×

Saudi Arabia promises a return to 'moderate Islam'

  • Speaking at Riyadh's Future Investment Initiative conference on Tuesday, Saudi Arabia's crown prince said he would be prepared to "destroy" extremist ideologies in order to put the country in unison with other nations around the world
  • The crown prince is currently undertaking the mammoth task of rapidly transforming Saudi Arabia's economy
  • On Tuesday, Saudi Arabia announced a $500 billion plan to build a business and industrial zone that links with Jordan and Egypt

Saudi Arabia's Crown Prince Mohammed bin Salman, has promised a return to "a more moderate Islam," as the Kingdom continues to push ahead with sweeping cultural and economic reforms.

Speaking at Riyadh's Future Investment Initiative conference on Tuesday, Saudi Arabia's crown prince said he would be prepared to "destroy" extremist ideologies in order to put the country in unison with other nations around the world.

"In all honesty, we will not spend 30 years of our lives dealing with extremist ideologies. We will destroy them today and immediately," he said.

"Saudi was not like this before 1979. Saudi Arabia and the entire region went through a revival after 1979 … All we are doing is going back to what we were: a moderate Islam that is open to all religions and to the world and to all traditions and people," he said.

'We will obliterate the remnants of extremism'

The crown prince's reference to 1979 was likely a nod to a tumultuous year for the country, in which Riyadh jostled with Iran for leadership of the Islamic world. Saudi Arabia's Shiite minority also staged a deadly revolt in Al-Hasa province that same year.

In response, the Saudi monarchy strengthened ties with the Wahhabi religious establishment and restored many of its hardline stances. Wahhabism is a form of Islam which emphasizes the absolute sovereignty of God, bans the mixing of sexes in public and places numerous restrictions on women.

In 2015, King Salman bin Abdulaziz Al-Saud – alongside bin Salman – sought to introduce a new age of Saudi politics. And in June, the king promoted bin Salman to crown prince, making him heir apparent.

The two have cracked down on religious incitement, sanctioned the first music concerts in decades and gradually granted women a growing number of rights — including the right to drive, which is set to take effect in 2018.

Saudi activist Manal Al Sharif, who now lives in Dubai, flashes the sign for victory as she drives her car in the Gulf Emirate city on October 22, 2013, in solidarity with Saudi women preparing to take to the wheel on October 26, defying the Saudi authorities, to campaign women's right to drive in Saudi Arabia.
MARWAN NAAMANI | AFP | Getty Images
Saudi activist Manal Al Sharif, who now lives in Dubai, flashes the sign for victory as she drives her car in the Gulf Emirate city on October 22, 2013, in solidarity with Saudi women preparing to take to the wheel on October 26, defying the Saudi authorities, to campaign women's right to drive in Saudi Arabia.

"Some clear steps were taken recently and I believe we will obliterate the remnants of extremism very soon," bin Salman said.

Watchdog groups, including Amnesty International and Human Rights Watch, have reported in recent months that the Saudi Kingdom still has a long way to go in order to modernize.

Vision 2030

The crown prince is currently undertaking the mammoth task of rapidly transforming Saudi Arabia's economy. The Kingdom aims to raise about $100 billion by taking a portion of its state oil giant Saudi Aramco public next year. The funds will underwrite an effort to diversify the nation's economy through a plan called Vision 2030.

The precipitous drop of oil prices from more than $100 a barrel in 2014 to roughly $55 to date has hastened Saudi Arabia's transition from a petrostate to a Gulf nation built on a broader range of industries.

'Now is the time' for economic and financial reforms

At present, oil reportedly employs around 70 percent of Saudi Arabia's population — both directly and indirectly. And Saudi citizens pay no taxes while receiving free education, free health care, and subsidies for most utilities.

In 2015, the International Monetary Fund (IMF) projected the Saudi economy would run out of financial reserves by 2020.

However, in contrast to the IMF's forecast, Saudi Arabia said in a statement Wednesday that it has ambitions of increasing its Public Investment Fund (PIF) to 1.5 trillion riyals ($400 billion) over the same period.

Saudi Crown Prince Mohammed bin Salman attends the Future Investment Initiative (FII) conference in Riyadh, on October 24, 2017.
FAYEZ NURELDINE | AFP | Getty Images
Saudi Crown Prince Mohammed bin Salman attends the Future Investment Initiative (FII) conference in Riyadh, on October 24, 2017.

The Kingdom's main sovereign wealth fund currently has around $230 billion worth of assets under management, though it is poised to receive proceeds from the initial public offering (IPO) of the world's largest oil company next year.

Saudi Arabia's PIF aims to create 20,000 direct domestic jobs and 256,000 construction jobs by 2020.

When asked whether the so-called "Davos in the desert" conference this week felt like a watershed moment for Riyadh, Altaf Kassam, head of research and strategy at State Street Global Advisors, told CNBC the conference was being touted as a "coming out party for Saudi Arabia's capital markets."

"It does feel like they have done a lot of work in the background, they've had the change of succession and now is really the time to start rolling out the major economic and financial reforms," he said Wednesday.

What else has happened at the conference?

On Tuesday, Saudi Arabia announced a $500 billion plan to build a business and industrial zone that links with Jordan and Egypt. The 26,500 square kilometer (10,230 square mile) zone, known as NEOM, is set to focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment.

Riyadh is cutting red tape and removing barriers to investment; on Sunday, it said it would let strategic foreign investors own more than 10 percent of listed Saudi companies.

Earlier in the week, Saudi Aramco's Chief Executive Amin Nasser told CNBC the state oil giant remained on track to take a portion of its business public next year.

The IPO for roughly 5 percent of the company is widely expected to be the largest in history. Saudi officials have said Aramco could attract a $2 trillion valuation, though others forecast the offering will value the company at $1 trillion to $1.5 trillion. In any case, investment banks tapped to handle the transaction stand to reap a huge windfall.

— CNBC's Tom DiChristopher and Reuters contributed to this report.

Latest Special Reports

  • Get inspired by My Success Story which profiles how people achieve their financial goals.

  • A globe-trotting look at the world of investing, from developed Europe and Asia trends to the least-traveled frontier markets.

  • High-end travel companies are pulling out all the stops to cash in on top clients.