Bloomberg — Will Brown, a Dubai-based global risk executive who has been traveling to Riyadh for work for almost seven years, has started to notice a change on his two-hour flight to the Saudi capital.
Rather than the usual cohort of males who make up the overwhelming demographic of professionals commuting to Saudi Arabia, there are now women and children on board.
“The plane isn’t just middle-aged white dudes flying in on a Sunday, you’re starting to see people move with their families,” said Brown, 49, who usually travels to Riyadh for the kingdom’s Sunday-Thursday working week.
Brown and his family will soon make the move to Riyadh full time, because his employer Control Risks, a global risk consultancy firm, is setting up its regional headquarters there.
The firm wants to comply with recent Saudi rules that restrict state entities from doing business with international companies that do not have their regional HQs in the country by January 2024, even if that may require a step back in terms of quality of life for its staff.
The new measures are intended to attract foreign investment and workers. They are part of Saudi Crown Prince Mohammed bin Salman’s ambition to open the country to international markets, putting the capital among the world’s 10 largest city economies and doubling its population to at least 15 million by 2030 — despite many traditional barriers related to the kingdom’s strict interpretation of Islamic law.
The push has not gone unnoticed in Dubai, the Middle East’s main business and tourism hub, which has long been the default option for expatriates.
As of end 2022, almost 80 companies have applied for licenses to move their headquarters to Riyadh, Saudi Investment Minister Khalid Al-Falih said in a recent interview, adding the city would become “the grand capital of the Middle East, politically and economically.”
But the big question is whether Riyadh is ready from an infrastructure, housing, lifestyle and even administrative standpoint for an influx of foreign white-collar workers and their families. Equally, a question mark hangs over whether people will be prepared to abandon the relatively freer and more cosmopolitan — albeit more expensive — Dubai to move there.
Saudi Arabia lags behind Bahrain, Qatar and the United Arab Emirates as a desirable destination for expats, according to an HSBC ranking.
Oil-rich Saudi Arabia certainly doesn’t lack the money to make the necessary changes, but evidence so far suggests there’s a long way to go.Despite recent easing of some rules, alcohol, extramarital relations and homosexuality are punishable “moral crimes,” and there are limited options when it comes to western-style residential areas and international schools.
And while football star Cristiano Ronaldo has been allowed to live with his girlfriend Georgina Rodriguez after he joined a Saudi soccer team last year, few others are awarded the same privilege. Foreigners also complain about the length of time it takes to secure a work visa, even while tourism passes are easier to obtain.
“There are infrastructure challenges and that’s where the teething issues are going to be, making sure there’s enough housing available, water, whether the road system can take it and so on,” said Metin Mitchell, who heads an executive recruitment firm that has been working in Saudi Arabia since 1995.
Glitzy and futuristic real-estate projects in and around Riyadh like the Mukaab — billed as “the world’s first immersive, experiential destination” that will house commercial, residential, retail and cultural spaces — have been announced this year but the much-awaited masterplan for Riyadh’s expansion has been delayed multiple times.
A metro system, which was set to be completed by 2019, has yet to open. Signs of trouble are also evident in the recent firing of the head of the Royal Commission for Riyadh City, the entity responsible for implementing the masterplan, suggesting frustration by the crown prince over a lack of progress.
The RCRC didn’t respond to multiple requests for comment, though the Minister of Economy and Planning Faisal Alibrahim told Bloomberg TV: “Riyadh is ready today and it will be ready tomorrow when more people come in.”
On the ground, a looming housing deficit in Riyadh has significantly pushed up rental costs. Annual payments for a two-bedroom apartment in one of Riyadh’s better neighborhoods has gone up by almost 12% over the past year to about SAR 181,000 ($48,260), according to Faisal Durrani, partner and head of Middle East research at Knight Frank, a global real-estate brokerage and consultancy firm.
He explained that’s due to a number of factors: more foreign professionals moving to Riyadh, limited availability in the housing compounds favored by Westerners due to relaxed dress rules, gyms and swimming pools, and a growing trend among young Saudis to move for job opportunities.
It’s also become harder for candidates for jobs in Saudi Arabia to demand extravagant salaries in return for moving, reducing the incentive to go. A slowing global economy and massive layoffs at some international companies are giving both Saudi and multinational employers more leverage, according to Chris Rea, associate director at recruitment firm Michael Page’s Saudi practice.
“It’s no longer a case of ‘I want a 50% increase to move’ — anyone who says that is pretty much a ‘no’ at the moment,” said Rea, adding that employees moving to Riyadh from Dubai could still get pay raises of 20%-25%.
A senior producer with the Saudi-owned media company MBC Group, which plans to relocate most of its staff from Dubai to its new headquarters in Riyadh by 2024, said he and others are getting salary increases of at least 35% to 40% and guarantees they’ll keep their jobs for five years — yet still many are dreading the move.
In Dubai you are an expatriate like the majority of people, but in Riyadh you have to deal with a local mindset, the producer said, declining to be named in order to speak freely about his concerns.
Most expatriates will not be ready for the kind of lifestyle Riyadh entails, said a European woman who recruits for the kingdom’s expanding hospitality market. She moved to the Saudi capital from Dubai a year ago and cites being unable to practice Christianity freely and a blanket ban on alcohol as factors.
Much Has Changed
Still, much has changed in Saudi Arabia. Women have joined the workforce in droves after Crown Prince Mohammed abolished strict dress codes, gender segregation and driving and travel restrictions. He has also curbed the power of the ultraconservative religious establishment that sought to impose its edicts by force on everyone, citizens and non-citizens.
But at the same time foreigners coming to Saudi Arabia must remember that any criticism of the leadership and system can lead to expulsion, prison or worse. The UAE imposes similar freedom-of-expression restrictions, but has decriminalized cohabitation, allowed civil marriage and ended fees for liquor licenses.
As Dubai becomes a more tolerant city, moving to Riyadh may seem a downgrade.
For others there are complications of another kind.
Brown, the Control Risks executive who is planning to move there over the next year, is trying to figure out a way to take his dogs with him: a Husky, a Saluki and a mixed-breed.
Bringing pets to Riyadh is far more restrictive than Dubai.
--With assistance from Fahad Abuljadayel and Matthew Martin
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