MBS’s Vision2030 Turns Cold with Too Few Investors

  • Mohammed bin Salman’s emphasis on economic diversification raises concern about the sustainability of his green projects, such as NEOM. 
  • Lack of transparency, coupled with MBS’ controversial public image, has hindered foreign investment.
  • Maintaining domestic and regional hegemonies will depend on the success of MBS’s objectives for Vision 2030.
Mohammed bin Salman Al Saud MBS
Mohammed bin Salman Al Saud

Why is MBS’ heat level Cold?

Answer: Saudi Arabian initiatives to diversify away from oil and push green investments have been lacklustre. 

Following the oil price crisis of 2014-2016, Mohammed bin Salman realized that the Saudi economy could no longer rely on oil as a sustainable source of development. Furthermore, to ensure the al-Saud family’s continued authority both domestically and in the Middle East, the necessity for a diversified economy became increasingly apparent. 

In order to diversify Saudi Arabia’s economy, Saudi Arabia requires large sums of Foreign Direct Investment (FDI). However, funding has proved to be challenging given MBS’s become a controversial public image on the international stage. To resolve this issue, Saudi Arabia focused on green policies and renewable energy transition to attract FDI. This was done through developing internationally approved sustainability measures that aim at combating climate change. 

An example of such a project is Vision 2030, which encompasses several projects such as NEOM. The aim of NEOM is to diversify the economy and attract FDI.

Various subprojects of Vision 2030 have been launched. Examples of those are the Middle East and Saudi Green Initiatives, the NEOM Project, and the blue hydrogen plant construction. However, it is crucial to understand that MBS’s primary motivation is to create globally approved climate policies, not the policies that actually change people’s lives for the better.  

What is changing MBS’ heat level?

Answer: Vision 2030 lacks transparency, green progress tracking, and consistent international investment, which is crucial to maintaining the al-Saud rule.

Vision 2030 was not as successful as expected in terms of implementation and attracting international investors. Moreover, it is extremely difficult to assess real progress in the various subprojects of Vision 2030 currently being rolled out. NEOM, for instance, relies solely on its social media channels and does not provide any concrete details on the progress. Other initiatives forming a part of Vision 2030, like the Saudi Green Initiative or the Middle East Green Initiative, faced skepticism.

As the projects came into existence, their actual sustainability and net-zero emissions were put into question by international organizations. Indeed, the construction of both the NEOM Project and the Line City will generate around 1.8 gigatons of CO2. This is an enormous number for the country that aims to become carbon-neutral by 2060.  The second concern is that the building of the futuristic city in fact disrupts the lives of local flora and fauna. The threats to nature include new buildings being the obstacles to bird migration and artificial ecosystems for plants. 

Saudi Arabia also lacks financial transparency. Information like executive budget proposals, annual budgets by ministries, natural resources extraction levels, and audit reports are not available to the public. At the same time, behind their targets on FDI, Saudi Arabia is losing its credibility by changing its goals on investment and completion of projects. The crucial capital needed is not flowing as fast as MBS expected it to. This puts the completion and the scale of projects at risk. 

Initial projections for annual FDI were at  US$19 billion by 2020 from US$8 billion in 2015. However, the controversial image of MBS combined with the pandemic slowed down the progress. The murder of Jamal Khashoggi in 2018 caused serious controversy around the role of MBS and the worldwide pandemic. It reduced investors’ confidence levels, and inward FDI levels in Saudi Arabia were reduced. Moreover, the difficulty in assessing the impact of megaprojects like the Line, alongside the heavy investment needed, creates a credibility issue for future potential investors.

What is driving MBS?

Answer: The desire for Al Saud House to maintain domestic and regional hegemony, which requires diversification away from oil and heavy international investment.

All policies and projects being currently rolled out in Saudi Arabia have one common and important goal – reinforcing the position of MBS as a visionary leader at home and in the region. As the price of oil fluctuates and consumption is predicted to peak by the end of the decade, Saudi Arabia faces the challenge of diversifying its economy, boosting the private sector, and increasing employment. 

Saudi Arabia demonstrated a budget deficit in the first quarter of the year and is in acute need of capital and investment. Since the domestic and regional influence of MBS is based on oil revenues, diversification becomes a major necessity and requires the attraction of foreign capital to fund these fundamental changes.

Because of Saudi Arabia’s social contract, no taxation – no representation, the role of oil money cannot be understated when exploring the establishment of the domestic hegemony of the Al Saud family. Nonetheless, a high percentage of the young population combined with the pressing risk of diversifying the economy and creating jobs for this young population puts the country’s stability at risk, as well as pressure on its leader.   

MBS and Saudi Arabia are also at risk of losing their regional hegemony. Iran, Qatar, UAE, and Türkiye are competing actors in the Middle East and aim to challenge Saudi Arabia. The regional politics are changing as Iran incites rivalry with Saudi Arabia through proxy wars in the region, geostrategic cooperation with Russia in Syria, and developing economic ties with China. This demonstrates that the struggle for power in the region is ongoing. By not diversifying from oil in the following crucial years, MBS is risking his position of power both at home and abroad.

What does this mean for you?

Answer: The actual development of the green policies and slow, but steady transition to renewable energy is not possible without Saudi’s realization that oil production has to be significantly decreased. 

In October 2021, the world’s largest oil producer, Saudi Aramco, announced its plans to raise crude production from 12 million barrels a day to 13 million barrels by 2027. Only later, in April 2023, did Saudi Arabia introduce its first oil production cuts. Although MBS highlighted that there will not be any additional capacity to increase oil production beyond 13 million barrels per day, such an announcement goes against all the attempts to transit to cleaner sources of energy. 

What is more, such plans were claimed the same year the Saudi Green Initiative was first introduced. It makes it even harder to believe MBS and his government care about future environmental threats those decisions can lead to. 

In examining MBS’s drive to implement various green initiatives and Vision 2030, it’s essential to recognize that his primary objective is to maintain his grip on power and assert regional dominance. It is highly likely that Saudi Arabia, given its authoritarian nature, would not have pursued significant green initiatives if it hadn’t been for the sharp decline in oil prices during 2014-2016.


The shared Account of RAIA members and Alumni