On the eve of the historic meeting in Washington between President Trump and HRH Crown Prince Mohammed bin Salman, I reflect on the great progress in Saudi Arabia under MBS’ leadership and the opportunities of Saudi Arabia to benefit from the “Texas Miracle”. Texas is the only region in the World that has successfully evolved from an oil dependent economy to a much larger fully diversified economy. Energy-rich regions can leverage innovation, investment, and entrepreneurship to secure long-term stability as we have witnessed in Texas. Saudi Arabia is in a similar situation to Texas where the Saudi economy has changed from primarily oil to a more expanded economic version under the government’s Vision 2030 diversification plan. Saudi Arabia has the largest economy in the Middle East and continues to be one of the premier oil producing nations in the world. The nation recognized the need to use oil as the primary export, while using resources to expand into different ways to create economic growth and job creation.
One does not need to be an economist to recognize that diversified economies are more durable than ones that rely on a single export. The United States is a great example of a Nation that is currently adapting to a new global reset. President Donald J. Trump’s tariffs serve to put other nations on notice that they are not allowed to use protectionism and non-tariff barriers to stop American produced goods from being available to foreign consumers. The American diversification is under way and other nations are following our lead.
Texas is the top state for crude oil and natural gas production. In the 80s and 90s, the State sought to expand entrepreneurship in the areas of information technology, aerospace and manufacturing. The Dallas Federal Reserve studied the State and concluded, “Texas remains unique. If Texas, an energy powerhouse, were a Country, it would rank third globally in crude oil and in natural gas production. Also dominant in downstream energy, Texas produces 30 percent of the nation’s gasoline and 75 percent of its petrochemicals. Texas also rules renewables.” A downturn in oil prices a decade ago led to a “huge shift from oil production and construction jobs toward services industries. The change signaled sustained growth of professional and business services, particularly within scientific and technical sectors.” This example mirrors what is happening in oil rich nations that have become reliant on the price of oil worldwide. The lessons of the “Texas Miracle” include 1.) Pro business and investment policies, 2.) Education reforms, 3.) Low taxes, 4.) Attracting in-migration of workers, 5.) Attracting companies to move to the State, and 6.) Attracting capital from other regions.
Saudi Arabia has recognized that the need for diversification to keep up with other nations advancements toward long term economic stability. Bentley University hosted an event with Ryadh bin Mohammed Alkhareif, Deputy Chair of the International Monetary and Financial Committee at the International Monetary Fund (IMF) on March 13, 2025, where he explained, “when you look at economic diversification, historically the Saudi economy relied heavily on one source. Now we have put a lot of emphasis to diversify the economy towards non-oil activities,” including tourism, entertainment and renewable energy. This mirrors efforts in Texas,
Saudi Arabia’s Vision 2030 plan has helped the economy of that Nation deal with lowering prices for global oil. Reuters reported on June 26, 2025, “under the program, Saudi Arabia has invested heavily in sports, tourism, and entertainment in recent years.” IMF concluded that as a result of this plan “government spending and domestic demand are expected to fuel growth despite lower oil prices.” The projects include the hosting of large international events that will lead to more construction and development projects including hosting the 2029 Asian Winter Games and the 2034 World Cup.
The similarities between the Texas and Saudi Arabian model are strong. While both Texas and Saudi Arabia both rely on oil as an export, they have found ways to expand their respective economies into different sectors to protect against downturns in oil prices. They both have also put their economies in a favorable spot while the world changes and demand for products and services shifts dramatically. Saudi Arabia should be applauded, and the United States should support that nations efforts to diversify in an effort to link up our two great economies into a strong economic alliance that can survive shifts in world demand for new innovative products and services.
Arthur Hollingsworth is Managing Partner of LoneStar Investment Advisors. A direct descendant of Alexander Hamilton, Mr. Hollingsworth serves as President of the Alexander Hamilton Scholars Board of Directors (www.hamiltonscholars.org).
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