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UAE and Saudi Arabia: Competition driving GCC growth

Writer's picture: Konstantin GridinKonstantin Gridin

UAE, Dubai skyline sunset
Dubai skyline at sunset

The UAE vs Saudi Arabia: competition driving the GCC growth


The United Arab Emirates (UAE) and Saudi Arabia remain the two largest and most economically influential nations in the Gulf Cooperation Council (GCC). While their economies are closely intertwined, they continue to engage in intense competition across various sectors. This rivalry has only intensified in recent years, driving significant economic growth and development within both nations and benefiting the GCC region as a whole.


Even those who do not closely follow economic developments in the region are aware of the visible competition between the two countries. The UAE's Burj Khalifa remains the world’s tallest building, but Saudi Arabia has recently resumed construction on Jeddah Tower, which is set to surpass it upon completion. In motorsports, Saudi Arabia has expanded its Formula One presence with races in Jeddah and Riyadh, complementing Abu Dhabi’s long-standing Grand Prix. Dubai successfully hosted Expo 2020, and Saudi Arabia is preparing to host Expo 2030, positioning itself as a global destination. This competitive dynamic extends into less visible but equally important sectors such as infrastructure, logistics, technology, foreign investment incentives, and cultural development.


Who will become the GCC’s main tourist destination by 2030?


The UAE continues to lead in tourism, but Saudi Arabia is aggressively expanding its tourism sector. The introduction of simplified visa policies and relaxed social restrictions has led to a record influx of tourists. In 2024, Saudi Arabia welcomed a record number of 30 million international visitors, largely driven by the newly introduced e-visa and a more open social environment. Women now enjoy significantly expanded freedoms, including the ability to travel independently and participate in various professions, marking a radical shift from a decade ago. Riyadh’s Vision 2030 continues to push reforms that align with global tourism trends, including the launch of the Red Sea Project and Qiddiya entertainment city, aimed at positioning the country as a major leisure and entertainment hub.


Foreign Investment and Headquarters Competition


The UAE has long been a leader in foreign investment, with Dubai alone attracting over $12 billion in FDI in 2023. However, Saudi Arabia has stepped up efforts to shift regional headquarters to Riyadh. The Saudi Regional Headquarters Program, which became mandatory in 2024 for companies doing business with the Saudi government, has led over 550 multinational companies, including PepsiCo, Unilever, and Siemens, Google, Microsoft, Apple to relocate their regional headquarters to Riyadh. This shift signals Saudi Arabia’s aggressive push to establish itself as the leading business hub in the Gulf.


Both countries have made significant strides in attracting foreign investments. The UAE’s Golden Visa program, which grants long-term residency to skilled professionals, entrepreneurs, and investors, has been a massive success, with over 150,000 visas issued by 2024. In response, Saudi Arabia expanded its Premium Residency (Green Card) Program, now offering permanent and renewable residency options. 


Infrastructure


Dubai International Airport continues to dominate global passenger traffic, handling over 86 million passengers in 2023, making it the busiest international airport. However, Saudi Arabia has responded by expanding its aviation sector with the launch of Riyadh Air, a new national airline aimed at competing with Emirates and Qatar Airways, and one more low-cost carrier Flyadeal, set to compete with FlyDubai, AirArabia and other affordable airline companies. Additionally, the King Salman International Airport in Riyadh, announced in 2022, is expected to be one of the largest airports globally, with a projected annual capacity of 120 million passengers by 2030.


The UAE’s Jebel Ali Port remains one of the busiest global trade hubs, handling 15.7 million TEUs (twenty-foot equivalent units) in 2023. Meanwhile, Saudi Arabia is investing heavily in its King Abdul Aziz Port in Dammam, which handled 2.3 million TEUs in 2023, aiming to expand its logistics capabilities and reduce dependence on UAE ports. Saudi Arabia has also launched the Global Supply Chain Resilience Initiative (GSCRI) to attract supply chain investments and compete with the UAE’s logistics dominance.


Saudi Arabia’s NEOM City continues to be one of the most ambitious urban projects globally. The UAE, in response, has launched Dubai Urban Master Plan 2040, focusing on sustainability and smart city infrastructure. Additionally, work has resumed on the Dubai Creek Tower, which, at a planned height of 1,300 meters, aims to reclaim the title of the world’s tallest tower from Saudi Arabia’s Jeddah Tower.


Sports Investments and Global Influence


Saudi Arabia has significantly expanded its investments in global sports. The acquisition of Cristiano Ronaldo, Karim Benzema, and Neymar by Saudi clubs in the past two years highlights its ambition to turn the Saudi Pro League into one of the world’s premier football leagues. The UAE remains competitive, hosting major international sporting events and investing in global sports franchises. Additionally, both nations have made high-profile bids to host the FIFA World Cup, with Saudi Arabia recently securing the rights to host the 2034 FIFA World Cup.


The Future of Competition


While the competition between the UAE and Saudi Arabia remains intense, it continues to be a driving force behind the transformation of the GCC. As both nations push the boundaries in tourism, infrastructure, business, and sports, their rivalry is reshaping the region’s economic landscape. Rather than creating friction, this competition fosters innovation and accelerates development, ensuring that both countries remain at the forefront of global progress in the coming years.

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© 2024 Vision Business Development

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