The Economist November 13th 2021 51
Middle East & AfricaSaudiArabiaNo tourist Mecca
W
ere it notfor the ubiquitous photos
of the royal family, visitors to Abha
might forget they were in Saudi Arabia.
Gnarled juniper trees dot green moun
tains; mist clings to valleys where farmers
grow crops and raise honeybees on ter
raced fields. Troops of baboons line the
roads, foraging for food and occasionally
stealing bags from unsuspecting visitors.
Saudis have long flocked to this city,
870km (541 miles) southwest of Riyadh,
the capital, to escape the summer heat.
Foreigners will soon discover it, too. The
Public Investment Fund (pif), the main
Saudi sovereignwealth fund, has pledged
11bn rials ($2.9bn) to build 2,700 hotel
rooms and dozens of tourist attractions in
the region (pictured). By 2030 developers
hope to draw 2m visitors annually.
Tourism is a key element of Vision
2030, an economicreform plan meant to
wean the kingdom off oil that was unveiled
five years ago by Muhammad bin Salman,
the crown prince. The government expects
tourism to be the largest source of new jobs
in the private sector, accounting for 10% of
both gdpand employment within a de
cade. “The industry is at the top of our 2030
agenda,” says Ahmed alKhateeb, the tou
rism minister, who hopes to see 100m local
and foreign tourists in ten years’ time.
Saudi Arabia has lots of untapped po
tential. It did not even offer tourist visas
until 2019. But officials struggle to explain
why a hopedfor 50m foreign visitors will
choose the kingdom over other destina
tions each year. That points to a bigger
question looming over the economicre
form effort. To achieve its goals, Saudi Ara
bia must attract foreign firms and inves
tors. Yet officials struggle to make a com
pelling case for why they, too, should
choose the kingdom.
Prince Muhammad will be judged large
ly on whether he can create decent jobs forSaudi Arabia’s 21m citizens, twothirds of
whom are under 35. The pandemic pushed
the jobless rate up to 15.4% in the second
quarter of 2020. Since then it has fallen
(see chart on next page), dropping to 11.3%
in the second quarter of 2021, the lowest
level in a decade. That is in part because lo
cals are taking lowskilled jobs that used to
be the preserve of migrants. Saudis now
work tills and brew coffee, sights unimag
inable a decade ago. Women, too, are piling
into jobs: they are now 28% of working
Saudis, up from 16% five years ago.
Falling unemployment, however,
comes partly from a lower participation
rate, which dropped by 1.8 percentage
points during the first half of 2021. At the
high end of the labour market, there are
not enough jobs for educated Saudis. Half
of unemployed citizens hold at least a
bachelor’s degree. At the other end, grunt
work is mostly done by foreigners, who are
cheaper. Citizens are still just 24% of the
workforce in sales and 20% in hospitality.
Over 85% of the jobs in construction, the
industry that employs the most people, are
done by foreigners.
As the economy grows, the labour mar
ket will grow with it. But the foreign direct
investment (fdi) needed for growth re
mains sluggish. By 2020 the kingdom had
hoped to attract $10bn in annual inflows. It
fell far short, bringing in $5.5bn last year.
No matter: last month Prince Muhammad
announced a new investment strategy that
promised $100bn in annual fdiby 2030
(more than the total for the past decade).A BHA
The reinvention of the Saudi economy is going slower than planned→Alsointhissection
52 PremaritalsexinMorocco
53 Iran’sweaponofchoice
53 ReintegratingrebelsinCongo
54 Liberia’s quest for justice