The Economic Limits of Political Visions: The Case of Saudi Arabia: Structural Misassumptions in the Implementation of National Megaprojects
Large-scale projects rarely fail because of a single event. More often, it is a sequence of false assumptions, omissions, and misplaced priorities that accumulates over years before reality becomes impossible to ignore. Saudi Arabia’s Vision 2030 offers a particularly striking example. What began as a confident promise of the future is increasingly turning into a case study of how political ambition, economic dependencies, and structural misjudgments interact. The following chronological error analysis traces the decisions and flawed assumptions that have led Saudi Arabia step by step into its current situation.
Phase 1: The Error of Boundless Overconfidence
At the outset of Vision 2030 lay a fundamental miscalculation: the assumption that financial ambition comes without a price. Buoyed by years of high oil revenues, Saudi leadership developed the conviction that capital would always be available in unlimited supply. This overconfidence led to the systematic underestimation—or outright neglect—of costs, risks, and alternative scenarios. Instead of realistic budget frameworks, superlatives and symbolic scale dominated planning.
Phase 2: Oversized Planning Lacking Economic Grounding
In a second step, this error manifested itself in the very design of the megaprojects. Projects such as NEOM or the Mukaab were conceived from the outset on a scale that left little room for incremental development. Robust feasibility studies, realistic demand forecasts, and clearly defined economic return models were largely absent. International attention took precedence over long-term economic viability.
Phase 3: Continued Dependence on Oil Despite Diversification Rhetoric
Another central mistake lay in the contradiction between ambition and reality. Although Vision 2030 explicitly promoted a move away from oil dependence, the financing of the projects remained, in practice, closely tied to oil prices. When these prices fluctuated and at times declined, it became evident that the new economic strategy was resting on an old, unstable foundation.
Phase 4: Misjudgment of Global Financial Conditions
At the same time, Saudi Arabia underestimated shifts in international financial markets. Many projects were planned during a period of low interest rates and abundant global liquidity. The abrupt transition to an environment of rising interest rates, more cautious investors, and altered risk appetites represented a massive external shock—one for which the projects were unprepared.
Phase 5: Ignored Implementation Risks
Another frequently overlooked error lay in operational execution. Exploding construction costs, limited local skilled labor, technological uncertainties, and logistical challenges in extreme environments were insufficiently accounted for in early planning stages. The complexity of implementing multiple megaprojects simultaneously overwhelmed administrative structures and project management capacities.
Phase 6: Delayed Course Correction
Only when financial constraints became apparent did a cautious reassessment begin. By that point, however, enormous sums had already been committed and political expectations firmly established. The necessary scaling back, delays, or restructuring of projects therefore appeared less like strategic adjustment and more like forced crisis management.
Conclusion: A Chain of Systemic Misjudgments
The current situation is not the result of a single mistake, but of a chronological chain of miscalculations: early-stage hubris, unrealistic planning, continued oil dependence, misjudgment of global financial conditions, and operational blind spots. Vision 2030 has so far not failed due to a lack of political will, but because of the gap between political vision and economic reality. Whether lessons are learned from these mistakes will determine whether the vision is ultimately corrected—or permanently disenchanted.
