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Saudi Cinemas Herald Regional Transformation

In 1982, ultra-conservative clerics pressured the King of Saudi Arabia to close down all movie theaters, citing the threat they posed to religious and cultural identity. Thirty-five years later, Crown Prince Mohammed bin Salman—the same Crown Prince who recently arrested over 200 influential Saudis and spent a record $450 million on a da Vinci painting—announced that commercial movie theaters would start to re-open as early as 2018. This was much more than a move to appease Saudi cinephiles: re-introducing cinemas is just one part of a multi-faceted plan to overhaul the country’s economy to become less reliant on oil, while encouraging investment from foreign companies. This move, coupled with the ongoing disputes between Qatar and the other Gulf Cooperation Council (GCC) members as well as violence between Saudi Arabia and Yemen—not to mention President Trump’s decision to recognize Jerusalem as the capital of Israel—could fundamentally change the balance of power in the region well before 2030, and potentially spell the end of the GCC.

The GCC was formed in 1981, coincidentally just one year before Saudi Arabia banned all cinemas, with the goals of boosting economic cooperation and guarding against threats from neighboring states. The six members (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) formed a common market as of 2008 and aspired to create a monetary union with a single currency by 2010, though talks have stalled ever since the proposed name for the currency, Khaleeji, was turned down in 2009. Combined, all six countries control 30% of global oil reserves and Saudi Arabia alone controls 16%, the second largest share of known oil reserves in the world. This makes Saudi Arabia the most powerful—and the most conservative—of all six countries in the Council.

The dramatic decline in oil prices in 2014 did not affect Saudi Arabia’s oil-based economy too badly, largely because the country has a deep reserve fund it can draw from during downturns. Even though the Saudi economy weathered the dip without too much difficulty, in early 2016 the Crown Prince launched his “Vision 2030” plan to reduce reliance on oil in the long term and prevent future drops in price from causing economic stress. Under Vision 2030, Saudi Arabia will become an investment powerhouse and global hub for trade and innovation, diversifying the economy while enhancing transparency and accountability.

In order to become a global hub, however, Saudi Arabia will have to become less socially conservative, something the Crown Prince seems to be steadily working towards. The pace of reforms since Crown Prince Salman assumed his position in June 2017 has been dizzying by any standards, but especially for a regime that has been long known for deeply conservative beliefs: in September, just three months after his appointment, the kingdom announced that women would be allowed to drive in less than a year; a month later came the announcement that women would be able to attend sporting events in stadiums; in November over 200 powerful figures were arrested on charges of corruption; and then in December it was announced that theaters would re-open. These are small steps towards a more open society; an era of free speech, equal rights, and transparent government is still a long time away. Economics are the driving factor: foreign investors are hesitant to work with a country with a dubious human rights record, and re-opening theaters will put money that thousands of Saudi’s have been spending in Bahrain and the UAE back into the Kingdom’s coffers and provide new employment opportunities.

As Saudi Arabia continues down this path of economic and social reform, it is undeniable that the balance of power in the region will shift as the long-standing alliance between the GCC countries becomes less relevant and the Kingdom positions itself to become an international trade hub—a position the UAE also covets. Already diplomatic relations between the six are fraught, with the ongoing blockade against Qatar and the early closure of the December meeting of GCC emirs. The Saudi government and the UAE have already announced a separate alliance, distinct from the GCC, focused on military support and facilitating trade, and more bilateral agreements are likely on the horizon as the Crown Prince continues to introduce reforms that alter the fundamentals of Saudi Arabia’s economy and culture. As Saudi Arabia and the other five countries, many of which are also instituting economic reforms, become less reliant on oil revenues, there will be less of an economic reason for the six countries to maintain such close ties. Whether or not this will lead to the dissolution of the GCC remains to be seen, as political and cultural ties may keep the alliance alive, but clearly the region is going through a moment of turmoil and transformation.


Michelle Bovée

Michelle Bovee is a Market Intelligence manager at MAGNA Global, where she focuses on global advertising revenues and media cost trends, particularly in Western and Northern Europe. She graduated from the London School of Economics with a Master's degree in International Relations in 2013 and is currently living in New York City. You can connect with her on Twitter @boveemc.
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