Saudi Arabia's G20 challenge: Investing in human rights
As Saudi Arabia prepares to chair the annual G20 summit on 21 November, the kingdom finds itself at an interesting - and potentially dire - crossroads. Oil prices have plummeted this year, largely as a consequence of Covid-19, with Saudi Aramco reporting a 50 percent fall in net income in the first half of its fiscal year.
Crown Prince Mohammed bin Salman maintains an ambitious economic diversification plan, Vision 2030, which hopes to boost the economy using one main instrument: foreign-investment-led mega projects. There’s just one problem. In a post-Khashoggi Saudi Arabia, foreign investment appears to be necessarily linked to human rights reforms, a subject historically anathema to the kingdom.
The immediate aftermath of the murder of journalist Jamal Khashoggi left Saudi Arabia in economic peril. An economy worth $790bn brought in less than $5bn in foreign direct investment last year - less than half the government’s target, and a number likely to shrink further in 2020. Many foreign investors who had, just months prior, been scrambling to secure economic deals in line with Vision 2030, disappeared overnight.
International businesses are slowly shying away from mega project investments. Let’s take the case of Neom, a mega project envisioned as the city of the future. The $500bn Neom scheme is planned to span three countries, covering 26,500 square kilometres, with unprecedented features: flying taxis to take residents to work, artificial sand and robot maids.
If the kingdom is serious about transitioning to a sustainable, diverse and world-leading economy, it will have no choice but to improve its human rights record
Back in 2018, the chief executive of German multinational Siemens, which had been identified as a potential partner in the development of Neom, risked billions of dollars’ worth of business by pulling out of a major investment forum in Saudi Arabia, citing human rights concerns. More recently, the European Saudi Organization for Human Rights reported that Japan’s SoftBank, which had been previously identified as a potential investment partner, had not yet committed to supporting Neom.
When e-sports league Riot Games announced a partnership with the Neom project earlier this year, it met a huge outcry from fans and supporters. Twitter exploded with reports of Saudi Arabia’s abysmal human rights record. The pressure mounted so rapidly and furiously that Riot Games announced the termination of the Neom partnership less than 24 hours after it had been revealed.
The message from the international community could not be clearer: if the kingdom is serious about transitioning to a sustainable, diverse and world-leading economy, it will have no choice but to improve its human rights record.
Glacial pace of reforms
There are nascent signs that Saudi Arabia may be picking up on at least some of these priorities. Its government made headlines in 2018 by allowing women to drive. It also recently announced that it would end child executions, and made shy commitments to end the exploitative kafala system. Yet, implementation of reforms has been glacial, with mixed responses from civil society groups.
Meanwhile, abuses associated with the Neom project continue unabated, as construction involves the bulldozing of local indigenous communities. A spate of human rights abuses associated with Neom reached a climax in April, when activist Abdul Rahim al-Hwaiti was killed by Saudi security forces after his tribe protested against the implementation of the mega project. Saudi authorities said the activist had attacked security forces.
In October, tribal leaders petitioned the United Nations to intervene in the project, citing substantial human rights concerns. Looking ahead, human rights watchdogs are already sounding the alarm over the rapidly developing Saudi surveillance state, raising issues that would be compounded in a high-tech mega-city.
The international community has a vital opportunity to alter the path forward. Lessons can be learned from the Riot Games experience. With increasing, bottom-up pressure stemming from workers and worldwide consumers, alongside the activism of a vibrant dissident Saudi diaspora, international businesses will likely pay increased attention to the reputational costs of involvement with the wrong partners, and further scrutinise the human rights implications of their operations in Saudi Arabia.
Beyond priceless PR campaigns, Saudi Arabia will need to change its relationship with human rights if it hopes to shift its economy and change its relationship with the international community. This starts at the fundamental level, by applying human rights-focused due diligence everywhere, including at the conceptual stage of projects such as Neom, while guaranteeing buy-in from local communities and obtaining a social licence to operate.
Social dialogue, a key driver of business growth and economic performance, should also form the basis of the kingdom’s new social contract under Vision 2030. The Saudi government could then continue by respecting and protecting political and social rights, ending crackdowns on local indigenous populations, and rooting out systemic discrimination against women and migrant workers - perhaps all pipe dreams several years ago, but attainable in the new Saudi context.
With the world’s largest economic powers arriving in the country for the G20 summit, this is a golden opportunity for the international community, governments and businesses to demand fundamental changes from the Saudi government.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.