The lingering wealth gap in Saudi Arabia
Vast state spending is driving development, but some regions say the fast-growing capital is getting too much of the money
Andrew England and Ahmed Al Omran in Abha
When Abdulrahman is finished serving customers at a trendy café in Abha, he often clambers on his motorbike and heads for the cooler air of the mountains.
The highways leading out of the southern Saudi city, the capital of Aseer province, are a biker’s dream as they bend their way dramatically up to the kingdom’s highest point and provide dramatic vistas across the Soudah mountain range.
Its escarpments are layered with forests of juniper trees, and home to troops of baboons.
Beyond them lies Rijal Almaa, a sleepy 900-year-old village of gingerbread-coloured stone houses.
But for the past two years, the views from Soudah have been spoiled by tall, steel mesh fences that stretch for miles along the highway.
“It’s annoying,” says Abdulrahman.
“People like to go to the peaks.”
Yet any frustration is tempered by the promise of what is to emerge from behind the fences and construction hoardings: a multibillion-dollar luxury tourism development, Soudah Peaks.
It has a target of attracting 2mn visitors to the area annually.
“We are waiting for the projects to open,” says Abdulrahman.
“Not just for the tourists, but also to attract other investments.”
Like other rural regions, Aseer for decades struggled to attract attention from central government.
But today the province, which has the highest unemployment rate in Saudi, is an integral part of Crown Prince Mohammed bin Salman’s ambitions to develop tourism and an important barometer of whether his transformation plans will trickle down to regions with fewer opportunities and lower incomes.
“The kind of things we see in Aseer are a real test of the government’s rhetoric that every part of the country is going to benefit in accordance with its comparative advantage,” says Andrew Leber, a non-resident scholar at the Carnegie Endowment for International Peace.
“Is this real, or just fancy talk to get people not to focus on the fact that all the opportunities are in Riyadh or Neom?”
Since Saudi Arabia launched a “Vision 2030” plan in 2016 to transform the kingdom, much of its massive spending has been directed into the capital city (and traditional power base of the al-Saud family), or to Prince Mohammed’s flagship Neom megaproject in the north-west of the country.
Prince Mohammed’s goal is for Riyadh to become one of the world’s “top 10 economies” and in recent years it has boomed as foreign companies and Saudis searching for higher-paying jobs pour in.
But as the capital flourishes, with fancy new restaurants and entertainment spaces proliferating the city, experts warn of the risks of a sense of marginalisation festering in other regions.
The Globe restaurant in Riyadh. Much of the spending from the prince’s ‘Vision 2030’ plan has been directed into the capital, but experts warn of a sense of marginalisation in other regions © Benny Marty/Alamy“In other parts of the country there’s less buzz, less energy, and a sense of less opportunity.
These dynamics have led to some people feeling left out — it’s already happening,” says Sanam Vakil, Middle East director at Chatham House.
“If Vision 2030 is going to be a successful initiative that leads to the economic and social transformation of the kingdom, it can’t leave swaths of the population behind.
It has to bring everyone along on this journey.”
Saudi Arabia is not the only Gulf state seeking to diversify its economy away from oil.
But it faces unique challenges because of its size; it covers an area of 2.15mn square kilometres and its population is bigger than the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain combined.
That means its resources are stretched thinner, and it has to grapple with issues such as joblessness, poverty and inequality that are far less prevalent in smaller and proportionately wealthier states such as the UAE and Qatar.
For decades, the autocratic monarchy sought to manage its resources and its population through a patriarchal, cradle-to-grave welfare system that doled out benefits and government jobs to Saudis, while over 10mn migrant workers did mostly low-paid work.
With most Saudis dependent on the state for their income, the economy’s health was tied to the ups and downs of crude prices.
Prince Mohammed’s goal is to reduce that dependence, establish new industries and wean Saudis off their reliance on the state.
As Vision 2030 enters its last phase, the government can claim important successes, including sweeping social reforms that have radically shifted mindsets about what is acceptable.
The female labour participation rate has risen from about 20 per cent a decade ago to 36 per cent in the first quarter of 2025, helping to push Saudi unemployment to historic lows and boosting household incomes.
New sectors such as entertainment and tourism have created private sector jobs and driven non-oil growth.
Yet there are significant disparities between Riyadh and other regions.
According to a 2023 government survey, the average monthly disposable income for a Riyadh household was 26,000 riyals ($6,933), more than twice that of one in Najran, a small province to the east of Aseer.
Unemployment follows a similar pattern, with joblessness among Saudi citizens in the capital just over half the national average.
Saudi officials say they recognise the potential risks of areas feeling left behind, but counter that it is natural for the capital to be a hub for economic activity and employment.
Economy minister Faisal Alibrahim insists the kingdom does not “exhibit meaningful geographic disparities in basic human capital”.
The challenge, he says, is “uneven growth” and its potential effects.
“Disparities in transition are normal.
What’s important is to understand what’s driving them,” Alibrahim says.
“Is it transitionary?
Is there a pattern or cause that we need to pay attention to?”
But a government consultant says “all of the [provincial] governors are saying ‘why are all the benefits going to Riyadh?’”
Even in Saudi Arabia’s second-largest city and commercial centre, Jeddah, there are complaints about the relocation of entities such as Saudi National Bank and the civil aviation authority to Riyadh and the fortunes being spent on megaprojects.
“Instead of building Neom, they should be repairing the roads in Jeddah,” says one resident.
“In some areas of Jeddah, they don’t have sewage and water networks.”
The state has earmarked at least $20bn for various projects in Jeddah, including the rehabilitation of its old city and a downtown development.
But it is still a fraction of the amounts being spent in Riyadh or Neom, and residents say growing numbers of young Jeddawis are relocating in pursuit of better jobs.
“If you’re looking to perform and want to be at the top on a national level, you need to move to Riyadh,” says one young professional.
“That’s where the opportunities are.”
A computer-generated image of Soudah Peaks. Development in the area is an important barometer of whether the prince’s transformation plans will trickle down to regions with fewer opportunities and lower incomes © Soudah Peaks Tourism ProjectMany young Saudis — 70 per cent of its population is aged under 35 — are enthusiastic about tapping into Riyadh’s new dynamism, he says.
There is also a desire among those who have bought into Prince Mohammed’s plans to feel they are contributing.
“It’s not just about people from Jeddah, but people from across the country.
They want to be part of something bigger.”
But others move to Riyadh out of economic necessity, particularly those from rural areas.
“Everyone is leaving,” says a 30-year-old Uber driver from Aflaj, a region about 300km south of the capital.
He says there are few good jobs in his home area.
“But we are thousands, so what do we do?
Go to Riyadh,” he says.
Once in the capital, he discovered “everything is expensive”.
A Saudi analyst says he is more worried about the impact on the capital itself.
“We are witnessing a major internal migration to Riyadh that is putting pressure on housing,” he says.
“You would think it’s almost in a different country to the rest of the cities, both in terms of volume of transactions and rental rates.”
Knight Frank, the real estate group, estimates that a quarter of a million Saudis have moved to Riyadh over the past five years, which combined with expatriate relocation has pushed up rents by 30-40 per cent.
Albrahim says these are “byproducts” of a wider set of objectives.
“We want people to seek private sector employment, higher value jobs, regardless of where it is,” he adds.
“The byproducts are something we look at.”
But the risk, the Saudi analyst says, is the rise of urban poverty as people move to a high-cost city to do relatively low-paid jobs while the traditional social contract is shaken up.
State subsidies on electricity, water and fuel have been cut.
Value added tax was introduced in 2018, and tripled during the Covid-19 pandemic.
The retirement age was recently raised from 58 to 65 and there are plans to streamline the bloated civil service.
The government does not publish poverty rates, but a UN Economic and Social Commission for Western Asia (Escwa) report released two years ago found that despite a sharp decline in poverty, one in seven Saudis were still affected by it, based on a threshold of SR5,394 per household per month.
Saudi officials point to a “Citizen’s Account” programme introduced in 2017 to provide targeted support to lower-income families, but analysts say reforms to the welfare system have still been a shock to many.
“It’s tough to realise public sector jobs are no longer abundant in your region, and that might explain why Generation Z, especially, are moving to Riyadh for barista or retail jobs,” the Saudi analyst says.
Such decisions were “unthinkable five years ago”.
A troop of baboons in Aseer province. A multibillion-dollar luxury tourism development, Soudah Peaks, set to be built in the area, has a target of attracting 2mn visitors annually © Stephen Foote/AlamyFinance minister Mohammed al-Jadaan says the government cannot control internal migration but focuses on providing “opportunities for reskilling and education”, with social support where needed.
“We have seen examples [of problems in other countries].
We are very careful,” he says.
“But we also see opportunities and other examples of where countries have much better mobility of human capital that actually harnesses more potential.”
He suggests there will not be investment for the sake of it.
“Basic services will continue to be provided to every region, every person, wherever they are,” Jadaan says.
“But are you going to create infrastructure for fancy public transport in an area that has 1 or 2 per cent utilisation?
That would be foolish.”
Aseer, home to 2mn people, was the first province to produce a “development strategy” in co-ordination with the government.
It has become a template for other regions still working on their own plans, officials say.
In Abha, there are signs of the trickle-down effects of the social reforms.
Most women still wear the niqab, the full-face covering with a thin slit exposing their eyes, but it is common to see them driving and mixing with men in the trendy coffee shops and malls that have sprung up across the conservative city.
Young Saudis work as baristas, waiters and taxi drivers, while men walk along jacaranda-lined streets in shorts, which would have been taboo a decade ago.
All hint at the drip-down of the nationwide transformation taking place, and shifting attitudes.
But it is the state-backed projects that ministers and Aseeris alike are betting will transform the province.
All the province’s major development initiatives are dependent on the Public Investment Fund, the powerful sovereign wealth fund that Prince Mohammed has tasked with spearheading his development plans.
Prince Turki bin Talal, Aseer’s governor, says the state has committed SR25bn to his province, SR20bn of which is Public Investment Fund funding. Now, ‘a similar effort must be made in the private sector’, he addsOfficials in Aseer boast that the province has the highest concentration of PIF projects outside Riyadh.
That shows how concentrated the PIF’s domestic developments are — Aseer has three as well as an investment company backed by the fund.
Two are in Abha, including a huge entertainment complex and a large residential, retail and tourism development.
The flagship is the Soudah Peaks scheme, featuring ultra-luxury clifftop hotels, mansions, villas, golf courses and high-end glamping.
“The intention is for it to be the Beverly Hills of Saudi Arabia,” says Prince Turki bin Talal, Aseer’s governor.
Like many PIF projects, it was delayed before it even began.
The first phase was to be finished in 2027, but construction has yet to start.
Prince Turki says the delays have been resolved, with work expected to begin soon.
In the past, he has hinted at frustrations that the PIF companies leading the developments are headquartered in Riyadh and that it is a battle to encourage skilled workers to relocate to Aseer.
He says those issues have been overcome and credits the government for backing plans to expand Abha’s airport and construct a new highway to the coast, as well as building hospitals, a university and increasing water supply to the city.
The state has committed SR25bn to Aseer, he says, SR20bn of which is PIF funding.
Prince Turki still worries about young Saudis leaving — Aseer had the highest net outflow of the kingdom’s provinces in 2017 — and the skills gap.
But he believes those trends are also being reversed, citing the fall in unemployment among Saudis in the province from 17 per cent three years ago to 10.7 per cent now.
“Over time, these government projects will bring economic growth and job creation.
A similar effort must be made in the private sector,” Prince Turki says.
“The government [employment] sector isn’t going to expand a lot, so what do we do?
We go to the private sector.”
There are signs that Aseer is attracting some private investment.
A Saudi company is developing a retail and hotel complex in Abha, in partnership with a government tourism fund, while US-based Amek Group plans to build a $150mn luxury hotel in the Soudah mountains.
Rijal Almaa, a heritage village in Aseer province, where the unemployment rate is the highest in the kingdom. Crown Prince Mohammed bin Salman is keen to develop tourism in the countryBut it is the PIF projects that will determine if tourism takes off in Aseer on the scale Prince Mohammed envisages, underlining that for all the talk of the private sector, the state remains the driving force behind development.
Under the crown prince’s leadership, the PIF has become the dominant force in the economy, spending hundreds of billions of dollars on a huge portfolio of developments and establishing dozens of new companies.
But the PIF is coming under pressure to deliver returns on its investments and focus on those projects with hard deadlines.
Many others are being scaled back or delayed.
Prince Turki is optimistic that Aseer will not be affected, given that Prince Mohammed himself chairs the Soudah development company and has earmarked Abha as a host city for the 2034 football World Cup.
“His highness said Aseer is a prime location for developments in Saudi Arabia, and it will remain a prime place,” Prince Turki says.
The challenge, he adds, is not to “overpromise and underdeliver”.
Delivery is what Aseer residents are waiting expectantly for.
“We cannot tell what will happen, but we trust the government won’t do something bad,” says Abdulrahman.
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