UAE and Saudi Arabia: Competition driving GCC growth

The United Arab Emirates (UAE) and Saudi Arabia are two of the largest and most populous nations in the Gulf Cooperation Council (GCC). While enjoying friendly and tight economic relationships, the two countries compete intensely with each other economically, culturally, socially, and in investments. The dynamic competition is intriguing to observe, as it not only spurs progress within their borders, but it also drives growth across the GCC region as a whole.

Even those who do not follow the region’s economic development have probably heard about Burj Khalifa, the world’s tallest building located in the UAE and Saudi’s plans to build an even taller one in Jeddah. Formula One has been hosted in Abu Dhabi since 2007, and Riyadh also started hosting the event in 2021. Dubai has recently hosted Expo 2020, the world’s major exhibition event, and now Saudi is applying to become a host in 2030. Similar races between the two nations also go on in many other domains that are less visible to average consumers, like infrastructure and logistics, technology and innovations, incentives for foreign investors, and living and working conditions for expats or cultural events.  

Burj Khalifa

Tourism settings in the UAE are much more advanced, but now Saudi is investing heavily to catch up with its neighbor by liberalizing its local environment. The country is simplifying visa rules for all nationalities and entry procedures for women, easing religious control over social life, as well as creating new entertainment infrastructures. Ten years ago, a foreign woman traveling to Saudi Arabia without a male companion, like a husband, father, or older brother was a rare exception. Now, women can drive cars, travel alone, and get a quick online e-visa to enter the country, just like men. 

The country’s first cinema opened in 2018, which, before that, was completely banned. Mutawas, the so-called religious police, are almost unseen in public places, while before, they seemed to control everything, telling people how to dress, making sure people prayed at designated times, and enforcing that no unrelated men and women meet each other in private or public. Now, in order to attract more highly skilled foreign individuals to work in the country, the above restrictions, as well as many others, have been abolished. 

Saudi Arabia went even further in 2017, when its government granted citizenship to Robot Sophia, making her the first robot in history to receive citizenship of any country. Though she cannot enjoy all human rights like voting or obtaining a government position, the move was a strong sign from the Saudi government, showing its commitment to modernization and technological innovation, as well as its willingness to embrace artificial intelligence and robotics

Robot Sophia

These measures were aimed mainly at catching up with the UAE, which had adopted quite liberal social rules decades earlier. In recent years, though, the two countries seem to be running very close and adopting many new competitive incentives almost simultaneously.  In 2019, the United Arab Emirates launched the UAE Golden Visa, a program that offers 5- or 10-year residency visas to certain professionals, investors, and entrepreneurs. Furthermore, in 2021, the country introduced a scheme offering citizenship, allowing foreigners to settle in the Emirates permanently. 

Later in 2019, just after the UAE’s Golden Visa, Saudi Arabia announced the Saudi Arabian Green Card (SAGC) program, a renewable residency permit valid for up to 10 years. As of now, the SAGC program is still in its pilot phase, with a limited number of applicants accepted. However, both programs share similar goals of attracting foreign investment and highly skilled professionals to their respective countries.

Attracting foreign investments is also at the core of the competition. For the last two decades, the UAE has been a trendsetter in this field: there are more than 50 free zones that are specific economic areas designated for businesses. They offer foreign investors a range of benefits, including 100% company ownership, zero corporate taxes, and other incentives. That is why many companies doing business in Saudi Arabia often register their regional headquarters in Dubai, which has intensified competition.

Trying to change the status quo in 2021, the Saudi Ministry of Investment adopted a new regulation to oblige companies doing business with the Saudi government to register their regional headquarters in Saudi Arabia starting in 2024. Otherwise, they are only permitted to work with the private sector. This regulation has already pushed many global companies like PepsiCo, Unilever, and Siemens to relocate their regional HQs from other GCC countries with a more established history of regulatory systems that suit foreign business models and lifestyles.

The next field of competition is infrastructure: first-class airports, seaports, and transportation networks. 

Dubai International Airport was ranked the world’s largest airport by international passenger traffic in 2022. This is why, for a long time, the UAE has been an airline leader in the region, a transport hub connecting western and eastern parts of the world, with two major airlines Emirates, one of the largest airlines in the world, and Etihad Airways, as well as three smaller carriers, Flydubai, Air Arabia, and Wizz Air Abu Dhabi

For a long time, Saudi Arabia focused only on developing local and regional flight networks that served mainly the GCC region and neighboring Arab countries. However, in recent years, it set an ambitious goal to catch up with the UAE by making a significant transformation and expanding the network of the national carrier, Saudi Arabian Airlines, launching a new low-cost carrier called Flyadeal in 2016. Saudi Arabia also created one more national airline, Riyadh Air, and hired a former CEO of Etihad Airways for run the new venture..

Another significant part of the competition is port infrastructure, with its roots back in the seventies. Firstly, Saudi Arabia was a leader in this field, with the King Abdul Aziz Port, or Dammam Port, the largest port in the Arab Gulf and the third largest and busiest port in the Middle East and North Africa region. It has been a key center for oil export and petrochemical products from Saudi Arabia to other countries since 1975

In 1979, the UAE opened its own large port, Port Jebel Ali, which is now one of the busiest ports in the world and the largest man-made harbor globally. Operated by DP World, which also became a leading port operator globally, as it functions as a multipurpose port, catering to a wide range of cargo types and also expanding the cruise industry in the region.

Port Jebel Ali

Urban infrastructure is one more point of competition. In 2009, Dubai became the first country in GCC to build a metro. It is a fully automated metro system that has two lines and a total of 49 stations. The Dubai Metro is one of the longest driverless metro systems in the world, and it is known for its modern and sleek design.

In response, in 2014, Saudi Arabia announced its mega-project of a metro system in the capital city of Riyadh. The Riyadh Metro is the first metro system in Saudi Arabia and is considered one of the largest infrastructure projects in the world. The Riyadh Metro will use similar advanced technology and will have six lines (176 km of total length) and 85 stations, two times more than the Dubai Metro. It is still in the final stage of construction and is supposed to open partially in July 2023. 

Dubai Metro

One of the most visible competition points is iconic mega-projects. It is common knowledge that Dubai’s Burj Khalifa, which stands at a towering height of 828 m and boasts 163 floors, currently holds the title of the world’s tallest building. However, Saudi Arabia has set its sights on outdoing this feat with the construction of Jeddah Tower, a mega-project intended to reach a height of over 1,000 m with 160 floors. Work on the tower began in 2013 and was initially scheduled for completion in 2020. However, construction works stopped in 2018, and the project is currently on hold. If completed, Jeddah Tower will be the first building in the world to exceed 1 km in height, surpassing the Burj Khalifa as the world’s tallest building.


Jeddah Tower under construction 

In 2022, a Dubai-based architecture firm proposed a mega-infrastructure project to connect the emirate’s major highways and improve transportation and logistics systems. The project is a giant ring-like structure of 550 m high and a diameter of 3 km around Burj Khalifa, with a diverse range of spaces used to accommodate public, commercial, and cultural programs. Furthermore, the UAE has also announced construction of the Dubai Creek Tower, with a minimum height of 1,300 m, which is set to surpass the height of the Burj Khalifa, as well as its competitor, Jeddah Tower in Saudi Arabia.

Saudi Arabia’s answer to this is the mega-project NEOM City, which is part of Saudi Vision 2030, a plan to diversify the country’s income resources and reduce its reliance on oil. NEOM is a planned futuristic city currently under construction in the northwestern region of Saudi Arabia. The city is being built from scratch and covers an area of more than 25,900 square kilometers, making it about 33 times the size of New York City. NEOM will have regulations and laws, being a hub for innovation, technology, and sustainable living. The city is expected to be finished in 2030.

Both the UAE and Saudi Arabia have competed on a global stage for hosting sports events, including football matches, tennis tournaments, boxing and MMA fights, car racing competitions, and more. 

Football is the most popular sport in both countries. Though their national teams’ levels are still too low to catch up with major European, North and South American teams, the two countries are investing heavily in developing local sports facilities and bringing in global sports stars to raise the popularity of the sports. For many years, the UAE has been signing major world football stars to play on local teams or train them during their last years before retirement. For example, soccer legend Diego Maradona coached the UAE’s Al Wasl FC from 2011 to 2012 for approximately 4.1 mln AED (3.5 mln EUR) per season, and Fabio Cannavaro, former Italian defender played for the UAE’s Al Ahli FC. Aiming to take leadership, Saudi Arabia’s AlNassr recently signed one of the top two global stars, Christiano Ronaldo, for a mind-blowing 200 mln USD per year. Furthermore, there are rumors about another Saudi club planning to sign another top global star, Lionel Messi, for 600 mln USD per year.

The list of competition areas does not end at sports. There are multiple examples of similar projects in energy, consumer markets, e-governance, gender equality, labor laws, etc.  Seeing each other’s developments, the two countries learn and copy the best parts, each time setting the competition bar higher. However, most importantly, this “fierce” competition does not prevent them from being the friendliest of nations, showing love and support to one another, and doing lots of the above projects in a spirit of synergy and collaboration. 


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