Gulf kingdom launches ambitious program in bid to diversify economy, reduce dependence on oil
Saudi Arabia on Monday launched an ambitious program that it hopes will attract $427 billion in investments in the industrial and logistics sectors, as the OPEC kingpin bids to reduce dependence on oil.
To kick-start the 12-year program, the Gulf state announced the signing of 37 agreements worth $55 billion with foreign and local investors at a ceremony attended by Crown Prince Mohammed bin Salman.
The program is part of the kingdom’s 2030 Vision, the brainchild of Prince Mohammed, that aims to diversify its economy, which has been heavily dependent on oil prices.
Energy Minister Khalid al-Falih, speaking at a hotel in Riyadh, said the investments would be made in the fields of industry, mining, energy and logistics. The aim is to create 1.6 million new jobs, boost non-oil exports by $267 billion a year and add as much as $320 billion to gross domestic product, almost 40 percent of last year’s GDP, he said.
Among the agreements announced, two memoranda of understanding between the Saudi military industry program SAMI and French firm Thales and CMI Defence of Belgium. They also included energy deals between national oil giant Aramco and Saudi petrochemicals firm SABIC for a huge project to produce petrochemicals directly from oil.
Falih said that implementation had already started on a number of projects.
Other projects include building a 1,200-kilometer railway and five airports in addition to hundreds of kilometers of roads, said Transport Minister Nabeel al-Amudi.
At a conference it hosted in October, which was hit by an international boycott over the murder of journalist Jamal Khashoggi, Riyadh announced the signing of investment deals worth $44 billion.
Since the launch of Saudi Vision 2030, mega projects worth hundreds of billions of dollars have been announced in the Middle East’s largest economy but implementation has been slow.
In late 2017, the kingdom announced plans to build the $500 billion NEOM mega city in the northern Red Sea. Since the crash in oil prices in mid-2014, Saudi Arabia accumulated $313 billion in budget deficits, which was financed through withdrawing from the country’s fiscal reserves and borrowing.