Mohammed bin Salman announces new economic strategy for the country
Saudi Crown Prince Mohammed bin Salman has unveiled a new five-year economic strategy aimed at achieving the kingdom's goal, known as "Vision 2030", as Saudi Arabia pushes to diversify the economy away from its reliance on oil and transform the kingdom into a global investment powerhouse with a diversified economy.
The Saudi Public Investment Fund (PIF) will invest $40 billion a year in the national economy for five years, the crown prince announced on Sunday, as the kingdom grapples with rising unemployment and the COVID-19 pandemic.
The PIF is a sovereign wealth fund, headed by Bin Salman himself, which manages assets of about $360 billion and employs more than 1,000 staff. In recent months it has also bought shares in European and US companies.
This sovereign wealth fund "will invest at least 150 billion rials (40 billion dollars, 33 billion euros) a year in the national economy until 2025", Prince Mohammed bin Salmane (MBS) announced in a televised speech broadcast by state media.
According to Mohammed bin Salman, the 2021-2025 strategy "will represent an important pillar in achieving our country's aspirations and aims to achieve the concept of comprehensive development".
It will focus on launching new sectors, empowering the private sector, developing the FIP portfolio, securing effective long-term investments, supporting sector localisation and building strategic economic partnerships, he added.
Saudi Arabia intends to be a leader in renewable energy and a pioneer in the fourth industrial revolution, as well as in tourism, transport, entertainment and sports. All this in relation to its assets and earnings, Bin Salman himself added in his speech.
His speech coincided at a time when the unemployment rate in the kingdom reached 14.9 per cent in the third quarter of 2020, approaching the record rate of 15.4 per cent recorded in the second quarter of last year, according to official data released last week.
The project becomes crucial in the wake of the drop in oil prices due to COVID-19. Saudi coffers were hit by the economic crisis and the authorities have been forced to undertake plans to mitigate the losses, tripling the value-added tax (VAT) and suspending a monthly allowance for civil servants.
PIF governor Yasir Al-Rumayyan said: "Over the past four years, the PIF has demonstrated its important role in contributing to the Kingdom's economy, in line with the ambitions of Vision 2030". By the end of 2020, we have tripled assets under management to almost $400bn, created 10 new sectors and generated 331,000 direct and indirect jobs.
"And as part of our strategy, we will continue to drive Saudi Arabia's economic transformation and empower the private sector. We also partner with innovative, transformative and disruptive companies around the world to consistently serve as an important catalyst for developing the industries and opportunities of the future."
The fund is the lead investor in a number of Kingdom-driven megaprojects. The latest plan is the creation of The Line, a 170km smart city made up of futuristic hyper-connected, car-free, road-free communities built around nature within the NEOM business district.
