Delivery matters most in Saudi Arabia

15 February 2016

The kingdom is working on a plan that could double the economy in 15 years. It has the vision, but does it have the touch? 

On 1 December last year, the US-based McKinsey Global Institute published a report entitled Saudi Arabia Beyond Oil: The Investment and Productivity Transformation. It said the kingdom’s economy could double and create 6 million jobs by 2030. Higher growth, government efficiency and non-oil income can eliminate budget deficits.

McKinsey says the report is the work of the firm’s independent think-tank, not Saudi government policy. Few are convinced.

McKinsey advises Council for Economic & Development Affairs (CEDA) chairman Deputy Crown Prince Mohammed bin Salman al-Saud, son of King Salman bin Abdulaziz al-Saud. The council is working on the kingdom’s national transformation plan (NTP), and Prince Mohammed presented its key elements at a workshop in Riyadh in December.

It calls for action in 18 sectors to shift the economy away from oil and gas, which accounted for 40 per cent of GDP in 2014.

The NTP is inspired by the understanding Saudi Arabia cannot rely on oil and gas any longer. It is also Prince Mohammed’s blueprint for Saudi Arabia’s future.

Prince Mohammed is creating shock and awe in Saudi Arabia’s civil service. Officials are being told to perform or go. Spending is being scrutinised and projects scrapped.

The prince has been talking about his vision with unprecedented openness. The Mckinsey report is a sign of the times. Prince Mohammed’s interview with The Economist, published in January, which raised the possibility of a Saudi Aramco IPO, is another.

The prince’s approach is familiar in corporate life, but a novelty for Middle East governments. A new leader commissions an adviser to develop a long-term vision. This has now been done. Next comes selling the vision, and then implementation, which is where the problems start.

More than 1 million Saudi Arabians work for the government in 52 agencies, many with offices in every major Saudi town. Getting them enthusiastic about a programme that involves performance measurement and the end of cushy jobs is as testing in the kingdom as it is anywhere. There’s scepticism about the state’s capacity to rise to the challenge.

The strategy is good, but difficult. Long-term visions founder on the failure to transform great ideas into reality.

The NTP calls for a revolution in the way the kingdom is governed. A tribal society where faith and family come first is to be transformed into a market economy where merit matters most.

Only a management consultant could think it possible.

And only the son of a king could attempt it.

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