SAUDI VISION 2030

The journey to Saudi Vision 2030

Recognised as one of the top twenty economies in the world (G20), the Kingdom of Saudi Arabia continues to be positioned as a key global market, particularly given it holds the world’s second largest oil reserve, is the largest exporter of oil and has the fifth-largest proven natural gas reserves, which have contributed to placing Saudi Arabia on the global map as a super-powerhouse.

Aside from its energy-asset, the country is also home to several high-profile accolades which include:

  • The 14th largest country in the world
  • One of the top 25 richest countries globally
  • Having the 11th largest stock market
  • Home to King Abdullah, who according to Forbes is the 8th most powerful person in the world
  • Having access to a youthful demographic which accounts for 19% of the total population

Leveraging its current position and demographic location, the country has the highest growth potential across the gulf. To unlock this opportunity, the leadership and government of Saudi Arabia plan to reduce its dependence on oil in order to drive a more sustainable, diversified and vibrant economy which is prepared to contribute and capitalize on future opportunities. 

Saudi Arabia’s Vision 2030 was introduced under three core pillars which focus on developing a vibrant society, a thriving economy and an ambitious nation that draws on the country’s intrinsic strengths to help the Kingdom’s citizens realize their aspiration.

The country now has a decade before the vision is fully realized, however, a significant transformative shift has already taken place, notably around the freedom of movement, with access to visa’s being much more fluid, the empowerment of females, and a more rigid financial services structure.

The latest developments of the Saudi Aramco IPO are testament to the commitment which the countries leaders have in respect of execution of their ambition. The IPO resulted in being the largest listing in on the Riyadh stock exchange, which led to Saudi Aramco being recognised as the most ‘valuable company on earth’, ahead of Apple Inc.

Over the course of the next decade we expect the following elements to take precedence in order to drive the vision further forward:

Rebranding - The nation will focus on rebranding itself as a modernized Arab country, with a strong influence across the region. This position will give rise to a developed socio-environment which further attracts global attention and increased FDI.

Renewable Energy - Whilst previous attempts to drive renewable energy may not have reached the ambitious targets set, green energy effort will be refocused, specifically given the low prices for solar and wind power, the countries focus to limit their reliance on oil-related revenues and drive a sustainable future with further fortify this. This may result in increased employment within this sector, which will further aid generation next.

Privatization - Privatization of assets across primary sectors such as renewables, education and healthcare will continue as a key focus, specifically as the kingdom wishes to raise $200bn by 2030. The National Center for Privatization & PPP was set up in 2017 to oversee sales of public assets and to forge public-private-partnerships (PPPs), likewise the IPO of Saudi Aramco will continue to support this effort. We will see an increased focus on PPPs which will inevitably drive further development and enhancement across sectors and services.

Foreign direct investment (FDI) - The political environment and fluctuation in oil process have had a direct impact on previous FDI trends, however the flow has since increased from 2017 onwards to more than 120%.This growth has been as a result of further industries now being opened up for international interest (recruitment and employment services, real estate brokerage, audiovisual and media services, and land transport services).

To further fuel FDI growth the Kingdom has adopted seven guiding principles for Investment Policymaking in 2019, including non- discrimination, investment protection, investment sustainability, enhanced transparency, protection of public policy concerns, ease of entry for employees, and the transfer of knowledge and technology, all of which will go some way to increasing investor confidence. An area of focus going forward for the Kingdom should be focused around the countries where inflow is currently coming from, with over 50% of FDI being attracted from the UAE, USA and France in the chemical industry and real estate.

Talent pool - Building a talent pool to support the future ambition of the country will remain a key focus for the country. Whilst certain restrictions have been relaxed, which include foreign ownership rules and the ability to now sponsor foreign workers, the cost of such talent remains steep and hence an ongoing challenge for business owners. Whilst the government has set Saudization quotas as a way of increasing local talent employment and future sustainability of the country, the current high levels of unemployment among natives, and under-employment of women remains a challenge, and one which will need further focus.

Neom city - Neom has been described as a bold and audacious dream, a vision of the new future and a new city being built on the Red Sea in Northwest Saudi Arabia, which will be a living laboratory for entrepreneurs and innovators. The city will include towns and cities, ports and enterprise zones, research centers, sports and entertainment venues, and tourist destinations. It will be the home and workplace for more than a million citizens from around the world.  With the city anticipated to be accessible in less than 4 hours for over 40% of the world, the Neom city will support the transformation effort of the Kingdom and hence remain a key development for the decade ahead.

Whilst the kingdom is focused on economic and social transformation, it is imperative that its political position remains stable, along with investment in the legal structure, given resolving commercial disputes are currently considered to be unconvincing.  Furthermore, ongoing focus will be required to strengthen the economic landscape, which is currently largely dependent on public spending.

The country has had a balanced ratio of global attention, where gender segregation and political involvement in conflicts have outshone the enhanced efforts placed in diversification and social development. 

The national transformation effort and ongoing elevation of its global position through reforms and restructures, which are underpinned by the 13 change programmes associated with Vision2030 will continue to accelerate the pace of growth for the country.

The country is fueled with the vision, resources and a youthful leader who is committed to driving change for a more vibrant future economy.  The focus for this decade will be in effective implementation and execution of Vision2030, which the world will continue to experience.

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