To what extent has Saudi Arabia’s approach to vision 2030 highlighted challenges to its corporate and governance landscape on account of the massively increased foreign investment it hopes to achieve?

Abstract

Saudi Arabia’s ‘Vision 2030’ is the most ambitious programme of reform embarked on by the Kingdom since it was first founded in 1932. At the heart of the ‘three pillars’ of Vision 2030 is to build a ‘thriving economy’ that is able to grow and diversify. However, at the root of this ambition is the need to ‘open for business’ and attract hitherto unheard of levels of foreign investment – which at the same time has manifested major changes in Saudi Arabia’s legal and regulatory landscape to better reflect the expectations and standards of its predominantly Western investors. However, due to the Kingdom’s unique Islamic theocracy, societal and religious context, it is not just a simple matter of transplanting one legal and regulatory framework in one country to another – as what may be ‘best practice’ in one part of the world may not implement perfectly in another. Accordingly, this paper explores the history behind Vision 2030, courses its main developments and achievements so far, and also what challenges and opportunities may present over the next half-decade or so. Ultimately, it will conclude that while KSA has made genuinely monumental leaps towards the achievement of Vision 2030 (compared to lesser known Kuwait Vision 2035, Qatar National Vision 2030 and Egypt Vision 2030 etc) – extreme care must be taken not to allow considerations on a national or international level (such as adoption of standards or laws) to overshadow the focus on the extent to which these changes are actually implemented at the local level, if at all. As for international investors, actual and evidenced compliance will be expected, not just ‘lip service’ or commitments. This will be vital to the complete success of Vision 2030 as not only does Vision 2030 seek to boost foreign investment, but it also seeks to bolster its domestic corporate sector. Therefore, to truly achieve this, a harmony must be struck between the two with both appropriately supported in the legislation – a task which will require monumental effort in refining both law and regulation to be optimised for the local population, while ensuring genuine regulatory overwatch. Regardless, Vision 2030 has set in motion changes that will be hard to revert to – and the authorities should be quick to utilise the momentum while they can.