The thing is Saudi Arabia has tried to diversify its economy many times before... it hasn't gotten it done. They have a huge gut of workers entering the workforce soon and it seems they are they're not educated enough to compete.
A nice man I met from SA noted that education in SA was still heavy on religion, and all his friends aspired to comfortable government jobs that are easy, and pay well, as that has been the place to be for decades.
I'm not sure you can fix that in say 20 years....
It will take generations for this mentality to change (if it ever can..) and by then the oil will have run out.
He told me that for the exact same job if a Kuwaiti (or American (because liberators)) would be paid $100, another white guy would be paid $70, and as an Indian I could expect $30 or so. He told me I could negotiate a bit more because I have a PhD from US but not that much. This would still have been several times what I would make in India. I declined.
Granted I get why people do what they do, but as a whole, it could be disastrous. Much like your expat story, I recall a blog post by someone who went to SA for work. They enjoyed it, but they didn't get why they were even there doing the work as the people they reported to seemed to do little to nothing and could have ... just done their job, but at the same time they weren't sure those people could do that job, or much at all :(
I can confirm this from a second-hand account as told by one of my best friends. He worked as a sub-contractor in Saudi Arabia for a couple of years for a big European air/defense firm and he told me that the technical education of his Saudi colleagues was sub-par, to put it mildly, mostly because they were still taught the Quran during engineering school.
https://techcrunch.com/2017/08/09/how-softbanks-100b-fund-is...
That's a lot of money even for SA. ($100B is a nice round number, approximately equal to the amount they would raise in the IPO, the amount they "extracted" during their corruption drive, and the amount of Softbank's total fund.)