Seven years ago, I moved from the US to Dubai because I recognized its potential as an up-and-coming hub for global business.
While only 50 years old, the city has quickly become a globally recognized economy and travel destination, with tourism accounting for over 20 percent of the gross domestic product (GDP) and oil only 1 percent. From tourism to trade ports to real estate, not to mention the concentration of finance and tech hubs, Dubai is able to articulately diversify its economic development strategy.
The strength of Dubai’s infrastructure lies not only in careful and strategic city planning and development, but also in its economic framework. As a tax-free city with free trade zones as well as tailored licenses and permits to facilitate foreign business across the board, Dubai’s fiscal structure laid the groundwork for economic diversification. In other words, it developed the right framework to attract the right kind of demand, and its economy has been reaping the benefits.
With a growing population of over 8 million (double that of Los Angeles) and a median age of 31.5, Riyadh is poised to follow suit. The Kingdom’s aggressive economic shift from oil to global investments has been enthusiastically embraced by Riyadh’s residents, speaking volumes about the capital’s innovative spirit. The youthful city openly leans toward private investment, new technology and connectivity, so it is no surprise that massive improvements in infrastructure, both physically and economically, are already underway.
Currently, Riyadh makes up 50 percent of the non-oil economy of Saudi Arabia. As with Dubai, the Saudi capital is taking all necessary steps to create a sustainable economy that can thrive without relying on oil. As of last week, 24 international companies, including Pepsico, Schlumberger, Boston Scientific, 500Startups, Greenbrier and Tim Hortons, have agreed to station their regional headquarters in Riyadh, citing potential for global business, tourism and emphasis on quality of life as main factors.
The introduction of international companies (with the goal of reaching 500 regional headquarters in Riyadh by 2030) will inevitably be accompanied by exponential job creation, driving further demand in a variety of crucial sectors. Combined with its plans for the tourism industry as well as infrastructure designated for trade accessibility, Riyadh may well be on the precipice of achieving its lofty goal of boosting the economy by $18.67 billion by 2030. Given this groundwork, the Kingdom’s announcement of its additional goal to double Riyadh's population by 2030 does not feel completely beyond its grasp.
However, there still remains the principle of retention. If you build it, it is true that they most likely will come. Dubai has proven this, and to some degree Riyadh already has, too. But the question remains: Will they stay? I refer back to Dubai’s recent policy changes regarding expats as an example of what might be possible in Riyadh.
While expats are invaluable to the country over the course of their career, the inherent transience of their lives prevents them from contributing fully. This is potentially problematic from the standpoint that most long-term expats increase their personal wealth while abroad, but once they leave, they take it with them. A country naturally invests in an expat’s family through education, community and thought diversity. When the family remains, these values become the country’s assets and inherently extend their community contribution.
Cities often see a better return on their international residents when they design incentives for retention. The UAE’s recent visa adjustments address that. The golden visa program, announced in January, allows for dual citizenship if specific requirements are met. The investor visa allows for full foreign ownership of companies within the UAE that, before 2019, had been allowed only within free trade zones. As an expat, I think this approach to retention reflects the nation’s creative thinking. I predict it will be invaluable to Dubai and could be the future of Riyadh as well.
* Carla DiBello is a documentarian and founder and CEO of CDB Advisory, a bespoke consulting firm that bridges connections across private sectors throughout the Middle East and North America.
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