In the Clingendael and CARPO report “Drivers and strategic puzzles of Saudi modernization“, the authors analyze the ongoing challenges and opportunities of Saudi Arabia’s current socio-economic transformation. The envisaged transformation is fully in line with the vested interests of the Saudi monarchy and much of the business elite, as well as some of the country’s younger generations. Despite promising potential for mid- and long-term progress in privatization, investments, job creation and social change, the modernization agenda’s lack of participatory governance modalities, insufficient attention to climate change mitigation and absence of a balanced strategy to promote regional stability represent serious medium-term challenges.

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Yemen’s microfinance sector is undergoing a radical transformation. Despite initial success in empowering small businesses, the ongoing conflict has exposed deep vulnerabilities. Competition between the fractured central banks has driven a surge in microfinance bank (MFB) licenses. While this promises to expand financial inclusion, it raises serious concerns about long-term sustainability and financial stability. To ensure a sustainable future for the sector, a collaborative effort is needed from the CBY, MFBs, and international donors. This RYE Policy Brief brings forward practical recommendations to this effect.

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by Sina Winkel and Sebastian Sons

Cities generate 75% of global CO₂ emissions from energy use, with rapid urbanization projected in West Asia and the Arabian Peninsula, particularly in the GCC countries. Urbanization poses challenges like housing shortages, congestion, pollution and inefficient public transport. In response, GCC countries are developing smart cities, such as Saudi Arabia’s NEOM and the UAE’s Masdar City, aiming for high quality of life and economic growth. However, these projects face issues like social inequalities, infrastructure deficits and environmental impacts. Despite technological advances, obstacles to sustainable development persist. The authors of this CARPO Report argue that regional cooperation is crucial to addressing these challenges and fostering sustainable urban growth through initiatives that emphasize cultural heritage, environmental education and community engagement, promoting socio-economic and environmental resilience. 

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