Not just football: all about Saudi Arabia’s media activism
Saudi Arabia, a country closely linked to oil and which does not enjoy a good reputation, has launched a vast program of economic diversification and international promotion. Not only football, but also video games, clean energy and more
The Jeddah summit on the war in Ukraine , which ended in recent days, may not have produced great concrete results, but Saudi Arabia – which organized and hosted it – still served to relaunch its political role. Also in Jeddah, moreover, talks were held last May between the Sudanese army and the paramilitaries who had been fighting for weeks.
A lot of diplomatic effort is useful for promoting the international image of the monarchy – an authoritarian monarchy that represses dissent, which is involved in the war in Yemen and also in the murder of journalist Jamal Khashoggi – and consequently to its plan for economic diversification. Saudi Arabia wants to reduce dependence on oil, of which it is the largest global exporter, in anticipation of a lesser centrality of hydrocarbons in energy systems given the transition to sources with low or zero emissions.
INVESTMENTS IN FOOTBALL…
The sector in which Saudi investments are most visible is sports, and in particular football. A Saudi team, Al-Nassr, has offered Cristiano Ronaldo a salary of around 70 million euros a year; another team, Al-Ittihad, has signed a 200 million contract over two years with Karim Benzema. In 2021 Public Investment Fund , the Saudi sovereign wealth fund, bought English football club Newcastle. Next December the FIFA Club World Cup will be played in Saudi Arabia, and the country seemed intent on hosting the 2030 edition of the World Cup.
The attention to football cannot be explained not only by the economic diversification plan but also by the great popularity that this sport enjoys, and which could help Saudi Arabia improve its image in the world.
… AND IN OTHER SPORTS
Saudi investment in sports. however, they are not limited to football. The country has, among other things, created a professional golf league, LIV Golf. He set up a Formula 1 Grand Prix (in Jeddah, by the way). It has invested in rallying: the last edition of the Dakar Rally took place entirely within its borders. It has hosted numerous wrestling events in partnership with the US WWE federation. And the 2029 Asian Winter Games will be held in Trojena, in the desert.
According to the reconstruction of the Economist , Saudi Arabia has spent 10 billion dollars in the sports sector "between players, teams and leagues". "The kingdom", continues the weekly, "sees sport as a way to reinvest oil revenues and catalyze reforms at home, creating a larger service industry and stimulating tourism". To put things in perspective, however, the Economist points out that "Saudi Arabia's spending on players is worth only 6 percent of European football's annual operating costs".
SAUDI ARABIA DOESN'T PLAY VIDEO GAMES
Today sports are also electronic: they are called e-sports , they are video game competitions at a competitive level. But the global gaming market – worth 184 billion dollars – is mainly made up of amateurs looking for a little entertainment. To guarantee a slice of it, the Saudi government, through the Public Investment Fund, has invested 38 billion in this sector with the intention of going beyond both investments in foreign companies (such as the Japanese Nintendo, of which it owns 8.6 percent ) and e-sports , and create a domestic industry of developing and publishing titles.
ENERGY AND METALS FOR THE ECOLOGICAL TRANSITION
Saudi Arabia is also trying to convert its energy know-how to the ecological transition.
First of all, it is preparing to produce and transport green hydrogen, a clean fuel (it emits no greenhouse gases other than water vapour) that can be obtained from renewable electricity and used to power heavy industries.
Then there are the raw materials. In January, the Public Investment Fund and the state-owned Ma'aden mining company formed a joint venture dedicated to investments in metals, particularly those crucial to the ecological transition. The joint venture, called Manara Minerals, recently acquired a stake in the Brazilian mining company Vale with the aim of entering nickel and copper mining projects: copper is an excellent electrical conductor; nickel is used in electric vehicle batteries.
In addition to the extraction of raw minerals, Saudi Arabia is also focusing on their refining into industrial materials. For example, it wants to acquire lithium refineries – another critical metal for batteries – with the aim of positioning itself as a reliable and alternative supplier to China for Western car manufacturers.
THE CARS
Speaking of cars, the Saudi authorities want to reach 2030 with an annual production of 500,000 vehicles. Among the automotive companies active in the country is Lucid Motors, from the United States, in which the Public Investment Fund has acquired a majority stake. The fund has also launched its own brand of electric vehicles, Ceer, which will partner with BMW and Taiwanese electronic components company Foxconn to produce 170,000 vehicles annually.
THE 51 BILLION SHAREEK PROGRAM
In March, Saudi Arabia unveiled a $51 billion investment plan by national companies, including Ma'aden and state oil company Saudi Aramco. These investments will be made within a public incentive program called Shareek: it was launched in 2021 by Mohammed bin Salman, the Saudi crown prince and main promoter of the "Vision 2030" economic growth and transformation plan.
Among the first projects Shareek backed are Aramco and TotalEnergies' large Amiral petrochemical complex (an $11 billion joint venture); Ma'aden's plan to increase phosphate production by 50 percent and become the third largest producer of fertilizers by 2029; the 1.5 billion investment by the shipping company Bahri in a fleet of LNG carriers.
SAUDI ARABIA APPLIES TO EXPO 2030
Riyadh, the capital of Saudi Arabia, has applied to host Expo 2030 (Rome is also in the competition), which the monarchy considers an excellent opportunity to show the world the economic transformation of the city, which aims to become a regional hub of finance and entertainment.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/arabia-saudita-diversificazione-economia/ on Sat, 12 Aug 2023 05:48:02 +0000.