Saudi Arabia's economy has been sustained almost entirely by the oil industry for years. For this reason, one of the obsessions of the Crown Prince, Mohammed bin Salman, is to completely change this dependence through various initiatives that make it possible to diversify the country's economy. The latest of these, announced by the prince himself, has been the creation of a new Saudi state airline, which would be added to the existing Saudia, formerly known as Saudi Arabian Airlines, and whose main objective would be to turn Saudi Arabia into a global logistics hub.
Once this new project becomes a reality, Saudi Arabia would rise to fifth place in the world air traffic ranking. With a view to 2030, Mohammed bin Salman has expressed his intention to increase non-oil revenues to 45 billion rials - roughly 12 billion dollars. The initiative also includes the development of ports, rail and road networks, and would increase the transport and logistics sector's contribution to gross domestic product from 6 to 10 percent.
"The comprehensive strategy aims to position Saudi Arabia as a global logistics hub connecting the three continents," said the crown prince. He added that this project "will help other sectors such as tourism, Hajj and Umrah to achieve their national goals". Improving infrastructure is another of bin Salman's objectives, and for this reason he has made it clear that the creation of a new airline goes hand in hand with the promotion of the rest of the plans already underway in the country, with the aim of achieving the long-awaited diversification that will move the economy away from oil.
Some local media have advanced that among the aspirations of the Saudi government is the creation of a new airport to support the airline's plans. Such an airport would be planned for the capital, Riyadh, although the media outlets that have revealed this information have not provided further details. The Public Investment Fund (PIF) is the main vehicle for boosting investment in Saudi Arabia, both at home and abroad, with Vision 2030 as a key pillar.
Despite the terrible consequences that the COVID-19 pandemic has had and continues to have on economies around the world, Saudi Arabia has some reason to be optimistic about the future. The non-oil sector grew by almost 3% in the first quarter of 2021 compared to the same period last year, when the pandemic had not yet hit the global economy so severely. Meanwhile, the oil-linked economy did experience a significant decline of up to 11.7 per cent compared to last year.
Tamkeen Technologies CEO Mohamed al-Shaibi, in an interview with Oxford Business Group, analysed some of the keys to the growth of the non-oil economy in Saudi Arabia and said that "the pandemic has reinforced the Saudi government's focus on its digital agenda and transformation", which has caused, in a way, a change in perspective. And not just in reference to projects such as the new airline or Vision 2030, but to "facilitating the exchange of digital documents and transactions within government institutions".
Saudi Arabia is already working on many fronts to boost different economic sectors to move the country away from dependence on oil. However, both this project and Vision 2030 are not yet a reality and we will have to wait to see the fruits of these initiatives. What is clear is that the path being taken by Saudi Arabia, led by Crown Prince Mohammed bin Salman, is to expand the economy and turn it, if everything materialises as the government hopes, into one of the world's leading powers.