Saudi economy transforming at an accelerated pace: Finance Minister
Saudi Arabia is intensifying efforts
to execute its ambitious Vision 2030, aiming to diversify its economy and
reduce reliance on oil revenue, Finance Minister Mohammed Al-Jadaan said at the
Future Investment Initiative (FII) summit on Wednesday. He emphasized the
government’s commitment to investing in large-scale infrastructure, including
the mega-city NEOM, a centerpiece of Crown Prince Mohammed bin Salman’s
strategy to expand the private sector, develop new industries, and create substantial
employment opportunities.
"We are very excited and
pleased with the progress of Vision 2030, but there is no room for
complacency," Al-Jadaan remarked, affirming that the initiative remains
largely on track. Saudi Arabia’s $925 billion Public Investment Fund (PIF) has
been pivotal to this transformation, establishing a strong presence globally
through high-profile investments, including stakes in companies like Uber.
However, PIF’s governor announced plans to reduce overseas investments by a
third, redirecting focus toward domestic projects.
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Foreign direct investment (FDI) is
crucial to this economic overhaul. Saudi Arabia aims to attract $100 billion in
FDI by 2030, roughly 6% of its GDP. While FDI has been on an upward trend,
reaching this target by 2030 remains challenging. Al-Jadaan noted that non-oil
GDP now represents around 52% of the economy, underscoring the success of
diversification efforts, despite challenges in human resources and
implementation.
The FII summit, now in its eighth
year, gathered global financial leaders, including former U.S. Treasury
Secretary Steve Mnuchin and other high-profile attendees. During the event, PIF
announced its role as an anchor investor in Brookfield’s new $2 billion Middle
East-focused private equity fund, while PIF-owned Riyadh Air placed an order
for 60 Airbus A321 jets. Additionally, Saudi Arabia’s mining giant Ma’aden is
in advanced talks for a stake in a Zambian copper mine, a deal expected to be
finalized this year. Mining is increasingly central to Vision 2030, supporting
the Kingdom’s diversification goals.
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Although the Israel-Gaza conflict
was not on the formal agenda, it was a prevalent concern, with investors
discussing potential impacts on regional investments. Al-Jadaan reassured
attendees, calling Saudi Arabia "one of the brightest spots in the
world" for investment stability amidst the regional unrest.
Source: Reuters
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