Saudi Arabia Whitepaper
Whitepaper

How new reforms will affect the KSA media landscape

03rd May 2018

As economy and society shift, how do media and marcomms respond in Saudi Arabia?

Read more about the 2018 reforms implemented by the Prince Crown of the Kingdom of Saudi Arabia and how this might impact the creative and media industries moving forward. From public to private, women’s rights and corruption, all aspects of the market are going to be affected by these economic and societal shifts.

On 21st June 2017, Mohammad bin Salman (MbS), was appointed Crown Prince and heir to the Saudi throne. Also holding the titles of Deputy Prime Minister, President of the Council for Economic and Development Affairs and Minister of Defense, MbS is credited with holding executive power in Saudi Arabia, despite not being King.

In an effort to push forward these reforms, Saudi Vision 2030 was announced on 25th April 2016. Created in collaboration with McKinsey & Company consultants, the initiative seeks to increase the role of the private sector, reduce bureaucracy and return Saudi Arabia to moderate Islam. Saudi Vision 2030 represents the long term goals of MbS; however, more immediate goals have been given a deadline of 2020. Summarised in the National Transformation Plan, or NTP, these targets focus on creating greater transparency in government and increasing the role of women in the workplace.

In order to effectively grasp the future impact of MbS’s new reforms, we must first contextualise Saudi society over the past 30 years. Since 1979, Saudi Arabia has been under the rule of ultraconservative religious doctrines.

KSA relies heavily on oil to fuel its economy. Forbes’ profile on the kingdom’s economy provides specific stats that demonstrate this dependency – 87% of budget revenues, 42% of GDP and 90% of all export earnings are attributed to petroleum. Although this money has helped to transform the country and empower its elite, it isn’t sustainable in the long term. Current trends suggest that these revenues will continue to diminish, meaning that a new source of economic dependency will need to be found. The Crown Prince has expressed a desire to make the economy more dependent on the private sector, which will eventually become its main source of income.

Furthermore, the public sector currently employs a disproportionate amount of the population – around 70% of all Saudi citizens – and controls many of the key industries in the country. According to Reuters, the government aims to raise $200 billion through privatisation initiatives by 2030, and by 2020 aims to have balanced its deficit through the privatisation of 100 potential projects across various industries.

Examples include the national football league, General Mills flour silos, and state-owned petroleum company Aramco, which will all be partially privatised to raise funds for the various structural projects. Notably, MbS will be selling a 5% stake in Aramco; valued at two trillion dollars, even a 1% sale would qualify its partial privatisation as one of the largest IPO’s on the planet.

All this has been done in an effort to raise awareness of Saudi Arabia’s nation branding. According to regional news source Zawya, nation branding is meant to “build, manage and improve a country’s image”, and “is designed to make a nation politically, economically and culturally more competitive in the world”. The Ministry for Culture and Information aims to improve public perceptions by 58% and increase positive media concerning KSA.

Saudi Arabia is the largest advertising market in the region, accounting for 40% of all advertising expenditure in the Gulf alone. The Saudis, with their relatively high per-capita income and market-oriented economy, have become the prime target of producers of consumer goods and thus, the best international advertising firms. As we see these new initiatives come to fruition, the opportunities for international brands could be exponential.

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