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Saudi Arabia’s Move to Join BRICS Grants it Greater Economic Expansion

A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
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Saudi Arabia’s Move to Join BRICS Grants it Greater Economic Expansion

A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)

Economic analysts have emphasized that Saudi Arabia’s expected move to join the BRICS group as an observer will grant the Kingdom the ability to participate in some of its economic activities.

The group is expected to meet in August.

This move is also expected to strengthen Saudi Arabia’s trade and economic relationships while reaffirming its commitment to global economic openness and the prudent management of economic ties.

Dr. Mohammed Makni, a finance and investment professor at Imam Mohammad Ibn Saud Islamic University in Saudi Arabia, told Asharq Al-Awsat that since its inception, the BRICS group has sought to shift economic power from a single to multiple directions.

The bloc is significant for comprising around 41% of the world's population and 29% of the world’s land area. Additionally, its members are part of the G20, representing the world’s largest 20 growing economies.

Makni further added that Saudi Arabia’s inclusion will open new paths and significant opportunities for the Kingdom’s economy and the Gulf markets, leading to expansion and increased global economic stability.

Saudi Arabia will also play a crucial role among the group’s nations, particularly in the trade of oil and gas, which constitutes 30% of the Kingdom's exports to global markets.

Makni also added that Saudi Arabia is open to all, and its policies are not limited to a Western-oriented approach.

He pointed out that the country had joined the Shanghai Cooperation Organization for Economic and Security Cooperation in March 2022.

This move, Makni emphasized, will not affect the strong relations between Riyadh and Washington, as well as other Western countries.

It serves to affirm the strength and resilience of the Saudi economy and the Kingdom’s capability and wisdom in managing its relationships with various nations while maintaining a balance of interests to achieve the strategic goals of Vision 2030.

Moreover, Makni emphasized that this membership will infuse a new vitality into the economies of the member states amid the ongoing global economic crises and reshaping of economic powers.

It will also create opportunities for the BRICS nations to enter the markets of the Gulf region, especially given the urgent need for the two largest economies in the group, China and India, to access Gulf energy markets in order to sustain growth and move towards global economic leadership.

The BRICS group is a global economic bloc comprising the countries of Brazil, Russia, India, China, and South Africa. BRICS is an acronym derived from the initial letters of these nations’ names.

Currently, South Africa is chairing the group, and it will host the 15th summit of the bloc from August 22 to 24.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.