Combining modernity and tradition: Saudi Arabia is trying to do this in numerous areas. Pictured: The Maraya concert hall, which has already been built, in the Al-Ula oasis, a new tourist hotspot in the country.
Jean Claude RaemyEditor Economics
“Saudi Arabia is the new big player in the Gulf.” That says Suhail El Obeid (45), Senior Consultant Middle East at the foreign trade promoter Switzerland Global Enterprise (SGE) in Zurich. The Emirates are still Switzerland’s most important trading partner in the Middle East. But that will hardly last.
Saudi Arabia is in the midst of a major upheaval. For 60 years the country was focused on oil production. But these reserves are finite, and the price of oil is volatile. In addition, non-fossil fuels are becoming more and more popular in the face of climate change.
In 2016, Saudi Arabia therefore formulated the “Vision 2030”. With it, the country wants to reduce its dependence on oil. Even more: Saudi Arabia is to be the leading country in the Islamic world by 2030, a hub in the economic exchange between the three continents of Europe, Asia and Africa. The 36 million Saudis should benefit from a modern and diversified economy in the future.
How does that work?
Saudi Arabia is fueling the transformation process with huge amounts of money. The kingdom sits on a foreign currency treasure of 464 billion dollars.
The money is invested both abroad and domestically. A well-known project is Neom, a huge metropolitan region with an attached technology park in the north-west of the country, which is being pounded out of the desert – initiated by the Saudi Crown Prince Mohammed bin Salman (37).
“Neom is being pushed insanely,” says El Obeid. Associated projects such as The Line – a 170 km long but only 200 m wide city between 500 m high glass walls – are sometimes dismissed as megalomaniac fantasies. But El Obeid assures: “The foundations for the first kilometers have already been laid.”
integration with Switzerland
What does this mean for Switzerland? Economic exchange with Switzerland is intensifying. In 2021, the trade volume between the two countries was 3.1 billion francs, in 2020 it was 2.2 billion. El Obeid explains that further growth can be expected.
Switzerland primarily exports “classic goods” such as pharmaceutical products, watches and machines to Saudi Arabia. However, it is not oil and gas that is being sent in the opposite direction, but mining products (iron ore, copper, aluminum and more) and chemical products are already being sent. According to El Obeid, that will not change for the time being.
Everyone wants to go to Saudi Arabia
The volume of business, on the other hand, is: “A few years ago, Swiss entrepreneurs wanted to do business primarily in Dubai, now in Saudi Arabia.” According to El Obeid, around 70 percent of the mediation inquiries addressed to the SGE in the Middle East are already aimed at Saudi Arabia.
The country is promoting this development with the “Regional Headquarters Program”: anyone who wants lucrative public contracts must relocate their Middle East headquarters to Saudi Arabia. The influx is great. According to El Obeid, more and more companies are moving their regional headquarters from Dubai to Riyadh.
Lots of potential for Swiss
The money also flows the other way around: Recently, joining Credit Suisse made the headlines. The Saudi National Bank, which is 80 percent owned by the state, participated. Sabic (Saudi Basic Industries) took a stake in the Basel chemical group Clariant. This belongs to Saudi Aramco, the world’s largest oil company, also a state-owned company.
The Saudi sovereign wealth fund PIF (Public Investment Fund) is also active around the world with assets of currently 320 billion dollars. He recently made a name for himself with sports investments in particular. Soccer player Cristiano Ronaldo moved to the Saudi league, FC Newcastle and the wrestling league WWE are now part of the PIF portfolio. The goal: one day to host the World Cup or the Olympic Games.
El Obeid interprets the sports commitments as “transporters of Saudi Arabia’s vision of the future”. Sports marketing expert Christian Lang suspects that the main aim behind this is to distract from abuses in one’s own country and to use the radiance of sport for one’s own marketing.
The infrastructure for this is already being created. The enormous willingness to invest opens up many new business opportunities – also for Swiss companies. Various Swiss companies are said to be already actively involved in the many infrastructure projects in Saudi Arabia. El Obeid is not allowed to reveal what it is.
Not always unproblematic
Perhaps because Saudi Arabia is a delicate trading partner. The desert state is ruled by an authoritarian regime with a rather poor record when it comes to human rights. However, that is of little interest. “Swiss investors withdrew temporarily after the affair surrounding the murder of journalist Jamal Khashoggi in 2018,” said El Obeid. “That was quickly forgotten. Now everyone wants to do business again.” Political matters are not usually discussed in the business world.
Saudi Arabia is actively shaping its post-oil future. From the perspective of the Saudis, critical voices would only be a nuisance.