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TRANSFORMING THE RENTIER STATE: PROSPECTS FOR SAUDI ARABIA: A SMALL N CASE STUDY OF RENTIER STATE ECONOMIC DIVERSIFICATION AND ITS EFFECTS WITH APPLICATION TO SAUDI ARABIA’S VISION 2030 by MOHAMMED ALJUMIE A Dissertation submitted to the Graduate School-Newark Rutgers, the State University of New Jersey In partiaL fulfiLLment of the requirements for the degree of Doctor of PhiLosophy in GLobaL Affairs Graduate Program in GLobaL Affairs Written under the direction of Carlos Seiglie and approved by Newark, New Jersey October 2020 ©2020 Mohammed ALjumie ALL RIGHTS RESERVED ABSTRACT OF THE DISSERTATION Transforming the Rentier State: Prospects for Saudi Arabia: A SmaLL N Case Study of Rentier State Economic Diversification and its Effects with Application to Saudi Arabia’s Vision 2030 BY MOHAMMED ALJUMIE Dissertation Director: Dr. Carlos Seiglie This research project sought to determine, to the extent feasible prior to fulL implementation of the eLements of Saudi Vision 2030, the degree to which a strategy for economic diversification incLuding major legaL, regulatory and governmentaL activities and culturaL shifts is LikeLy to achieve its fundamentaL goaLs of economic diversification and an end to reLiance on rentier state resources. Saudi Vision 2030 depicts a comprehensive approach to achieving economic diversification whiLe diminishing the Kingdom’s reLiance on oiL and gas sector revenues. The researcher compared the possible impact of diversification via Saudi Vision 2030 to case studies of simiLar diversification in Bahrain, Kuwait, Oman, Qatar, and the UAE. The comparison identified the specific deveLopment initiatives undertaken by the five target states and their known economic impacts, and then further considered whether simiLar eLements or proposaLs of Saudi Vision 2030 might achieve simiLar ends. Such a study has the potentiaL to offer insight into the ultimate viabiLity of Saudi Vision 2030, particularly in Light of the type of socio-culturaL and economic changes that it wiLL introduce in a country ii noted for its conservative, traditionaL attachment to long-standing norms, vaLues, and morals. Further, given the importance of public understanding and acceptance of new governmentaL policies in any country, the study highlighted the degree to which Saudi Vision 2030’s emphasis on acquiring more foreign direct investment and, consequentLy, more foreign nationaLs living and working in the Kingdom, wiLL resonate with its public, as weLL as any synergies between this plan for economic diversification and efforts undertaken eLsewhere in the region. The study used the SmaLL N case study methodology in deveLoping comparisons of the economic diversification efforts of the target countries with the plans articulated in Saudi Vision 2030, taking into consideration the impact of recent world and regionaL events and assessing their likeLy impact upon fulL implementation of Saudi Vision 2030. iii DEDICATION AND ACKNOWLEDGEMENT My journey through the doctoraL degree program at Rutgers University has been a Lengthy and chaLLenging effort. At times I have interrupted my studies to address issues of significance in my famiLy and my own life. As I approach the concLusion of this journey, there are many individuaLs to whom I must offer my thanks and my appreciation for their continued support and understanding. I could not have completed this journey without the support of my beLoved mother and father, who have encouraged me to deveLop personaLLy and academicaLLy throughout my entire life. And I am duty-bound to convey my gratitude to my eLder brother Ahmed, who was like my backbone and stiLL supports me unconditionaLLy. I pay homage to my brothers, Ahmed, AbdaLLah, Nasser and KhaLid, and to my beLoved sisters, MashaeL and Nouf. The loss of our father in 2019 was a devastating blow to our entire famiLy, and it is to his memory that I dedicate this dissertation. Of course, I owe much to the many individuaL professors who have guided me through my coursework and through this dissertation and have inspired me to continue when the journey became difficult. I must particularly thank Prof. Carlos Seiglie: you have been a tremendous mentor and a good friend to me. I would aLso like to thank my committee members Prof. Mariana Spatareanu, Prof. Mario GonzaLez Corzo, and Prof. Douglas Coate. iv Table of Contents CHAPTER I Introduction .............................................................................................. - 1 - CHAPTER II Review of Literature ............................................................................. - 18 - Vision ReaLization Programs ................................................................................. - 24 - CHAPTER III Methodology ....................................................................................... - 80 - Limitations and DeLimitations of the Study .............................................................. - 88 - CHAPTER IV Results ................................................................................................. - 90 - Countries and Economies ......................................................................................... - 92 - CHAPTER V Discussion of Results ......................................................................... - 124 - CHAPTER VI Summary, ConcLusions, and Recommendations .............................. - 139 - References .................................................................................................................. - 147 - v List of Tables Table 1 Saudi Arabia Economy Data to 2015 .............................................................. - 45 - Table 2 .......................................................................................................................... - 46 - Table 3 .......................................................................................................................... - 47 - Table 4 Budget ALLocation by Sector ........................................................................... - 51 - Table 5 .......................................................................................................................... - 52 - Table 6 Some of the Projects to be DeveLoped as a Part of Vision 2030 ..................... - 55 - Table 7 .......................................................................................................................... - 56 - Table 8 GCC Countries: Recent Key StructuraL Reforms ............................................ - 62 - Table 9 SeLected Economic ProfiLes, GCC Countries .................................................. - 65 - Table 10 HDI Current Rankings ................................................................................... - 92 - Table 11 UNDP Gender InequaLity and DeveLopment Indices (Women) .................... - 94 - Table 12 Average AnnuaL HDI Growth Percentage ..................................................... - 95 - Table 13 Leading Economic Indicators, CIA World Factbooks, 2019 ...................... - 104 - Table 14 Key Diversification Activities in GCC Countries ....................................... - 120 - Table 15 Diversification Rankings by Diversification Strategy ................................. - 121 - vi vii List of IlLustrations Figure 1 ........................................................................................................................... - 5 - Figure 2 ........................................................................................................................... - 6 - Figure 3 ......................................................................................................................... - 34 - Figure 4 ......................................................................................................................... - 35 - Figure 5 ......................................................................................................................... - 36 - Figure 6 ......................................................................................................................... - 37 - Figure 7 ......................................................................................................................... - 38 - Figure 8 ......................................................................................................................... - 50 - Figure 9 ......................................................................................................................... - 98 - Figure 10 VisuaLization of Economic Diversification .................................................. - 99 - Figure 11 Graphic Images of ReLationships in State Economies ................................. - 99 - Figure 12 ..................................................................................................................... - 101 - Figure 13 ..................................................................................................................... - 101 - Figure 14 ..................................................................................................................... - 102 - Figure 15 ..................................................................................................................... - 119 - vii - 1 - CHAPTER I Introduction The goaLs of this study were to identify and assess the status of Saudi Vision 2030, a plan for diversification of the Kingdom’s economy and its use of new business deveLopment strategies, and to consider how neighboring rentier states have taken simiLar
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