The Right Dream for Saudi Arabia

Man with a plan.

Photographer: KENZO TRIBOUILLARD/AFP/Getty Images

No one can fault Deputy Crown Prince Mohammed bin Salman for lack of ambition. The 30-year-old son of Saudi Arabia's king has laid out plans to sell shares in the world's largest state oil company and create the world's largest sovereign wealth fund.

The idea is to help the country diversify its economy, he said in an interview with Bloomberg News. The fund would make investments around the world while helping Saudi Aramco expand beyond oil and into construction, engineering and other industries. It's a bold move, and its scale alone may help Saudis understand the magnitude of the challenge they face.

At the same time, it will take more than this to produce the kind of change the country needs. Success will require moving fast on the kinds of political and cultural reforms that usually take decades.

A population accustomed to relying on immigrant labor and government assistance will have to work more and pay taxes. At the same time, the state will have to be more responsive to the citizens it's now asking to start businesses and fend for themselves. It will have to provide them with better health care and an educational system that helps them succeed in a new economy. More women will need to work (and drive to work, too). Fewer princes will be able to enjoy luxurious lifestyles at state expense. And when there is political unrest, the government will have to resist the temptation to buy off the opposition.

This is a tall order, to put it mildly. For Saudi Arabia to become the kind of regional financial services hub that Prince Mohammed envisions would be harder still. Ultraconservative religious leaders and much of his own family would fiercely oppose the kinds of changes needed to make their country attractive to employees of foreign companies.

There's no reason to doubt Prince Mohammed's determination to reshape Saudi Arabia's economy. He has already moved surprisingly quickly to cut waste and subsidies, and is pushing for large-scale privatizations. He deserves support. But he'll also have to show he's ready to do what it takes to succeed, and sooner than he thinks.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.