◼ POLITICS Bloomberg Businessweek May 4, 202033ABDEL
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◼Domestic
◼Foreign● Economic losses—partly of his own making—
will force Saudi’s MBS to trim his sailsThe Crown Prince’s
Plans Go Awry
The courtyard around the Grand Mosque in Mecca
should be teeming with hundreds of thousands of
pilgrims marking the start of Ramadan. Instead,
it’s deserted: The coronavirus pandemic has hit
the city where the Prophet Muhammad was born.
Saudi Arabia’s response to Covid-19 was to lock
down quickly, winning praise from many Saudis.
The economic impact of the pandemic, though,
couldn’t have come at a more pivotal time.
This was supposed to be Crown Prince
Mohammed bin Salman’s year. For 2020 the plan
was for Saudi Arabia to exhibit some of the first
fruits of its great modernization project—from a
record number of Muslim faithful visiting holy
sites to new industries that showed the society had
become more open and could one day thrive with-
out oil. Then, in November, the 34-year-old prince—
the kingdom’s de facto leader—would claim the
world stage by hosting his fellow Group of 20 chiefs.
A combination of his own actions and calami-
tous world events is now throwing up some tough
questions for the prince over whether his economic
dream remains attainable in its current form.
For all of Prince Mohammed’s efforts to crush
dissenters at home and silence his critics abroad,
his role in escalating an oil war with Russia showed
a rashness that’s marked some of his decisions—
including a failed boycott of neighboring Qatar and
a disastrous military campaign in Yemen. There
was also the gruesome murder in 2018 of colum-
nist Jamal Khashoggi by Saudi agents on his watch.
No leader, though, could have predicted the
coronavirus crisis. The hush of Mecca and Medina
is now the most striking illustration of the chal-
lenges facing a prince who staked his leadership
on bringing economic prosperity to a nation where
two-thirds of the population is under the age of 35.
According to a blueprint Prince Mohammed
unveiled four years ago, called Vision 2030, one
of the aims was to increase income from religious
visits to Islam’s holiest cities. Saudi Arabia planned
to enable 15 million Muslims, mainly from abroad,
to perform the minor pilgrimage called umrah to
Mecca this year, almost doubling 2019’s arrivals.
This was to be achieved by increasing capacity
and improving the quality of visitor services. But
coronavirus restrictions prevent travel, and Mecca
remains in total lockdown.
In truth, the grand transformation plan wasalready faltering before the pandemic and oil prices
crashed. Bringing in more pilgrims and opening to
tourism weren’t the only ways Saudi Arabia intended
to boost the private sector and diversify the econ-
omy. Its most eye-catching megaprojects include the
futuristic city of Neom on the Red Sea and a mas-
sive entertainment, arts, and nature site on the out-
skirts of the capital, Riyadh. All are dependent on a
healthy budget, foreign investment, and attracting
skilled labor from abroad.
“Although it was difficult before, now it’s close to
impossible to deliver on all elements of the vision,”
says Ayham Kamel, head of Middle East and North
Africa at the Eurasia Group consulting firm. It
leaves Prince Mohammed having to make “diffi-
cult choices in terms of what he wants for diver-
sification, the megaprojects, investments in assets
abroad and at home,” he says.
Kamel says the short-term impact will be felt
mostly economically, but the political cost will accu-
mulate over the long term. The kingdom has already
moderated its positions on Iran and Qatar and
announced a cease-fire in Yemen in April, he says.
Saudi Arabia’s economy still hinges on petrodol-
lars, despite the crown prince’s insistence in 2016
that by this year the kingdom would be able to “live
without oil.” With such a young population, the gov-
ernment can’t continue being the main employer
and needs to create jobs in the private sector while
bringing more women into the workforce.
Significant progress has been made to develop▼ A worshipper prays in
Mecca’s Grand Mosque
on March 7