SAGIA and the Roscongress Foundation under the SPIEF. Intergovernmental Russian-Saudi agreements were also signed in the Forum. Stressing the importance of interaction between the parties, Anton Kobyakov, presidential adviser of the Russian Federation, the executive secretary of SPIEF Organizing Committee, noted that “Saudi Arabia has been and remains an important Middle Eastern partner of Russia.
The participation of the delegation of KSA in the forum allowed our countries to form new agreements in the field of international economic and cultural cooperation”. Representatives of SAGIA stressed that Salman bin Abdulaziz Al Saud, the King of Saudi Arabia, sent the most representative delegation in the history of participation in this forum at the SPIEF. It included ministers of economic profile, as well as heads of the largest companies in the kingdom — more than 150 delegates in total.
Preparation for the forum began in the autumn. The Department of Energy and the Ministry of Industry and Trade of the Russian Federation organized the first Russian business mission to Saudi Arabia on 1–2 November 2017. The delegation consisted of more than 50 top managers of Russian companies, including Russian Railways, Sinara group, KAMAZ, Nevamash, Gazprom, Sibur, Lukoil, TMK Company, United Heavy Machinery Plants, and several others. Saudi Arabia plans to invest in more than 25 Russian projects in the sectors of production of consumer goods, agriculture, real estate, infrastructure, oil and gas sector as press service of the Ministry of Industry and Trade reported.
At the same time Denis Manturov, the Minister of Industry and Trade of the Russian Federation, met with Khalid Al-Falih, the Minister of Energy, Industry and Mineral Resources of KSA. The Russian Direct Investment Fund (RDIF) and the Saudi Fund PIF have agreed to establish an Investment Energy Fund jointly with the Saudi Oil Company. Positive dynamics is observed in cooperation between RDIF and the Saudi Arabian Sovereign Fund PIF. Investments in the integrated development of the territory of the former Tushino airfield are approved.
An intergovernmental commission of the two countries was held alongside with the business mission, the result of which was the announcement of the intention to simplify the visa regime between Russia and the kingdom, to open direct flights between capitals, and the intention to cooperate in the aluminum market in analogy with the OPEC+ deal, and intention regarding joint participation in the LNG and other energy projects were expressed. Alexander Novak the Minister of Energy of the Russian Federation, co-chairman of the commission for trade, economic and scientific-technical cooperation said that Russia and Saudi Arabia have discussed the possibility of launching direct flights between the capitals. In turn, State Corporation Rosatom is ready to join a large-scale initiative to create a modern nuclear cluster in the kingdom until 2030 including the construction of 16 modern nuclear power units.
Another business mission took place a month later in agriculture sphere in the middle of December 2017. It was attended by representatives of ministries, and almost two dozen companies, including agricultural holding “Belaya ptica”, the Trade House “RIF”, UNICONF, ZARECHNOE Group, Baltika and Vologda Ivan-tea. The parties have agreed to work out the possibility of supplying wheat to Saudi Arabia (now only barley is supplied), meat, and confectioneries.
In the first half of 2018 an exhibition of Russian goods could be held in Riyadh. Russian Federation is ready to bring its IT-products and even domestic cartoons and films to Saudi partners — now they open cinemas in the kingdom. And finally — the city of the future: a fantastic innovative project conceived in the kingdom. According to the Saudi side, the total investment will be $ 500 billion. In this project Russian companies are interested in work in the field of solar energy, healthcare, education, artificial intelligence technologies, high-speed transport and port infrastructure for the transfer of agricultural products.
It should be recalled that in 2016 following the results of the Russian-Saudi intergovernmental commission, an agreement on the construction of a medical research center and a factory for the production of biopharmaceuticals in Saudi Arabia, an agreement on the construction of a plant for the production of bioprotein by JSC “RusGazEngineering” as well as memorandum of understanding between the joint-stock financial corporation “Sistema” and Wafrat Al Tawasul on the establishment of a Russian-Saudi investment company were signed.
The activation of Russian-Saudi relations began in the early 2000s. There were documents on intergovernmental cooperation in the field of oil and gas, culture and sport (between the State Committee of Sport of Russia and the State Organization for Youth Affairs of Saudi Arabia), as well as memoranda of cooperation between the Russian Academy of Sciences and the Center for Scientific and Technical Research of Saudi Arabia and on cooperation between Chambers of Commerce and Industry, which expanded the legal framework of relations between the countries. The state visit of Vladimir Putin, Russian President, to Riyadh in February 2007 is the first visit of the head of the Russian state to the Arabian Peninsula in history which has become a powerful impetus for the further development of bilateral relations. A package of documents was signed, among which an agreement between the government of the Russian Federation and the government of KSA on air communication, an intergovernmental convention on the avoidance of double taxation of income and capital; Memorandum on cooperation between the Federal Agency for Culture and Cinematography of the Russian Federation and the Ministry of Culture and Information of the Kingdom; an agreement on cooperation between the Russian news agency “RIA Novosti” and the Saudi news agency.
A new turn in political dialogue with the leadership of the kingdom is also noted in recent years. Vladimir Putin repeatedly received Crown Prince Mohammad bin Salman: “on the margins” of the XIX St. Petersburg International Economic Forum on June 18, 2015; October 11, 2015 — in Sochi; May 30, 2017 — in Moscow. Putin and Mohammad bin Salman held a meeting “on the margins” of the G-20 summit in Hangzhou, China on September 4, 2016. In November 2015 the Russian president met with Salman bin Abdulaziz Al Saud, the King of Saudi Arabia, on the sidelines of the G-20 summit in Antalya, Turkey. The leaders of the two countries regularly call each other discussing key aspects of the bilateral and regional agenda. The King visited Moscow in 2017.
An intensive dialogue is supported by the leaders of the foreign affairs ministries of Russia and Saudi Arabia. Sergey Lavrov and Adel al-Jubeir exchange working visits, meet in international forums. In September 2017, the Russian minister visited Saudi Arabia and was received by the King. Mikhail Bogdanov, the Russian President’s special representative for the Middle East and Africa, Russian Deputy Minister of Foreign Affairs, has repeatedly visited the Kingdom. There are contacts on the parliamentary line. Valentina Matvienko, Federation Council Speaker, stayed on a visit to Saudi Arabia, where she met with the country’s leadership, the chairman and members of the Kingdom’s Advisory Council in 15 – 17 of April 2017.
Ramzan Kadyrov, the head of the Chechen Republic; Rustem Khamitov, the head of the Republic of Bashkortostan have visited the Kingdom. Yunus-Bek Yevkurov, the head of the Republic of Ingushetia, has visited KSA in November 2016. Saudi Arabia has shown an interest in cooperation with Tatarstan in the field of growing cereals and processing milk for further exports to the kingdom. The following areas are considered as promising: development of ties between PJSC “KAMAZ”, PJSC “Kazan Helicopters”, KMPO JSC, OJSC “Kazancompressormash” (Kazan Compressor-Building Plant) with Saudi companies in the field of deliveries of engineering products, provision of engineering services for the development of oil fields and services for repair of oilfield equipment.
Technologies VS petroleum: plan-2030
Last autumn Saudi Arabian authorities have lifted the ban on calls via the Internet, allowing, in particular, messengers WhatsApp and Skype. However, this is only a small detail of the comprehensive modernization that has begun in the Kingdom. The budget of Saudi Arabia in 2018 will be the largest in the history. It is not just about the quantity, but also about the quality of expenses aimed at diversifying the economy and reducing its dependence on oil. Economic restructuring is an essential component of the plan “Vision-2030” (Saudi Vision 2030) initiated by Crown Prince Mohammad bin Salman al Saud.
The Kingdom is ready to increase expenses to record levels of 978 billion riyals (261 billion dollars). It was not easy to adopt the budget: in 2017, the country entered a recession, experiencing a 0.5% reduction, but the government optimistically estimates the forecast for 2018: increase up to 2.7%. A key feature of the current budget is the emphasis on structural reforms. The authorities intend to reduce subsidies for the energy sector:
it is expected that this step will free up funds for other parts of the economy, for example, for infrastructure. Plans are ambitious.
On 25th of April 2016 Crown Prince Mohammad bin Salman announced the program “Vision-2030” (Saudi Vision 2030) designed to confirm the status of the kingdom as “the heart of the Arab and Islamic world, the investment center and the hub that connects three continents.”
Based on three pillars — society, economy and nation — the program is designed to reduce the dependence of the kingdom on oil revenues, modernize the economy, and give a new impetus to the development of high technology, education, medicine, infrastructure and tourism. The energy sector of the program envisages an increase in the assets of the Saudi Arabian Public Investment Fund (PIF), an increase in use of goods, services and labor in the oil sector, an increase in revenues from non-oil exports, and the IPO by oil company “Saudi Aramco” and the optimization of energy subsidies. A separate issue is an increase in “local content”, in other words, import sub-
The appearance of the program “Vision 2030” was partly determined due to the fall in oil prices in 2014. Many state programs were under the threat of failure, the pace of construction began to decrease, and some infrastructure projects were frozen. In 2016, the budget deficit pushed the Saudis to foreign borrowings for the first time, which allowed the government not only to inject additional funds into the economy but also to avoid an increase in the tax burden. Meanwhile, at first it seemed that the state structures were not ready for such a volume of announced reforms. Some ministries were merged or transformed, new structures were created. But things got
Saudi Arabian Public Investment Fund (PIF) created in 1971 to stimulate exclusively its own economy; according to the reform plan it should become one of the largest sovereign funds in the world and should invest outside the kingdom.
In addition, Mohammad bin Salman, the successor of the Saudi throne, announced the project to build an innovative city on the shores of the Red Sea. According to the forecasts the volume of investments will make 500 billion dollars and the number of robots in the city will exceed the number of people. The super-city already has a name — NEOM. Investments are expected from the government, Public Investment Fund (PIF), sovereign investment fund of the Kingdom, as well as local and international private investors, as Bloomberg reports. Russian companies are also interested in the project.
NEOM will be built from scratch, in a new location; this is a unique opportunity to create a city that will differ from everything that has been built for hundreds of years,” prince said. The super project plan includes the construction of a bridge across the Red Sea which will connect Saudi Arabia and Egypt. The area of the city is almost 26 thousand square kilometers. At the same time, NEOM can become “the world’s first independent special zone that extends to the territory of three countries”: in part it will be located in Egypt and
As Stefan Hertog, Professor of the London School of Economics, told Bloomberg, the project will most likely be implemented according to the model of the “free zone” (earlier in the Middle East something similar was embodied in Dubai). In such zones not only economic benefits for residents but also their own legislation apply.
The project initiators assume to implement a new concept of employment of labour in the city NEOM: to attract highly qualified personnel, and to give robots whose number “will exceed the population of the city” all tasks related to monotonous or physically demanding work. Priorities for the NEOM economy are nine areas, including digital technologies, new energy, biotechnology and media. “The concentration on these sectors will stimulate economic growth and diversification,” the Saudi authorities are sure.
The reforms of Mohammad bin Salman are focused on economy of Saudi Arabia that to a greater extent should comply with the realities of the modern world. In other words, we are talking about its new edition. As they say now: edition 2.0.
Interest sale in the state-owned oil giant Saudi Aramco, the opening of the stock market to attract foreign investment and the creation of the world’s largest sovereign wealth fund are the most important components of the reform program. According to the chief executive officer of Saudi Aramco, Amin Nasser, the IPO of the state oil giant is scheduled for the second half of 2018.
According to Mohammed al-Tuwayjri, Saudi Arabia’s Minister of Economics and Planning, the management of the oil market should become a part of the strategy for the future kingdom, taking into an account that additional revenues from oil are planned to be transferred to PIF, which will basically help Riyadh to rebuild the economy. The authorities also expect that oil prices will still grow, which will increase the cost of Saudi Aramco, whose revenues also came from PIF. Finally, Saudi Arabia relies on stronger global economic growth, an increase of oil consumption and a natural decrease of rate on existing fields to stimulate demand for oil in the kingdom itself. Prince Mohammad believes that in 2018 prices will be “significantly higher” against the background of these factors.
“We should not be afraid of” Khalid Al Falikh, Saudi Minister of Energy, said at the January forum in Davos. In his opinion, shale oil production (mainly in the US) cannot fully meet the fast-growing demand — except in the short term.
Gary Ross from S&P Global Platts says that Saudi Arabia has convinced the whole world that it intends to maintain oil prices in the long term. In 2019, it is expected that the agreement on the reduction of production which was concluded by KSA with Russia should be completed, but it is expected that Saudi Arabia will insist on its extension. And for internal needs an alternative is provided. In April 2017, the Saudis launched a plan to develop solar and wind power stations, which is estimated at $30 – 50 billion. By 2023 it is planned to put into operation about 30 projects with a total capacity of
But speaking about the future, do not forget about today’s day. The reality is that: high technology has already received an official residence permit in Saudi Arabia. In the truest sense of the word. At the investment forum Future Investment Initiative, which was held in October 2017 in Riyadh, the capital of the Kingdom, the Saudi side granted citizenship to the robot Sofia, the brainchild of the American company Hanson Robotics. “Iron Lady” impressed those present with expressive facial expressions and advanced skills in speech recognition and synthesis. In response to congratulations on the new status, Sophia’s artificial intelligence voiced a small speech expressing grateful for the vote of confidence. To be continued…
The New Saudi Arabia: Why is Mohammad bin Salman’s popularity rising among young people
Three and a half years have passed since King Salman assumed power in Saudi Arabia — slightly less than a single term for leaders in Western democratic countries. Yet this brief period has witnessed profound political and economic transformations. Their success, both inside Saudi Arabia and in the broader region, has been remarkable.
It is all the more remarkable because the changes have occurred in a country long characterized as conservative, cautious, and even resistant to change — defying low expectations. Internal reforms include the repair of an antiquated system of government by promoting young people, the largest segment of the population. Foreign policy changes include an intensification of alliances, old and new, and unprecedented firmness toward countries that have long understood Saudi restraint as weakness or incapacity.
King Salman came to power at a very difficult period and chose to inject new blood into government by appointing his son Mohammad bin Salman as Crown Prince. The latter, at 32, has now taken on some of the most complicated and difficult political and economic responsibilities in the world. He faces three waves of destabilization. The first is organized terrorism. The second is the volatility of many countries in the region due to the 2011 – ’12 Arab revolutions, which led to the rise of militias and the collapse of government structures. The third is Iranian interventions in the region, which include exporting revolution, fomenting crises, exacerbating sectarianism, and empowering militias such as the Houthis of Yemen. These waves have swept in as great powers and international bodies are withdrawing from the region.
In response to this turmoil, King Salman and Crown Prince Mohammad bin Salman have adopted a range of strategies, running along three basic tracks:
First, they have reprioritized Saudi foreign policy, designating an all-out war on terrorism as the principal objective and building an Islamic military alliance to wage it. The alliance, comprising 41 Arab and Islamic countries, aims to protect all member states’ security and stability and thereby strengthen global security. It also provides invaluable fortification to Saudi Arabia, the focal point of Muslim prayer and one of the world’s primary targets for terrorism.
The second track — a function of the new attitude of “firmness” — is to stand against Iranian interventions. Notably, Iran has instrumentalized Yemen’s Houthis to form a state within a state that cripples Yemen and attacks Saudi Arabia. The new foreign policy aims to roll them back. Firmness also manifests in the Kingdom’s effort to stop Qatar from destabilizing the region — a goal that takes precedence over longstanding alliances forged among Saudi Arabia and neighboring Gulf states.
The third track invests new energy in strengthening relations with the world’s great powers. King Salman has visited more than 16 countries since taking office and received more than 100 heads of state in fewer than two years. The Crown Prince, for his part, has paid extended, fruitful visits to some of the most powerful countries in the world. These visits introduced the new Saudi Arabia — its policies, economic aspirations, renewal of arts and culture, and an increased openness to the world.
All these changes serve in turn to advance Saudi Arabia’s “Vision 2030,” an ambitious economic plan promising political dividends. It calls for attracting international companies to invest in a range of Saudi sectors — including a range of out-of-the-box projects.
Among developing foreign alliances, one of the most important strategic shifts lies in Saudi relations with Russia. Cooperation has normalized and improved, based on mutual respect and non-intervention in each other’s internal affairs. Common goals have been delineated, including a boost to mutual trade and investment. The improved relations have also yielded a rise in oil prices toward mutually acceptable levels. The two countries aim as well to better cooperate in peacefully resolving the region’s conflicts and repairing the collapse caused by the Arab Spring.
Regional security in the Gulf — Saudi Arabia’s most intimate sphere of engagement — is a further priority. The Kingdom defines “security” broadly, from reducing political violence to developing Gulf economies. In holding Qatar to account for harboring extremists, inciting to violence, and supporting terrorism, Saudi Arabia joins other Arab countries that share the same concerns.
Even as the Kingdom pursues its domestic, regional, and international goals firmly, it adopts a posture of flexibility and conciliation toward other moderate Arab states that may differ as to how best to secure the region. The Saudi leadership aims to build on common ground.
Saudi Counter Terrorism Policy
Over the past two decades, the Kingdom of Saudi Arabia was targeted prolifically by terrorists. In response, it developed an effective, far-reaching approach to fostering security by countering and deterring terrorism. It is a holistic approach — national, regional, and international — fusing bold action by the security sector, an aggressive financial clampdown, and intellectual and cultural interventions in Saudi society and beyond. The kingdom has also participated vigorously in a range of international initiatives under the umbrella of the United Nations, among other global efforts. These efforts may be summarized nationally, regionally, and internationally, as follows:
On the national level, the kingdom has introduced cutting-edge counterterrorism practices. They include enhanced cooperation and collaboration within the security sector and between security sector players and civil and other government instructions. They also include stringent constraints on making, importing, selling, possessing, dealing, or acquiring weapons, munitions, and chemical materials. The security sector has also dealt firmly with perpetrators of terrorist crimes: They are pursued vigorously and prosecuted according to newly streamlined legal and statutory measures. These measures support the kingdom’s international commitments and are in accord with Islamic legal principles.
With respect to the kingdom’s efforts to counter money laundering and terrorism financing, in 2002 the kingdom established a unit for financial investigations and a standing national counterterrorism committee. In addition to combating money laundering and terrorism financing, they serve to counter the use of information technology and social media as mechanisms for committing such crimes.
Meanwhile, the kingdom has committed to fighting terrorism on the level of intellectual activity. Adopting the view that political violence stems primarily from ideological inculcation, the kingdom works to fight the indoctrination by fostering a culture of dialogue and civil peace. These efforts focus on the particular challenge of reaching the nation’s young people — before they fall prey to extremist recruitment. It is an educational process, using media, new schools curricula, and religious discourse. New television programming, for example, refutes the distortions of Islam upon which terrorists rely to build their followings. Meanwhile, the Mohamed bin Nayef Center for Counseling and Care, established in 2004, has innovated a holistic approach to rehabilitating convicted terrorists intellectually and emotionally, and training them to return to a peaceful life and decent living in Saudi society.
All these efforts arose from concerted, methodical plans and strategies. They engage Saudi families, educational systems, mosques, media outlets, and a range of organized social gatherings. They also include preemptive measures to counter the exploitation of social media by terrorists to radicalize young people and coordinate their operations. Saudi efforts seek to clamp down on online criminality, as well as refute their radical arguments through a discourse of reason. Meanwhile, the King Abdulaziz Center for National Dialogue engages the grass roots of Saudi society, through a variety of initiatives aiming to spread a culture of dialogue.
On the regional level, since 2002, the kingdom has also taken the lead in bringing together other Gulf Cooperation Council member states to work together in the struggle against extremism and terrorism. The approach adopts a policy of cooperation, coordination, and pooling information among participating GCC states. This campaign has made a further contribution to foiling attacks and preempted radicalization and recruitment. The kingdom also supports pan-Arab efforts by joining in counterterrorist initiatives led by the Council of Arab Interior Ministries, all aimed at consolidating security cooperation among Arab countries. Those include the widely touted “Arab Counterterrorism Strategy” (1998) and the “Arab Counterterrorism Agreement” (1998).
On an international level, the kingdom’s unique status as the global spiritual center of the Islamic faith has enabled it to deepen cooperation among all Muslim-majority countries and communities worldwide. Through the framework of the Muslim World League, the kingdom now works to promote social cohesion in Muslim countries fractured along sectarian and, for that matter, ethnic lines. Among its global initiatives, perhaps the most prominent is the King Abdullah bin Abdulaziz International Centre for Interreligious and Intercultural Dialogue, established in 2005. Ten years later, the kingdom went on to establish the “Islamic Military Counterterrorism Coalition,” bringing together 41 Islamic countries. Meanwhile, under the auspices of the UN, the kingdom ratified and joined all of the organization’s 16 counterterrorism agreements. It also participated in counterterrorism-related working groups at the “G20 summit” and implemented the recommendations that arose from them. The kingdom has worked with the international “Financial Action Task Force on Money Laundering” and, in 2004, was deemed to have satisfied its standards. As a forerunner in calling for interreligious & intercultural dialogue, the kingdom invested $100 million in the nascent “UN Counterterrorism Center.”
In 2017, the Saudi capital of Riyadh saw the establishment of the “Global Center for Combating Extremist Ideology” (Etidal) as well as the “Center for Cultural War,” a new division of the Saudi Ministry of Defense. Those efforts have yielded a rich exchange of unclassified information among the gamut of allied states. They have contributed to the effort to dismantle terrorist cells and arresting their leaders, planners, and intellectual and spiritual guides. They have also blocked a large number of terrorist operations before they could reach the operational stage, saving thousands of innocent lives.
Youth Empowerment in Saudi Arabia
According to a study released by the Jeddah Forum for Human Resources, the population of Saudi Arabia has the third largest proportion of citizens aged 29 and under in the world: 67 percent, totaling 13 million. The state regards these young people as a national treasure. Crown Prince Mohammad bin Salman has said, moreover, that without empowering these Saudis and developing their capacities, it will be impossible to realize his own “Vision 2030.”
Accordingly, since assuming his current responsibilities, he has brought more and more young people into positions of authority, including some of the most important and sensitive responsibilities in the realm. Most have performed admirably.
Before becoming crown prince, Mohammad bin Salman established a prominent non-profit organization named “Misk,” devoted to developing youth capacities and realizing their creative potential. In his own words, “Our dear country is attentive to the shift towards a knowledge-based economy and a society of knowledge. This is reflected in the tenth development plan, which aims above all to transition the country into a knowledge-based society. The same applies to our intense concern for preparing a national youth strategy, stressing, among other goals, the importance of empowering young people and growing their leadership capabilities, knowledge, and productivity. Misk aims to integrate these efforts, alongside efforts by all institutions and players in implementing this vision.”
Since its launch, Misk has grown into one of the largest non-profit institutions in the Middle East. It implements various activities around the world. Witness the “Misk Talk” initiative, which featured a tour by a group of Saudi youth in six American states. They met Americans in their age group and shared their remarkable life stories, in the broader context of a dialogue between East and West. Paris, their last destination, was also home to a further Misk project called “Expo Culture.” It aimed to promote cultural communication with various peoples and societies — and showcase the creativity and potential of Saudi youth.
The King Salman Youth Center is another important venue for youth empowerment in Saudi society. It grew out of the King Salman Young Entrepreneur Awards. The Center’s activities include lectures, workshops, and other public gatherings. A publication section provides a platform for youths’ creative writing through a magazine about entrepreneurship. The magazine also serves to inform readers about the latest in science, technology, and
a range of industries.
The King Salman Youth Center seeks at heart to motivate Saudis aged 18 to 35 to develop what makes them unique and encourage them to take the initiative, all with an eye to building a creative generation of future leaders who will bring prosperity, growth, and cultural continuity.
While Misk and the King Salman Youth Center revolve largely around the private sector, other projects seek to encourage achievement in the realm of scholarship. Witness the King Salman Awards for Advanced Studies in the History of the Arabian Peninsula and its Civilization. Some of the awards, administered by King Saud University, go to distinguished Masters and Doctoral theses. Others, granted within the framework of the “Da’im” (supporter) program, reward the study of history more specifically, whether by Saudis in higher education or their counterparts in other Gulf Cooperation Council member states.
These and other efforts to nurture Saudi youth are a vital component of the Kingdom’s effort to strengthen and reform the state, fortify the population, and secure the country’s future.
The first fashion week in the history of the kingdom was held on 10 – 14 of April in Saudi Arabia’s capital, Riyadh as Gulf News reports. The show was attended by both Arab and international designers, including Roberto Cavalli and Jean-Paul Gaultier. Observers associate new trends in the life of the kingdom with the reforms of Crown Prince Mohammad bin Salman Al Saud.
The fashion week was planned in February, but, as the show’s organizers say, it was postponed due to the growing number of participants. The showings were held in the evening and exclusively for the female audience. In an interview for the TV program “60 Minutes” on the CBS channel Crown Prince Mohammad bin Salman Al Saud noted that women should be able to choose what to wear and traditional black clothes is not now the only option here.
“We are very grateful for the trust and support,” Jacob Abrian, Executive Director of the Arab Fashion Council, said. According to the official website of the Arab Fashion Week, the works of fashion designers from 22 Arab countries, new collections of European couturier Jean-Paul Gaultier and Roberto Cavalli, collections of Russian designer Yulia Yanina and Kazakhstan fashion brand BibiSara were presented at the Ritz-Carlton Hotel in Riyadh.
Under the fashion week the first tours of the Russian ballet were held in the kingdom. At the closing ceremony the dancers of The Konstantin Tachkin Saint Petersburg Ballet Theatre presented fragments from the ballets “Swan Lake”, “Sleeping Beauty”, “The Nutcracker”, “La Bayadere” and “Don Quixote”.
Many media experts associate this steps with the prince’s liberalization policy who believes that Saudi society needs modernization. The prince himself is not alien to the interest in European values. On the eve of the fashion week he visited Paris and before the official part of the visit, together with Emmanuel Macron, French President, they have visited the exhibition of the artist Eugene Delacroix that opened in the Louvre according to the report of the Elysee Palace.
Over the past few months, the situation with women’s rights has changed significantly in KSA. They were allowed to attend football matches — apparently, it is a tribute to the approaching World Cup, which will be opened by the Saudi and Russian national teams. There is, however, some specificity. As Associated Press reported, on 12 of January 2008 Saudi fans attended the match for the first time which was held in the stadium in Jeddah where the game between the leading local teams took place. Special “family sectors” were established for the female fans. In the near future two more stadiums will be equipped with family sectors, including the stadium in the capital according to the press. In addition, such sectors which allow married couples and women accompanied by close relatives and sometimes friends begin to open in restaurants, hospitals and banks.
On 23rd of September 2017, Saudi Arabian women were invited for the first time in the history of the country to the King Fahd International Stadium in Riyadh for a musical performance in honor of the 87th anniversary of the founding of the country. With the submission of the Crown Prince in March, after a 35-year break, cinemas began to open in the capital of Saudi Arabia.
In September 2017, Salman bin Abdulaziz, Saudi King, issued a decree authorizing women to drive cars. A special agency is set up to control the situation and to help female drivers. Restrictions on this type of women’s leisure will be completely withdrawn in June 2018. However, it’s not just about leisure: women are becoming more and more a business part of society and their salaries gradually equalize with men’s. If desired, they can get a job even as personal drivers or taxi drivers but only for female clients.
The first international marathon was held on 24th of February 2018 in Riyadh, the capital of the Kingdom, in which 28 thousand Saudis and representatives of other countries competed. The runner from Ethiopia was the winner, who was awarded a prize of one million riyals (267 thousand dollars). 79-year-old kingdom’s national was the most experienced participant in the competition. The authorities of KSA were pleased with the idea so they approved the holding of the first female indoor marathon in the country’s history. Meantime this is an experiment: the first full-fledged national female open-air marathon is planned for next year.
In 2018, the Kingdom has planned more than 5 thousand entertainment events. Residents and tourists in 56 cities across the country will be able to visit musicals, shows for the whole family, performances of stand-up comedians, concerts, circus performances. In addition, the country’s first opera house will be built in the port city of Jeddah which also serves as a gathering place for pilgrims traveling to Mecca and Medina.
All this together is a big step for a country where concerts, music in restaurants and in shops were banned for the last two decades, Arab News said.
The course for the implementation of the program “Vision 2030” announced by Crown Prince Mohammad bin Salman guarantees equal rights and freedoms for all kingdoms’ nationals, and also foresees the involvement of women in public life. 2018 should become historical for the female half of the kingdom.
Mohammad bin Salman: The Women’s rights reformer in the progressive Era
Since the appointment of 32-year-old Prince Mohammad bin Salman as heir to the throne, Saudi Arabia has introduced a series of reforms in favor of women, allowing them more freedoms and rights.
Saudi women now benefit from greater political, social and economic development and are granted greater engagement in a concerted effort to alleviate inequality.
These steps have been introduced under the Crown prince’s Vision 2030- a national plan that has been set to lead the economic and social future of the kingdom.
Under the Vision, old regulations and policies concerning women have been reviewed and restructured.
One of the most significant steps, which have been undertaken to further the rights of Saudi women, was the decision to lift the historic ban one female driving.
Saudi Arabia’s King Salman has issued a decree in September 2017 allowing women to drive for the first time, and ending a controversial issue, which has for long been an issue that hurdled how the situation of women in Saudi Arabia is projected abroad. Saudi Arabia was the only country in the world where women driving is forbidden.
Few months later, Saudi Arabia has open up stadiums to women, after announcing that women will be allowed to enter a football stadium to watch a match for the first time, such move is believed to be a gesture to easing of the systematic segregation between sexes.
But the sweeping changes to empower women are not limited to allowing them more rights, but also to creating opportunities for them that would elevate their role in the national economic and social development.
Under the series of reforms ordered by the Crown Prince, Saudi Arabia’s has reduced the authority of male guradiship over women. Saudi women are now allowed to open their own businesses without the consent of a male relative. Such move has been taken to encourage women to take entrepreneurial opportunities that would contribute in reducing the female unemployment rate.
The Crown Prince’s vision has taking the role of women in the economy very seriously. The government pledged to increase the number of women in the workforce from 22 per cent to 31 by the year 2013. As part of advancing such objective, a number of measurements have been introduced to increase the female work opportunities, including the elimination of rules that confined women strictly to jobs in the educational and medicine sectors. As of 2018, women were given the right to apply for positions in military service in several governorates including Riyadh, Mecca and Medina. As well as to apply for jobs in passport offices airport and land, that had previously been restricted to males and foreign workers. Not only has this increased the employment rate of women, it has also abolished social conventions that imposed segregation between males and females in the work place. Evidence of this too has been on display in other fields including politics.
Politically, women have been invited to participate in the decision making process as witnessed by the appointment of women to the Shoura council (an advisory body that passed a decision), granting women the right the occupy 20 per cent of political seats.
Additionally, women working to the Human Rights Council has been grew by 25 per cent of the total number of members of the Council after six females have been appointed in the Council.
Women were already allowed to participate in the elections and the election of the Council of Chambers of Commerce. A number of women won the membership of these councils.
The government plans to increase the participation of female in leadership positions from 1 per cent to five per cent. Such intention has ben already furthered by the appointment of Princess Bandar bin Sultan to head a Saudi federation for community sport. Her appointment made her become the first woman to lead a federation covering sporting activities for both men and women.