Matthew’s view
Since the Iran war ceasefire, Riyadh has settled into an uneasy, new normal. While the Saudi capital escaped the full scale of the Iranian attacks that some other Gulf countries faced, it suffered enough to shake confidence.
Iran hit the US embassy in Riyadh, among other targets, and the threat of more Iranian strikes prompted the evacuation of the capital’s main business hub as a precaution. Working from home and remote learning returned for some for the first time since the pandemic. While most people brushed off the concerns, many expats began considering alternatives to staying in the kingdom.
The April 8 détente between the US and Iran restored something close to normal life. Traffic is back to its usual misery, restaurants are packed, and malls are busy again. Some Saudis lived through the 1991 Gulf War when Iraq fired Scud missiles on Riyadh. This latest conflict — for Saudis — has been nothing in comparison, they tell me.
Yet there’s an undercurrent of concern. The fragility of the truce, a government pullback on some major infrastructure projects, and growing hostility toward foreign workers on social media are combining to dampen the mood.
Unlike other Gulf cities, Riyadh has a large citizen population, meaning there’s always a local labor force to fall back on. Still, the government has made attracting foreign talent a key part of its plan for Riyadh to become a hub for finance, trade, and tourism. The kingdom is pouring money into efforts to make the city more entertaining, easier to get around, and nicer to look at. Restrictions on alcohol and homeownership rules have been loosened.
Until the Iran war, those measures had been succeeding, narrowing the salary premium expatriates demanded to live in the city over neighboring options like Abu Dhabi, Doha, and Dubai. But this uneasy calm won’t be enough to get that momentum back on track; for that, a permanent resolution on Hormuz and Iran will be necessary.
Notable
- The Saudi leadership finds itself “trying to protect and prioritize its own economic and societal transformation, to navigate its relationship with an impulsive and unpredictable U.S. president, and to manage the geographic reality of living a drone’s flight away from a country that is likely to remain its principal antagonist for the foreseeable future,” the Center for Strategic and International Studies wrote.