Saudi Arabia is scaling back its ambitious Vision 2030 development plans amid financial pressures and shifting priorities. The Crown Prince Mohammed bin Salman’s (MBS) decade-old initiative, aimed at transforming the kingdom’s economy away from oil dependency through massive megaprojects, is now facing significant cutbacks, delays, and cancellations.
Vision 2030 was backed by Saudi Arabia’s nearly $1 trillion Public Investment Fund (PIF) and included futuristic projects such as The Line, a linear city stretching over 100 miles, and Trojena, a year-round mountain resort with ski slopes. However, many of these projects are being downsized or shelved due to lower oil revenues before the recent Middle East conflict and a lack of expected foreign investment.
Why this matters
The retrenchment signals a major shift in Saudi Arabia’s economic strategy and raises questions about the feasibility of its grand plans to diversify its economy and reduce reliance on oil. The cutbacks also affect the kingdom’s efforts to improve its global image and attract international tourists and investors.
Key developments
- The Line: Originally envisioned as a futuristic city taller than The Shard and stretching 161 km, it is now being scaled down to a more conventional development.
- Trojena resort: The ambitious ski village with artificial lakes and luxury hotels has been curtailed, and the planned Asian Winter Games in 2029 were moved to Kazakhstan.
- The Cube: A massive $50 billion project of flats and offices has been completely abandoned.
- LIV Golf tour: The $5 billion sports investment has been reassessed as a financial failure with limited reputational gains.
Background
Vision 2030 was designed to transform Saudi Arabia economically, politically, and socially. It aimed to diversify the economy, reduce dependence on oil, and modernize society. The plan included large-scale infrastructure projects, cultural initiatives, and sports investments to boost tourism and foreign investment.
However, the kingdom’s history of ambitious megaprojects includes earlier efforts like the Economic Cities program under King Abdullah in the 2000s, which also failed to meet expectations despite billions in spending. Critics argue that a culture of unrealistic planning and a “yes man” mentality among officials and consultants has contributed to repeated disappointments.
Market impact
The financial strain on Saudi Arabia was exacerbated by a drop in oil prices before the recent conflict in the Middle East, which has since caused prices to rise but also increased uncertainty. The lack of sustained foreign investment and concerns over political stability and human rights have further dampened investor confidence.
Efforts to crack down on corruption and dissent, including the 2017 detention of elite officials and the 2018 killing of journalist Jamal Khashoggi, have also affected the kingdom’s international reputation and investor perceptions.
What to watch
Saudi Arabia is now focusing on smaller, more achievable projects such as the Red Sea island resort of Sindalah, the revival of the historic Diriyah district in Riyadh, and the Six Flags Qiddiya theme park. The development of the ancient site of AlUla into a global tourism hub is seen as a successful model for future projects.
The PIF governor has emphasized a new five-year plan prioritizing efficient spending and sustainable business performance to maintain financial resources. Analysts view this as a shift from grand announcements to practical execution, which may help preserve the core goals of Vision 2030 despite the setbacks.
Recommended reading
For more context, see related Peack News coverage and explainers linked below.
