Leadership challenges at the core of the new Middle Eastern economic visions

When building visionary economies, leaders must work on bridging the gap between technical development and social reforms, say smart cities experts Gustavo Bermejo and Carlos R. Monroy

This article is available in Arabic.

In a post-pandemic world scenario, where the vast majority of economies suffered a decline in their GDP in 2020, and have only recently started to recover, a lot of questions arise as to how the new times of economic recovery, political life, and social interactions will look like.

The overall recovery prospects are good. According to the IMF report of October 2021, world economic growth was at 5.9% by end of 2021, while that corresponding to 2022 remains at 4.9%. The handicap is that this recovery takes place in a context of increased uncertainty and more complex trade-offs when choosing the policies to apply. Against this background, it is worth wondering about leaders’ role in determining the way forward and their vision of where to lead their respective societies.

A particularly interesting case of the above is that of the Middle Eastern countries, especially those of the Persian Gulf, Saudi Arabia, Kuwait, UAE, Qatar, and Oman. They are part of the oil-exporting countries, so their impact on the global economy is very high. In addition, many of them had initiated economic diversification processes before the pandemic, and their leaders had developed visions about where they wanted to lead their respective countries. According to the IMF, the outlook for oil-exporting countries globally is good for 2021 (growth of 4.5%) and 2022 (growth of 3.9%), with positive current account balances and practically non-existent unemployment rates. And within these forecasts, those that present the best prospects are those corresponding to the Persian Gulf countries. How does their post-COVID vision look like, compared to what was established pre-pandemic? And more importantly, what should be the role of the leaders of these countries in this new context?

Take the case of Saudi Arabia. This country had formulated its strategy in the “Saudi Arabia’s Vision 2030” (plan for the future). Its impact on Muslim civilization is significant, as it is at the crossroads of three continents: Africa, Asia, and Europe. Moreover, it constitutes a primary hub for religious tourism, a sector that accounted for 8 million visitors in the years before the pandemic. Accordingly, their vision and the way they plan their development are a showcase and have a great influence on other Middle Eastern countries.

The vision of where society must go is vital as an element of leaders’ role before the citizenry. Articulating it in projects and axes contained in a strategic plan is a formal way of transmitting it to society, as done in the “Saudi Arabia’s Vision 2030”.

The country leaders have opted for a nationwide growth “which the steady development of their infrastructure has accompanied.” But at the same time, they aim to enhance the quality of life for all and meet their citizens’ needs and requirements. For this, they want to develop “high-quality services and open and landscaped areas, to meet the recreational needs of individuals and families.” Combining economic growth with citizens’ well-being and preserving their environment is a challenge for leaders due to the tension and conflicting interests between these three factors. To achieve a balance between them and the model’s sustainability, leaders should rely on the facilitating role of technology and on citizens’ active involvement (engagement) in the actions to be developed.

One of the objectives of this plan is to deploy infrastructures focused on making cities grow towards a smarter model that can enable “to have three Saudi cities recognized in the top-ranked 100 cities in the world”. For this purpose, the leaders are committed to building smart cities, where technology plays a key role. The challenge, though, is to determine to which extent technology can shape smart cities and what the limits are. At the same time, it is crucial to tackle the issue from a social perspective and see how far citizens are willing to go to incorporate advanced technologies in their day-to-day life. Resistance could arise in the face of technology itself, but also when it comes to data privacy. And this, in return, has a direct impact on data-based decision making. At the end of the day, the whole concept of smart cities revolves around a continuous enhancement of the services provided to citizens. And to be able to do this,  leaders must adequately use data provided by sensorization and the IoT (Internet-of-Things).

In an interview with the Spanish news agency EFE South Korean philosopher Byung Chul-Han suggested that “Covid-19 has reduced us to a society of survival that loses all sense of the good life”, one where “enjoyment is also sacrificed for health.” In his latest book “Non-things: Upheaval in the Lifeworld, Chul-Han states that “the terrestrial order is giving way to a digital order; a world of non-things is replacing the world of things”. Faced with smart cities’ development, we should pave the way for the “Smart Citizen” as an alternative or complementary model. This means that at any point, technology should never be prioritized over the human – as its very existence should solely be for the improvement of lives as opposed to posing a great, a challenge, or a detriment.

The technology that sustains smart cities, ICTs, telecommunications infrastructure, especially high-speed broadband, sensorization, IoT systems, and their evolution to IoB (Internet-of-Behavior), Blockchain technology, Artificial Intelligence, and Machine Learning is already being incorporated into the reality of cities. How citizens will react to the diffusion of such technology is yet to be determined. In the new post-pandemic context, will the new digital services be promoted further to delve into physical and social distancing? Or, on the contrary, will citizens present a greater preference for physical contact in open and landscaped areas, that is, in a natural environment without the dominant presence of technology?

To date, the leaders of the Gulf countries have opted to develop three different types of smart cities, with varying degrees of incorporation of technology and sustainability. These can be seen represented in the examples of three projects, “Msheireb Downtown,” “Education City,” and “Masdar City.” The first two are based in Qatar and the last one in Abu Dhabi (UAE). The first is an example of a purely economic smart city model; the second is an “education and research city” model; the third is a “green city.” In these three models, we miss a more holistic way of thinking about the city model itself, in which sustainability addresses several factors, as opposed to being the focus of a single theme. Citizen engagement is also missed as the objective of the plans and policies to be carried out.

This holistic vision of the leaders should translate into using technology as facilitators and integrators of the Sustainable Development Goals (SDGs) in the city. This will enable the development of an alternative economy and will diversify the risks associated with fluctuations in the price of oil. It would ensure the sustainability of the model’s financing and how it is planned to be implemented. But for this, it is necessary to count on the active involvement of citizens, since they influence the outcome of these policies through their consumption patterns, their participation in new forms of innovation and business models (for example, through “open innovation”) so necessary in these new smart cities. On the other hand, if rapid economic development is to be achieved, new business and social leaders must be promoted to foster a greater proportion of the private economy compared to the current weight of the public economy (currently around 60% of GDP). Therefore, current leaders’ role in searching for, identifying, and developing new leaders among the population seems to us of utmost importance.

In summary, one of the leaders’ main tasks is to appropriately choose the balance between using technology to improve citizens’ lives and using other types of more social strategies, which seek citizen engagement in the plans to be implemented. This engagement is achieved by providing more outstanding education about the challenges facing society and making them consider citizens’ values ​​and attitudes towards them. Without these three pillars, citizen involvement may not happen and will most certainly hinder achieving the vision. This is a risk leaders must avoid at all costs, if they wish to promote sustainability for the sake of better futures ahead.


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Gustavo Bermejo and Carlos R. Monroy

Gustavo Bermejo-Martín is a mentor in entrepreneurship and innovation programs in Headspring, IE Business School, Go2Space-HUBs Madrid, and Healthstart Madrid. He holds a Ph.D. degree (Cum Laude) in Industrial Management from the Technical University of Madrid (UPM) and degrees in Telecommunication Engineering (UPM) and Executive MBA from IE Business School.
He is a visiting scholar on innovation and business development at Universidad Autónoma and Universidad Alcalá de Henares in Madrid, Spain. He belongs to the Food Quality Engineering research group at UPM, with published papers in scientific journals. He is a member of smart city and sustainability research groups.

Carlos Rodríguez-Monroy is a professor of International Business at King Juan Carlos University. He has taught Corporate Strategy, Entrepreneurship, and Corporate Governance at the Technical University of Madrid (UPM).
He holds a Ph.D. degree in Industrial Management from UPM and degrees in Economics, Sociology, and Law from Universidad Complutense de Madrid. He has been Academic Director of CESMA Business School and visiting scholar at IMT Atlantique in Nantes, France, and the University of Connecticut in the USA.
He is a doctoral theses director, academic editor, and reviewer of scientific journals. He heads the Food Quality Engineering research group at UPM, focusing on the food-energy-water nexus.