National Transformation Plans and Lessons for Saudi Arabia

Source: geopoliticalfutures.com --- Monday, May 16, 2016
By Yannis Gatsiounis saudiarabia’s Vision 2030 plan is designed to diversify the economy away from oil . The government hopes this will happen within the next 20 years. The plan will be backed by a $2 trillion sovereign wealth fund – the world’s largest – and will move the country away from its main revenue stream. All-encompassing national transformation plans are nothing new. From communist Russia and China to developing free markets like Malaysia and Kenya, the common thread among their adopters is anxiety about the future. They imbue nations with a sense of purpose and pride – and in doing so can buy their leaders additional time in power. But the future their architects envision is often unrealistic. They heavily rely on some resources at their disposal, such as money, and underestimate the importance and difficulty of nurturing other resources, like institutions and human capital. Every country must work within its constraints and set realistic goals to succeed. And money doesn’t buy your way past those constraints, even though it does allow you to more effectively work within them. Minding a Country’s Constraints When devising a plan to transform a country’s economy, it is key to consider the constraints within which the government must operate. Take Malaysia as an example. In 1986, Malaysia, experiencing high growth rates from growing oil revenues, embarked on Vision 2020, a plan to fully develop the country by that year ...