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Riyadh, the capital of Saudi Arabia, has been selected to host the 2030 World Expo, beating out Rome, Italy, and Busan, Korea.

The narrative widely presented in the Korean media is that Busan’s bid was drowned out by Saudi “oil money.” But was that actually the case?

After all, it was Korea that won bids for the Olympics and the World Cup at a time when its economy was much weaker than at present.

In a press conference, Saudi Foreign Minister Prince Faisal bin Farhan Al Saud explained that the Saudi team had focused on listening to its partners, understanding what was expected for the expo, and figuring out what needed to be communicated to win trust.

As the Saudi foreign minister said, Riyadh’s successful expo bid may be an expression of the international community’s confidence in Saudi Arabia. Clearly, the Saudis’ bold ambition of stepping forward into a post-oil era (as expressed in “Saudi Vision 2030”) has struck a nerve.

In its analysis of Riyadh’s successful campaign, US-based digital newspaper Politico concluded that the main reason the Saudis had gotten so many votes was because they had aggressively offered “investment opportunities” to member states of the Bureau International des Expositions.

The Italians have grumbled that Saudi Arabia made economic offers to each member state in exchange for its vote. But the vision presented by the Saudis was an expo “built by the world for the world.”

That’s not the same as dangling incentives paid for by petrodollars. Instead, the Saudis’ offer to invest and have a chance to make some money is what made the difference with other countries.

A sophisticated strategy that earned France’s support

The awkward thing about saying that Saudi Arabia bought votes with oil money is that Korea’s economy and government budget are both bigger than those of Saudi Arabia. The International Monetary Foundation projected last month that Saudi Arabia’s real gross domestic product (GDP) for the year will be US$2.25 trillion, less than the IMF’s projection for Korea of US$3.1 trillion. The Saudi budget for the year is around US$297 billion, just over half of Korea’s budget of 640 trillion won (around US$495 billion).

Saudi Arabia has way less money than one might think, and Riyadh is nearly always running a budget deficit. Last year was an exception, but that budget surplus was largely the result of high oil prices because of the war in Ukraine.

Oil prices have fallen this year, forcing Saudi Arabia to cut oil production. Riyadh is unable to cut spending on ongoing large-scale infrastructure projects, which has put its budget back into the red this year. The Saudi Ministry of Finance estimated that this year’s budget deficit will amount to 2% of GDP.

Saudi Arabia has plenty of its own problems to deal with, including lax discipline in the royal family, corruption, overdependence on bureaucracy, and a society stymied by backward technology. Nevertheless, there are undeniable signs of change, and that has helped the Saudis boost their reputation.

That change has gone into overdrive since Crown Prince Mohammed bin Salman Al Saud became the power behind the throne in 2017. Just five years ago, for example, foreign tourists weren’t let into the country, and women weren’t allowed to drive. But now Saudi Arabia is trying to build an automobile industry.

Saudi Arabia’s sovereign wealth fund, known as the Public Investment Fund, is worth US$700 billion. But that doesn’t mean the Saudis are spending their oil money hand over fist.

The Saudis are building a factory with Hyundai Motor Company, and 70% of the joint venture will be owned by the sovereign wealth fund while the remaining 30% will be owned by Hyundai. Who’ll front the money for building the production line? The sovereign wealth fund, but with money “borrowed” from Korea.

The fund agreed to receive up to US$5 billion in term loans (installment plans) from a financial syndicate backed by the Korea Trade Insurance Corporation (K-SURE) on Nov. 28.

Saudi’s “investment proposals” to various countries generally follow this equation: bring your own money, build a factory, and reap the profits.

Saudi Arabia has been trying to diversify its economy since 1970, when it launched its first five-year plan for economic development. Over the next three decades, little progress was made.

In the 2000s, economic drivers emerged from outside factors. After the Iraq War, high oil prices and Chinese demand for oil became the pillars for the kingdom’s growth. After being admitted to the World Trade Organization in 2005, the country generally began to catch up with global standards.

The foreign investment climate improved, infrastructure increased, and the financial system improved. In 2016, the country kicked off its energy transition project in earnest, and, this time, with tangible results.

The oil sector’s share of gross domestic product has fallen from the 40%-50% range in the mid-2000s to the 20%-30% range since 2017.

The outside world’s skepticism has also phased out. Crown Prince Mohammed bin Salman stated that Saudi Arabia has become “an ideal destination for hosting prominent global events, such as the World Expo.”

During the 2022 World Cup in Qatar, while the Western media was busy bashing the country for labor issues, Qatar delivered an event that far exceeded the world’s expectations. Dubai hosted the World Expo in 2021, and in 2023, the city welcomed guests to the COP28 climate talks. Saudi Arabia hopes the expo will bring 40 million people to Riyadh. Now, it is almost certain that the 2034 World Cup will be held in the country, and it is also setting its eyes on the Olympics.

The diplomacy war over the 2030 World Expo is a testament to how far the kingdom has come. It wasn't long ago that Europe reacted poorly to the idea of the event being hosted by a country criticized for its human rights record.

The decisive turnaround was French President Emmanuel Macron’s declaration of support for Saudi Arabia. Eager to grow his influence in the Middle East, Macron sought to improve relations with the Saudis, and the leaders of those two countries have since become closer.

French companies are also targeting the Saudi market. When the crown prince visited Paris in June 2023, Airbus wanted to sign a huge contract with Riyadh Air, but the deal fell through. The Saudis, however, played hard to get by weighing whether to buy France’s Rafale fighter jets. This seems to be an attempt to sway Germany, which is opposed to the sale of Eurofighter Typhoon fighter jets to Saudi Arabia, citing human rights concerns, by putting France in the middle.

PSY, BTS, and Squid Game

Unfortunately for Busan, Saudi Arabia was miles ahead of the Korean city even when it came to the campaign. During a June visit to France, Crown Prince Mohammed brought a large entourage to the exhibition grounds next to the Eiffel Tower, where he met for two hours with officials from the Bureau International des Expositions and representatives of other countries.

He chatted with the French foreign minister as well as the economist Jacques Attali, a Lebanese immigrant, therefore highlighting his image as an intelligent, open-minded statesman.

On the advice of a French public relations firm, he threw a big party and entertained the African ambassadors with a surprise appearance by soccer star Didier Drogba, a native of the Ivory Coast.

The New York Times noted that over the course of the year, the kingdom discussed investments and established diplomatic ties with countries with which it had no previous ties. A Saudi delegation visited Colombia in May and promised to open an embassy, prompting Colombia to back Riyadh in its bid for the expo. The first summit between Saudi Arabia and Caribbean countries, held last month, was also notable.

On the other hand, South Korea’s campaign, which has involved the president and a number of ministers, received less coverage in the foreign media.

“K-pop celebrities PSY and BTS flew the flag for Busan. South Korean President Yoon Suk-yeol traveled to Paris for a final campaign effort escorted by top executives from South Korean tech giants including Samsung or LG,” Politico reported.

The New York Times noted that South Korea had “gone all out to promote its bid [. . .] appointing the K-pop band BTS as its ambassador, along with celebrities like the ‘Squid Game’ star Lee Jung-jae.”

In its promotional videos, Saudi Arabia focused on futuristic megaprojects like Neom. Its portrayal of Saudi Arabia as a “beacon of progress, innovation, and sustainability,” may have made many of its harsh critics chuckle. But the message may have been more effective than the one propagated by Rome, which involved actor Russell Crowe dressed as a gladiator, or Busan, where Psy and BTS were constantly invoked

Can South Korea’s loss to Saudi Arabia at a time when Korean culture is taking the world by storm be attributed to technical reasons? Perhaps the more fundamental issue of national vision and lack thereof is to blame.

By Koo Jeong-eun, international affairs journalist

Please direct questions or comments to [english@hani.co.kr]