Saudi Arabia’s socioeconomic reform plan, Vision 2030, spearheaded by Crown Prince Mohammed bin Salman, is struggling to achieve projected goals as oil prices stagnate and the funding plan is affected. Riyadh has made a complete about-turn in its foreign policy, especially in Yemen and Iran, as the regime seeks to maintain the region’s stability to support realizing its ambitions for giga-projects such as Neom and The Line. 

Thus, Saudi Arabia is pragmatic, though rather assertively but cautiously, adjusting its foreign policy to the new international politics while addressing its internal socio-economic changes in conjunction with the radical transformations initiated by Crown Prince Mohammed bin Salman.

After Turkey’s Islamist AKP government was elected in 2002, it adopted the policy of “no problems with neighbors,” the same as Saudi Arabia has started to turn to diplomacy now. Saudi leadership, after years of highly assertive policies in Yemen and escalating confrontation with Iran, felt exposed and defeated on the international stage. The aggressive actions of Mohammed bin Salman in Yemen and the murder of Jamal Khashoggi only intensified the isolation of Riyadh.

The last straw was in 2019 when accurate drone and missile strikes incapacitated Saudi oil facilities, resulting in a global reduction of production by 5 percent and causing Riyadh to question its loyalty to bin Salman and to U.S President Donald Trump, who encouraged the young Crown Prince to carry out reforms while providing him with nothing more than token measures such as releasing oil into the market which only served to expose the kingdom to more risk. 

A year later, Joe Biden’s election and his commitment to depicting Saudi as an aggressor in Yemen reported the kingdom’s overreach to the world.

Under increasing pressure, the Saudi leadership initiated the most spectacular and conscious foreign policy reversal. In March 2023, the kingdom officially recognized Iran as its neighbor and entered formal relations in a facilitated deal. This sudden diplomatic move came after Saudi Arabia attempted to seek solutions to the disastrous Yemen war, which was costly both financially and in terms of image. 

The kingdom was eager to bring stability to the region to shield its ambitious Vision 2030 schemes, which rely on foreign investment to overhaul the economy.

Vision 2030 is a long-term agenda of the kingdom of Saudi Arabia that how Saudi will emerge as an economic giant and break its over reliance on oil in 15 years. At the core of this vision are several mega-projects, such as Neom, an extraordinary city inhabited by a 170km horizontal building called The Line. However, many people consider these futuristic developments unrealistic ‘gamer fantasies,’ but the Saudi leadership is keen on ensuring that these projects are implemented. 

However, economic pressure to fund these projects is on the rise. The investment kingdom’s Public Investment Fund, which controls these affairs, has 168 subsidiaries with more than $1.25 trillion, but oil prices are under the required $96 per barrel. One of the cornerstones of Vision 2030 is foreign direct investment, which, however, is still significantly lower than the desired $100 billion annually.

Of these projects, Riyadh has tried to find a breakthrough in the region similar to the success of Houthi forces in Yemen. The Saudi regime interceded in a conflict with the Houthis in 2022, and more recently, Riyadh has been striving for the security of the Red Sea shipping routes endangered by the Houthi attacks. A rational necessity has thus brought about the change of gears from military intervention to diplomacy due to continued losses to Saudi Arabia’s economy.

On the other hand, bin Salman’s government is hatching domestic changes to change Saudi society. Females can drive and fans of sports like football have the opportunity to come across star athletes like Cristiano Ronaldo. However, these reforms continue to be elitist and top-down, which targets primarily the urban, affluent Saudi with a Western disposition. On the other hand, domestic repression has increased, especially for supporters of Palestine; for instance, entire tribes were displaced for development projects such as The Line.

As bin Salman aims for a defense pact with the US, his previous stance was ambiguous and turned pro-Palestine. Currently, Riyadh demands Palestinians to create the state, distancing the normalization of relations with Israel from the overall cooperation with the United States. This shift is symptomatic of a wider recalibration as Saudi Arabia looks to navigate its foreign relationships away from the detriment of Vision 2030.

 Whether these gambles will prove profitable remains to be seen. For now, it remains utilized to the success of the giga-projects and the constant changes in its approach to regional diplomacy.