Kingdom unveils ambitious $7tr plan to enter 15 top global economies
On Monday, Crown Prince Mohammed Bin Salman unveiled a plan to make Saudi Arabia one of the top 15 economies of the world by 2030, with the Kingdom to receive set to receive funds for government spending and investment estimated to be worth SAR 27 trillion (USD 7 trillion).
The Saudi National Investment Strategy (NIS) targets critical sectors such as manufacturing, renewable energy, transport, logistics, tourism, digital infrastructure, and healthcare, according to a statement published in Arab News. The strategy aims to contribute to the growth of the national economy while also diversifying its sources, enabling it to achieve several key goals of the Kingdom’s Vision 2030 program.
According to the Saudi Press Agency (SPA), the Kingdom will invest over SAR 12 trillion (USD 3.2 trillion) by 2030, SAR 10 trillion through government spending, and SAR 15 trillion from private consumption over the next ten years.
Out of the SAR 12 trillion, the Shareek program initiatives will inject SAR 5 trillion. The Public Investment Fund also plans to contribute SAR 3 trillion. The remaining SAR 4 trillion will come from investments facilitated by the NIS.
The NIS and Vision 2030
The NIS also complements the investment strategies of several Vision Realization Programs such as the Public Investment Fund (PIF), the National Industrial Development and Logistics Program (NIDLP), the Privatization Program, the Financial Sector Development Program, the Quality of Life program, and other vital programs dedicated to achieving Vision 2030 goals.
Speaking on the launch occasion, Crown Prince Mohammad Bin Salman said that the Kingdom was embarking on a “new investment era” to empower Saudi and international private-sector investors with “more and better opportunities.”
“Investment is without a doubt one of the main routes for us to achieve the ambitions and aspirations of Vision 2030, among them economic development, diversification, and sustainability; technology transfer and localization; infrastructure development; better quality of life; job opportunities and the upskilling of our human resources, leaving a legacy of prosperity for future generations,” he said.
“We are proud of the remarkable achievements made in the ‘Kingdom of Opportunities’ during the first phase of Vision 2030. We will continue our work to pave the way towards a bright future, enriched by a diversified and sustainable economy,” he added.
The Kingdom seeks to capitalize on its strategic geographical position, investment power, and place at the heart of both the Arab and Islamic worlds. According to SPA, the strategy also aims to raise the private sector’s contribution to GDP to 65 percent while increasing the contribution of foreign investments to GDP to 5.7 percent.
According to Arabian Business magazine, inward investment to the Kingdom averaged around SAR 30-37.5 billion (USD 8-10 billion) a quarter in the first ten years of the millennium. In 2011, that number dropped to SAR 15 billion (USD 4 billion) a quarter and declined over the years, reaching a low of SAR 5.25 billion (USD 1.4 billion) in 2017.
In contrast, the highest recorded rate of inward investment in the Kingdom was reported in the second quarter of 2021, with numbers climbing to a record SAR 51.75 billion (13.8 billion), the highest FDI inflow since the start of 2006.
The strategy also aims to increase non-oil exports by 34 percent, raising it to 50 percent of the non-oil GDP. This will reduce the unemployment rate in the Kingdom to 7 percent, to position Saudi Arabia among the top ten economies on the Global Competitiveness Index by 2030.