From sports to oil cuts: Saudi Arabia’s year in review

Jean Catuffe/Getty Images via Reuters

• Sole bidder for 2034 World Cup
• Kingdom to host E-sports World Cup
• Big rise in visitor numbers

As the curtain comes down on 2023 and Saudi Arabia moves closer to its Vision 2030 deadline, AGBI looks back at the highlights and notable events of the past twelve months in the kingdom.

Saudi Arabia wins hosting rights for major events 

Saudi Arabia’s drive to draw global attention to its development efforts scored important successes in 2023 when Riyadh was chosen to host the World Expo 2030 and the way was cleared for Saudi Arabia to host the football World Cup in 2034.

The kingdom is hoping to turn its once-forbidding capital into a global city by 2030, in time for the six month-long event, which has become a major showcase for host countries to highlight achievements, enhance branding and encourage tourism.

• Riyadh Expo 2030 to spur giga-project construction
• IMF trims Saudi 2023 GDP forecast but upbeat on 2024
• Saudi Arabia to begin preparing Vision 2040

In October, it emerged that Saudi Arabia was the sole bidder for the 2034 World Cup, assuring it will be confirmed as host by the governing body, Fifa, next year. Saudi authorities are considering holding the tournament in winter, as Qatar did in 2022, which will give it a chance to highlight its cooler climes, such as mountainous regions like Trojena in the northwest, where the Asian Winter Games will also be held, in 2029. 

Government revs up sport spending 

Saudi Arabia continued with its massive spending on sport. In June the Saudi Public Investment Fund took 75 percent stakes in four football teams, Al Ittihad, Al Hilal, Al Nassr and Al Ahli.

After Al Nassr signed Cristiano Ronaldo in December 2022 for a reported $200 million annually, making him the world’s highest-paid athlete, a series of major transfers followed, including Karim Benzema from Real Madrid, N’Golo Kanté from Chelsea, Roberto Firmino from Liverpool, former Aston Villa manager Steven Gerrard, and Neymar from Paris St Germain.

Reuters

The sports interest does not end with football. Reports in November said Crown Prince Mohammed bin Salman is interested in buying a multi-billion-dollar stake in the Indian Premier League, which would move the IPL into a holding company worth $30 billion.

The Qiddiya giga-project in Riyadh also said in December that it will build e-sports gaming venues, while the kingdom is to host the E-sports World Cup in Riyadh in October 2024.

“E-sports is one of the most important things happening globally… We don’t want to miss that,” the crown prince said in September, brushing off accusations of “sports-washing“. 

New commercial code 

A key plank of the Saudi economic reforms is changing the legal and regulatory framework in order to convince foreign businesses to operate in the country. Among Saudi Arabia’s legal highlights, details of a new commercial code were published in June, laying down clear rules for judges to follow on issues ranging from real estate to contracts to tort, debt and inheritance.

The code is expected to win final cabinet approval within weeks. The government hopes it will help raise foreign direct investment, which is still lagging well behind a 2030 target of $100 billion a year, and help encourage foreign firms to establish regional headquarters inside the country. 

Economic slowdown on oil output cuts

Saudi Arabia began voluntary oil output cuts in April that had a major impact on economic growth for the year.

The cuts, which aligned with Opec+ cuts led by the kingdom and Russia, were intended to push up oil prices during a period of slipping global demand and help to fill up the coffers of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, which is a 4 percent shareholder in the state oil company Aramco.

But in the second half of the year it became clear that the country was suffering an economic slowdown. In October, the International Monetary Fund trimmed Saudi Arabia’s GDP growth forecast for 2023 to 0.8 percent from its July estimates of 1.9 percent, and in December the ministry of finance forecasted 0.03 percent GDP for 2023 but a rebound to 4.4 percent in 2024. 

Sharp rise in visitor numbers  

Saudi tourism took major strides during 2023, with the highlights including visitor numbers shooting up and new projects being announced. Saudi Arabia had 14.6 million visitors from abroad during the first six months of 2023, a huge rise on the 6 million who visited in the same period the year before, including 45 percent for religious reasons and 20 percent for leisure.

The figure for the year is bound to well exceed 2022’s 16.64 million, which came after 3.48 million visitors in 2021.

New tourism projects were announced inside Neom in northwest Saudi Arabia and in the southwest Aseer region, where PIF established a developer called Ardara as well as the Aseer Investment Company.