In which direction will Riyadh’s ambitions go against Dubai?
During the last decade, by presenting vision documents, the sheikhdoms of the Persian Gulf tried to present a different picture of the process of “development based on crude sales” to the world community. Saudi Arabia and the UAE as the main actors of the Persian Gulf Cooperation Council, focusing on reforms such as “overcoming Dutch disease”, “diversification of income sources”, “positive balance in foreign policy”, “regional networking” and “attracting foreign direct investments” They seek to change the political economy ruling the region and realize the goals of the 2030 and 2031 vision documents. Although these two Arab countries always try to present themselves as a single and united bloc in regional and international issues; But the distance between the parties to become the center of trade and investment in the Middle East has caused a conflict of interests and a kind of “hidden war” between Riyadh and Dubai. Perhaps the biggest symbol of planning to take the UAE’s place in the regional economy is the country’s 7.8 billion dollar investment to host Expo 2030. Based on this, in the rest of this article, we will analyze the differences between the two countries in the field of economic development and attracting foreign capital.
Riyadh’s deadline for transferring the offices of international companies
The most important strategy of the Saudi government to steal the ball of superiority from the UAE and the exit of international companies from Dubai is to pass the law to cut off cooperation with brands that do not move their regional offices to Riyadh. Currently, about 76% of the regional offices of international companies located in the Persian Gulf are located in Dubai and Abu Dhabi. In 2021, Riyadh announced in competition with the UAE that if international companies do not transfer their regional offices to Saudi Arabia by 2024, Saudi Arabia will not allow these brands to operate in the Kingdom.
Also, Saudi Arabia plans to attract foreign companies from the UAE by offering incentive packages such as tax exemptions. In March 2023, Saudi Investment Minister Khaled Al-Falih announced the request for permission of more than eighty companies to transfer the regional offices of Shaan to Riyadh. The Saudi government plans to inject 18 billion dollars into the economy of Arastan and create 30,000 stable jobs in the vision of 2030 by hosting the headquarters of 480 international companies. Despite drawing the perspective of attracting foreign companies and Saudi practical measures to achieve this goal, but still obstacles such as the lack of completion of urban infrastructure in Riyadh, the UAE’s economic privileges and the lack of amendments to foreign business laws cause international companies to hesitate to move their headquarters to Saudi Arabia.
Sea-air transportation; From Dream to Reality
According to the report of “Al-Marqas Al-Arabi Washington DC”, the second key step of Mohammed bin Salman to change the equation of competition with the UAE was the investment of 147 billion dollars in the field of infrastructure development and advanced transportation. In March 2023, the Saudi State Investment Fund announced that by purchasing seventy-two Boeing 787 Dreamliners and launching the “Riyadh Air” airline, it entered a new stage of competition with Qatar, Emirates, and Turkish airlines. This airline is going to start operating in 2025. Saudi authorities announced that they plan to build an airport with an area of 57 square kilometers in the Saudi capital, which will host 120 million passengers by 2030. Currently, Dubai Airport is the third busiest airport in the world, hosting seventy-five to ninety million passengers. The Saudis hope to reduce the share of other regional companies by investing in air transportation and becoming the largest airline company in the Middle East.
Another area of competition between Riyadh and Dubai is the development of the maritime influence of these two actors in the Indian Ocean and Red Sea region. By expanding their influence in the southern ports of Yemen and the coasts of the Horn of Africa, the Emiratis intend to complete the chain connecting the port of Jebel Ali to the Suez Canal and African markets. According to the “Middle East” Institute, Jebel Ali port of the UAE under the management of the operator “DP World”, with a capacity of 19.3 million tons of cargo, is one of the five main maritime transit hubs in the world, which alone accounts for a third of the UAE’s gross domestic product. On the other hand, based on the Vision 2030 document, the Saudis intend to strengthen the kingdom’s position in the world trade chain and the Red Sea region by investing in the ports of Jeddah, King Abdulaziz, and Jizan. In this section, it seems that the Saudis are not easily able to take the position of Bandar Khalifa or Jabal Ali. For example, UAE ports alone support and facilitate two-thirds of China’s exports to Europe, the Middle East, and Africa.
