We must wake up from our oil dream and face reality
By announcing that it would be leading a coalition of international companies to establish King Salman International Complex for Maritime Industries and Services, Saudi Aramco has moved to another new mission, in addition to its oil activities. It says the first phase of the complex will be completed by the end of next year, and its location will be the port town of Ras Al-Khair on the eastern coast.
This project fulfils the big promises of Saudi Vision 2030 of enhancing resources and revenues in new areas linked to the economy of the Kingdom. But it is also important to know the correlation between these giant projects and their tributaries. The project promises 80,000 direct and indirect job opportunities, the majority of which are supposed to go to the local workforce. And since the project will be completed in stages over a five-year period, we assume that some local educational establishments, including those specializing in engineering and maritime sciences, could be assigned the task of focusing their studies on serving this project by the time it is completed five years from now, to avoid the claim that no local educated and trained competencies are available.
Eighty thousand jobs is a good figure, but it would not satisfy the needs of job seekers, of course, considering that there would be about a million graduates during these five years. What is needed is a chain of integrated projects and activities in one market. As with King Salman International Complex, we expect the government to lead the line and build large institutions with local contents, which are capable of success without relying on government support, do not constitute a burden on the local economy, and are characterized by competence, quality, and the ability to compete in international markets, as outlined in the plans of Vision 2030, which has promised to build a non-oil dependent economy.
I do not want here to fall in the traps of skeptics with such a utopian vision. The complex, which is one of the projects of the 2030 Vision, does not deny its relationship to oil, for most of the international maritime market is dedicated to the petroleum transport service, and part of the activities of the promised complex will be building and maintaining giant oil tankers. The objective will not be dropping oil from the economic equation, but reducing the reliance on crude oil revenues. This brings us back to talking about multiple petroleum services and industries, such as manufacturing industries, which I discussed with a number of people interested in new development ideas. The manufacturing industry is an old-new option that the market could greatly expand, based on the “comparative advantage” theory.
A new maritime industries complex on the Saudi east coast is a step in the right direction, because a single commodity can no longer be relied on for national revenue.
Oil is still a significant economic advantage in any economic program for a country such as Saudi Arabia. But it is no longer sufficient as a semi-single commodity that can be relied upon for national revenue. Oil is like a dream, and we have to wake up and face reality. And the reality is that we may not have sufficient oil revenue.
• Abdulrahman Al-Rashed is a veteran columnist. He is the former general manager of Al Arabiya News Channel, and former editor in chief of Asharq Al-Awsat, where this article is also published.
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