Saudi Arabian Vision 2030 Initiative to Facilitate and Promote International Relations: Using the Economic Integration Theory

Abstract

The kingdom of Saudi Arabia is blessed with many rich assets. Its geographic, demographics, cultural, economic, and social values enable it to take a leading role in the Arab world. Vision 2030 was unveiled in April 2016, a determined initiative aimed at economic development to enhance strategic partnerships with world countries and build the country's best future. The high economic reliance on oil and the price fluctuation in recent years, rising population and the emergence of creating millions of jobs soon, the instability of trade and investment relationships, and the numerous spillover consequences are significant challenges to Saudi Arabia’s economy. The research emphasizes three realization programs of the Vision: Hajj and Umrah program, investment partnership program, and Economic Integration. KSA is a geographic center of the Arab Peninsula, a gateway to launch coordination initiatives to ensure that synergy with partner countries connects strong ties with Europe, Asia, and Africa for economic Integration. These strategies envisaged Vision 2030 through stakeholders, citizens, and human capital to attain policy achievement. The study focuses on Balassa's Economic Integration Theory (EIT) to abolish discrimination between economic units belonging to various national states and the absence of different types of discrimination between national economies. Free trade area, customs union, common market, and a complete economic integration represent varying degrees of Integration. The dissertation objectives are multiple and mutually exclusive. This study examines the impact of religious tourism (pilgrims), investment partnerships with Asia, Europe, and Africa on the GDP of Saudi Arabia. It also evaluates the determinants of economic integration and its effect on the GDP of Saudi Arabia. With these purposes in mind, the study aims to explain the volatility in Saudi Arabia's international relations (IR) and how they relate to the economy. The robustness of methods has ensured to measure the impact of religious tourism impact, institutional quality, trade liberalization, political stability, government expenditures, and savings on the GDP, as only the religious tourism part was quantitative-based. The data was collected by World Development Indicators (WDI) and GAS websites from 2002-2019. The panel cointegration approach is employed to examine the long-run association and used an ARDL and the Granger causality tests to explore the complex relationship. The result of the analysis revealed extensive outcomes in the long and short run. The findings disclose that domestic and foreign tourism, institutional quality, and government consumption and savings have a positive and strong association with economic growth. At the same time, political stability found insignificant for both the long and short run. Moreover, Qualitatively, the government initiative of promoting investment through partnership improved the economy and significantly correlated with resilient economies and trade agreements. In inference, the advent of the Kingdom of Saudi Arabia’s vision 2030 facilitates and promotes international relations through economic development. The government engagement with experts and technocrats on the various modalities of transforming and diversifying the oil-rich economy away from oil dependency through the visionary infusion of economic integration theory. The vigorous involvement of the KSA shifting focus from a non-oil economic priority for alternatives factors like religious tourism, investment partnership, global trade liberalization for exports from 16% to 50% of non-oil gross domestic product (GDP). Henceforth, The KSA government has successfully retained responsibilities to meet with rising expectations and necessities of a new generation in transforming a thriving economy – that focus o