Business

China Benefits from the Tech Modernisation of Saudi Arabia

NEOM- Smart City

Saudi Arabia is the largest country in terms of land area in the Gulf region. It also has the population that is more than the combined population of its neighbours. It also has a thriving economy that has helped it to act as the leader of the region. Its ties with the United States gave it added advantage in terms of both political as well as economic prowess and influence in the region. However, the advent of new-age technologies has planted the seeds of worries in the minds of the country’s officials. The Kingdom wants to diversify its economy and integrate tech as much and as smoothly as possible to have a better future in the era of advanced technologies such as AI and IoT.

Saudi’s Tech Institutions

According to a Foreign Policy report, the Kingdom has issued a royal decree that mandates the formation of three bodies which are:

  1. Authority for Data and Artificial Intelligence
  2. National Center for Artificial Intelligence
  3. National Data Management Office

The officials responsible for the formation of these bodies have been given a mere 90 days’ notice period after which the results should be produced before the Kingdom. The pressure is high on Saudi Arabia because of the developments in the neighbouring countries. For instance, the countries of UAE and Bahrain have invested heavily both financially and politically to implement the new technologies.

Limited Supply of Oil

The countries in the Gulf region have been graced with huge reserves of hydrocarbons, especially crude oil. The countries exploited the resources for almost a century now. This helped them become rich almost overnight and have been growing since then in almost the same way. However, times are changing rapidly now. We all know that the hydrocarbons are a non-renewable resource and their end is near and more so in the Gulf countries. Once their oil reserves dry up their economy will crumble if proper steps are not taken beforehand.

Environment Factor

The environment factor also plays a major role. The negative impact of climate change needs no introduction and the major reason behind it is the mindless use of hydrocarbons all over the world. The newer and greener methods of energy productions have put more pressure on these countries to sustain in the long run. Depending solely on the hydrocarbon resources will be a fatal decision for them.

Saudi’s Digital Transformation

Compared to other countries in the Gulf, Saudi’s digital transformation has been slower. The reason is the huge population and the large land area of the nation. It makes it difficult to implement the decision. However, it is not that big of a challenge as compared to the countries such as India, China and the US.

Apart from the above-mentioned point, the other major issue is the control that the established institutions have over the common people for so long. The kingdom fears that the integration of new technologies and the formation of newer tech-based and regulatory authorities will have a major negative impact on the stability of the traditional authorities.

Saudi Arabia’s Mega Smart City – NEOM

The plans that Saudi Arabia has in terms of new developments in the country is amazing and it justifies the hurry that they are showing in the integration of the new technologies. For instance, the construction of their new planned Mega Smart City called NEOM. The city planned to be situated on the Western end of the country is supposed to have everything connected to the internet, Artificial Intelligence enabled and equipped with Internet of Things. This might sound like something out of a science fiction movie but according to the ambitious plans of the Kingdom, it is very real. Moreover, the current technology that is available in the world also makes it seem quite possible although not very easy.

The major hurdle that awaits the project is the funding that seems to be utterly difficult and also the approval of such technologies that needs clearance from the government as well as the major developers of the world.

Saudi Arabia has also started 5G networks commercial operations in over 20 of its cities that it believes would help businesses. However, the non-oil economy of the country has grown from 2% in 2016 to a mere 3% in 4 years. This is a very slow and very less progress considering the financial prowess of the nation.

China’s Involvement

In an attempt to reach its ambitious digital transformation goal, China is coming forward as the biggest help to the Kingdom. China has proved its technological prowess combined with its financial strength that it can carry out such transformations in Saudi as well. China’s influence is also growing in the Gulf region. It is also eyeing the kingdom’s digital transformation as a great opportunity for its Digital Silk Route ambitions under the bigger Belt and Road Initiative.

It has been seen that China helped some countries previously in their digital transformation and event implementation of new security technologies. This is a two-way traffic that not only benefits China but also helps the client country in numerous ways.

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