Can reforms, diversification change a conservative state? – Firstpost

Saudi Arabia celebrates its Founding Day on February 22nd every year. It commemorates Imam Muhammad bin Saud’s foundation of the first Saudi state in 1727, with Al-Dir’iyah as its capital. The Founding Day inculcates a deep historical sense in the Saudi nationals. A sense of history engenders a spirit of unity, integrity, and national identity. However, the Saudi National Day is different from the Saudi Founding Day.

The former is celebrated every year on September 23rd to commemorate the unification of the Kingdom of Saudi Arabia in 1932. The latter recognises the first state formation and the development of a uniform political thought or consciousness around a piece of geography and people. It also traces its historical roots and the genesis of a political journey.

Saudi Arabia’s Rise: Oil, Leadership, and Reforms

Since 1932, the Kingdom of Saudi Arabia has undertaken a very different journey. The discovery of oil in 1938 upgraded its importance and witnessed the beginning of oil production under the US-controlled Aramco (Arabian American Oil Company). It became a founding member of OPEC (Organisation of Petroleum Exporting Countries) in 1960. The Saudi share in Aramco became 25 per cent in 1972. It also indicated the reduction in the US control over Saudi oil. Aramco became fully a Saudi company by 1980. Saudi Arabia’s leadership role also shaped the GCC (Gulf Cooperation Council) in 1981.

The Yom Kippur War in 1973 showcased Saudi Arabia’s ability to impose an oil embargo against the United States due to its support for Israel. In this context, religion played a significant role in shaping larger geopolitical dynamics, with Saudi Arabia taking a leading position. King Fahd declared himself the custodian of the two Holy Mosques, Mecca and Medina, in 1986. The custodianship also indicated the Saudi religious importance and its control over the Islamic world. Increasing authoritarianism and religious orthodoxy engendered apprehensions of unrest. Reforms were undertaken to ease authoritarianism and religious policing.

A Consultative Council (Majlis al-Shura) was formed in 1993 for a controlled decentralisation of governance. The composition of the council involved a speaker and 60 members. The selection of the council members was dependent on the king. The initial numbers were later increased to 150, including 30 nominated women members in the council. In the wake of the Arab Spring in 2011, Saudi Arabia crystallised its focus on welfare spending, gender equality, voting rights for women, participation in municipal elections, allowing women participation in the Olympics, restricting religious policing, etc.

These reforms were genuinely amplified under Crown Prince Mohammed bin Salman. His official entry into the Saudi scheme of things in 2017 led to significant transformation. Bold reforms were undertaken to alter the existing global perception of Saudi Arabia’s theologically determined ultra-conservatism. He lifted the ban on women driving and cinema and emerged as an impactful modern leader with a definitive focus on reforms, technological advancement, and diversification of the Saudi economy through exploring new avenues of investment, cooperation, and multilateralism.

The Vision 2030 and Neom City project catapulted Mohammed bin Salman to the height of an impactful leader, taking his country to the fame of an emerging power. However, he made no qualms in calling names, especially Iran and Qatar, for aiding and abetting terrorism. The clarity of vision, desertion of political correctness, prioritising the interests of his country, and astute selection of its allies crystallise his conviction, commitment, and vision.

Saudi Arabia’s Strategic Positioning

The geostrategic location of the Kingdom ensures its emergence as an indispensable partner in global decision-making, supply chains, trade, defence, and counter-terrorism. It is geographically poised in a strategic location. It is a littoral state of the Red Sea in the West and the Persian Gulf in the East. Saudi Arabia is the largest country in the Arabian Peninsula. Its Red Sea and Arabian Gulf coastlines cover about 1,760 kilometres and 560 kilometres, respectively. Its varied landscape covers deserts, mountains, grasslands, and forests. It borders Jordan, Iraq, Kuwait, Qatar, the United Arab Emirates, Oman, and Yemen. Its strategic location naturally enables it to expand its trade and connectivity linkages with Asia, Africa, and Europe. As such, Saudi Arabia holds significant geostrategic advantages, making it essential for projects like the India-Middle East-Europe Economic Corridor (IMEC), which represents a major milestone in global connectivity, aiming to integrate India, Europe, and West Asia. The successful realisation of this corridor would be nearly impossible without Saudi Arabia’s involvement.

Vision 2030: A Paradigm Shift

Since the 1970s oil boom, Riyadh has emerged as a leading supplier of energy. As per the latest reports, Saudi Arabia produced 8.93 million barrels of crude oil per day in January 2025. Its energy export profile was the largest among the Organisation of the Petroleum Exporting Countries (OPEC). Despite the rapid growth of its oil economy, the Kingdom remains steadfast in its commitment to economic diversification reforms initiated under the leadership of Mohammed bin Salman.

The Kingdom’s flagship project, Vision 2030, is a milestone in the area of economic diversification. Vision 2030 aims at a conducive ecosystem for entrepreneurship and investment, social welfare, tourism, technology, employment, health, education, infrastructure, sustainability, and innovation, along with gradual decoupling from the non-renewable fossil economy in times of climate change and global warming. The journey in this direction has been remarkably consistent.

In alignment with Vision 2030, the NEOM city project intends to augment renewable energy resources (solar and wind), smart city infrastructure with high-tech urbanity, preservation of biodiversity and environment, cutting-edge technology, global innovation hub, enhancing the quality of life with advanced services and amenities, tourism, infrastructure-loaded city space, pro-investment ecosystem, etc. In its bid for transnational cooperation over energy issues, India-Saudi collaboration on hydrogen energy projects is a great contribution to safe and green energy production. Alfanar and Aljomaih, Saudi companies, have invested in India for robust wind and solar energy projects. The Kingdom also invests in real estate, healthcare, telecom, automobiles, agriculture, infrastructure, entertainment, sports, aerospace, defence, transport, logistics, media, technology, hospitality, tourism, etc.

In defence and security, Saudi Arabia has increased its defence spending, military modernisation, advanced weaponry, regional security initiatives, and capacity building. Saudi Arabian Military Industries (SAMI) manufactures indigenous defence materials and goods. Riyadh imports tanks, aircraft, and missile systems from the US and other trusted partners. The patches of prosperity around conflict-packed, volatile West Asia generate the urgency of security firewalls. The Saudi-Houthi conflict increases the vulnerability of the region. In this regard, Riyadh has increased its defence preparedness to check the Houthis’ Red Sea disruption and obstructionism. Supply-chain clearance is Riyadh’s priority because effective energy transport ensures its economic strength. This explains the overwhelming Saudi diversification.

Given these lines of growth, investment, and expansiveness, the Indian expatriates (both skilled and semi-skilled workforce) have contributed significantly to various sectors such as construction, healthcare, Information Technology (IT), management, etc. The Indian entrepreneurs, doctors, engineers, teachers, accountants, bankers, scientists, etc., work in different sectors to give Saudi Arabia the required growth, development, and success. They also strengthen the bilateral ties between India and Saudi Arabia. Around 2.65 million Indians live in Saudi Arabia today. The staggering number suggests the deep concentration of Indians in every sector of activity.

The Kingdom has emerged as a key and influential member of the G20, a pivotal participant in the India-Middle East-Europe Economic Corridor (IMEC), and a dialogue partner of the Shanghai Cooperation Organisation (SCO). These developments reflect a fundamental shift in Saudi Arabia’s strategic approach, positioning it as a responsible power in West Asia.

The Saudi journey marks a shift from conservatism to modernity, gearing up further for assuming a leadership role in the changing geopolitics of the region.

Jajati K Pattnaik is an Associate Professor at the Centre for West Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Chandan K Panda is an Assistant Professor at Rajiv Gandhi University (A Central University), Itanagar. The views expressed in the above piece are personal and solely those of the authors. They do not necessarily reflect Firstpost’s views.