The September attacks on two of its oil facilities brought an old problem into sharp relief: the Saudi Arabian economy remains almost wholly reliant on oil. The reliance is reflected in $2 billion in lost output since then and the revised GDP growth projections for the year. The petroleum sector still accounts for a staggering 87% of government budget revenues. And worst of all for Saudi economic planners, there’s reason to believe that Riyadh’s vulnerability could be preyed on again, not just in the possibility of similar attacks, but also in short-term price fluctuations and the longer-term trend of diminishing demand owing to the climate crisis.
Saddled with years of stagnant growth and an archaic economic model, the Saudi government under Crown Prince Mohammad Bin-Salman (“MBS”) is planning to launch a series of initiatives to diversify the economy. Will they succeed in turning around the Kingdom’s recent fortunes?