52 Middle East & Africa TheEconomistNovember13th 2021
This is a problem across the government.
Officials set ambitious targets, miss them,
then simply aim higher. “The crown prince
doesn’t have enough feedback,” says a con
sultant to multinational firms. “There are
too many yesmen.”
In private, wouldbe investors fret
about the business climate in a country
dominated by one man. They were un
nerved in 2017 when Prince Muhammad
detained dozens of businessmen and roy
als for alleged corruption (many traded as
sets for freedom). Tax was a big concern at
this year’s Future Investment Initiative, a
glitzy annual conference in Riyadh. The
government has served several firms, in
cluding Uber (and Careem, its subsidiary
in the Middle East), with hefty bills for un
paid taxes. Some executives wonder if this
portends a privatesector shakedown.
Multinationals have already been told
to move their regional headquarters to the
kingdom by 2024 or risk losing juicy state
contracts. Last month the Saudi govern
ment said that 44 such firms, including
Siemens and Unilever, would open offices
in Riyadh. The pressure has prompted
grumbling from executives based in places
like Dubai, which are less conservative and
offer better amenities.
To Saudi Arabia’s credit, it continues to
ease oncedraconian social restrictions.
The weekend before Halloween, young
Saudis crowded a partysupply store, its
shelves stocked with monster masks, devil
tridents and sexynurse outfits. Not long
ago such merchandise would have
prompted a visit from the religious police.
“They have no control over us now,” beams
the store’s owner (whose only concern was
that his “very, very conservative” relatives
might discover what he does for a living).
Partitions that separated single men
from families have come down in smart
restaurants. Young Saudis crowd cinemas,
banned for decades, to watch films like
“Dune”, about a prince tapped to rule a re
sourcerich desert. On October 20th hun
dreds of thousands of people in Riyadh at
tended a concert by Pitbull, an American
singer who is not for the prudish.
The government hopes fun will be lu
crative. With few diversions at home, Sau
di holidaymakers do most of their spend
ing abroad. The pandemic offered hints of
how much business escapes to London and
Dubai. In the second quarter of this year,
Saudi hotels logged 2.2bn rials ($590m) in
pointofsale transactions, a 7% increase
over the same period in 2019—even though
the kingdom was largely shut to visitors.
“It was pure Saudi spend,” says Princess
Haifa Al Saud, who oversees the national
tourism strategy. Yet there will be less
money for them to spend as Saudis take
lowerpaid jobs and the government cuts
oncegenerous benefits. Petrol prices have
more than doubled since 2015. The govern
ment introduced a 5% valueadded tax in
2018 and raised it to 15% last year.
The tourism industry needs foreign vis
itors. Apart from Abha, they may come to
enjoy long stretches of unspoilt Red Sea
coast and historic sites like the Nabataean
ruins at Al Ula. No one can accuse tourism
bosses of lacking creativity. In October the
pifannounced “The Rig”, a plan to repur
pose an offshore oil platform into a resort
and theme park.
But officials seem blithe about how all
ofthiswillcompetewithotherdestina
tions.ThefirsthotelstoopenontheRed
Seawillbeluxurybrands,pricingoutmany
prospectivevisitors.Officialsarecoyabout
whether they will legalise alcohol.“We
knowwehavetobecompetitiveinevery
aspect,”saysone.Eveniftheydo,some
touristsmaybeputoffbya sunandsand
holidayina countrywithsucha conserva
tiveimage.Inthe“halaltourism”market,
meanwhile,SaudiArabiafacesstiffcompe
tition from cheaper, more established
placeslikeTurkeyandMalaysia.
The samegoes forthebroaderecon
omy. Lowersubsidies, higher taxes and
pricierlabourhaveerodedsomeofSaudi
Arabia’s traditional selling points for
firms.Itisunclearwhatwillreplacethem.
Until the government banned the prac
tice, residents of Abha would chop down
juniper trees for firewood, to stave off the
winter chill. As part of the regional tourism
project, developers plan to plant 1m trees
to reforest the mountains. It will be a long
time before visitors can appreciate them:
they grow just 5cm a year in the region’s dry
climate, says Turki alBishri, a local guide.
For all the talk of rapid change,theslow
growing juniper may offer a betterglimpse
of Saudi Arabia’s economic future.n
Jobs for some
Saudi citizens, %
Source:GeneralAuthority for Statistics
80
60
40
20
0
Labour-force
participation rate
Male
Male
Female
Female
To t a l
To t a l
40
30
20
10
0
2017 1 21 2017 1 21
Unemployment
rate
I
t isbadenoughthatthepandemiccut
the number of foreign tourists by 80%;
to make matters even worse, Morocco’s
ban on extramarital sex is stifling the
domestic market in hotel beds. Un
married couples caught in the same
room are liable to jail terms of up to a
year under Article 490 of the penal code.
Each week the police check hotel records
to uphold the law. Receptioniststurned
private detectives require verification of
marriage certificates before handing over
the keys. “I get more calls from unmar
ried couples wanting to stay than anyone
else,” says Meryem Zniber, who runs a
resort in the Rif mountains. “I could fill
my hotel 100% if only they’d lift the law.”
Hopes of change rose after the Islam
ist party heading the government
crashed in elections in September, losing
90% of its seats. For a decade its leaders
had squelched any policy deemed haram,
or contrary to Islamic law. Aziz Akhan
nouch, the new prime minister, sounds
more liberal. His government recently
said it would review the entire penal
code. But he has left out of his coalition
the only party that publicly calls for
Article 490 to be repealed.
Theinteriorministryisa bigobstacle.
“They fear turning hotels into brothels,”
says a former minister. Others say the
main concern is pecuniary: officials do
not want to lose the bribes they extort
from hotels and unmarried couples who
canoodle in them.
Travel websites suggest workarounds.
One proposes donning a wedding ring.
“The offer of an additional payment may
carry some weight,” it adds. Another
suggests “the tworoom method: rent
single rooms, then scurry across the
corridor after dark”. But others have tired
of the expense and the hypocrisy. Hash
tag campaigns—“Love is not a Crime”
and “Stop490”—proliferate online.
Conservatives urge young Moroccans
to respect tradition. Youngsters retort
that the precursor to Article 490 was
introduced by France in 1953, near the
end of the colonial era. And they point to
other Muslim countries that are shaking
off old mores. The United Arab Emirates
decriminalised extramarital sex a year
ago. Saudis say their hotels have stopped
asking couples to show marriage certif
icates. Morocco’s latest hashtag cam
paign implores “Vote4Love”.
PruderyinMorocco
Get two rooms
R ABAT
Hoteliers are backing Moroccans who want to legalise sex before marriage