Saudi Arabia’s Vision 2030 – five years since it was launched – is on the right track, despite facing challenged like falling oil prices and the Covd-19 pandemic.

Last month, the economic diversification plan – one of the overriding goals of Vision 2030 – got a new push as Crown Prince Mohammed bin Salman, Deputy Premier and Minister of Defence, marked the Vision’s fifth anniversary, and laid down its achievements to date.

According to him, Saudi Arabia’s non-oil GDP ratio rose to 59 per cent in 2020 from 55 per cent in 2016. Widespread economic reforms have resulted in non-oil revenues reaching SR369 billion ($98.4 billion) in 2020, from SR166 billion ($44.26 billion) in 2015, an increase of 222 per cent, he said.

The Crown Prince  confirmed the focus on economic diversification in an interview aired on local Saudi television and said to continue the pace of diversification, he will further centralise policymaking to ensure the success of his drive to diversify the economy.

He further revealed discussions with 30 Saudi companies within the `Shareek’ program, a SR12 trillion ($3.2 trillion) program which was launched in March to boost the role of the private sector in diversifying the economy.

Further, in another push to increase the kingdom's non-oil exports to 50 per cent  from about 25 per cent today, and raise the contribution of the private sector from 40 per cent to 65 per cent, Saudi government launched the ‘Made in Saudi’ initiative.

The plan aimed at supporting national products and services will create 1.3 million jobs in the mining and industrials sectors for the country’s citizens, said Minister of Industry and Mineral Resources Bandar Alkhorayef at a conference.

“We currently have 10,000 factories in the kingdom, with investments of SR1.1 trillion ($293 billion), and the kingdom's products reach more than 178 countries around the world,” Alkhorayef said.

According to data issued by the Ministry of Industry and Mineral Resources, Saudi Arabia licensed 115 new factories worth SR1.63 billion ($430 million) in January 2021. A total of 66 new factories began production, bringing the number of existing and under-construction factories to 9,783. The new licensed factories resulted in 4099 new jobs being created.

MAINTAINING RESILIENCE

Additional macro-economic indicators point to further signs that the Saudi economy is maintaining resilience despite current challenging market conditions.

For instance, Saudi Arabia’s Ministry of Investment (MISA) Winter 2021 Investment Highlights report, revealed:  Foreign Direct Investment (FDI) inflows into Saudi Arabia reached almost $1.9 billion in the fourth quarter of 2020, with a growth of 80 per cent compared to the same period in 2019, and indicated an increase of nearly 20 percent for the entire year of 2020 ($5.5 billion).

Investments in non-oil manufacturing facilities totaled $6.13 billion in 2020, with Q4 seeing a 95 per cent year-on-year increase compared to the same period in 2019.

Real GDP recovery is gaining pace, with official data showing a 5.9 per cent quarter-on-quarter growth in Q4.

MISA further said it granted record 466 foreign investor licenses in Q4, the highest on record since data compilation began in 2005. The figure represents a 52 per cent rise compared to the previous quarter and a 60 per cent increase over the same period in 2019. Also, December witnessed the highest number of licenses awarded at 189.

The results indicate a continued rebound in FDI: a total of 1,278 new foreign companies obtained licenses in 2020, a 13 per cent increase relative to 2019, and a 73 per cent increase from 2018.

“These figures indicate that the Saudi economy is maintaining resilience despite current challenging market conditions,” said Eng Khalid Al Falih, Minister of Investment of Saudi Arabia. n