Known for its rich oil reserves and expansive deserts, the Kingdom is shedding its old skin and emerging as a much-talked-about hub for global investments, AT Kearney notes in a report.
And this isn't just a passing fad—there's a well-structured implementation
strategy for attracting foreign investment and development. This comes from the
government’s Vision 2030, which is fueling impressive economic growth; the kingdom’s
gross domestic product (GDP) reached about $834 billion in 2022. It’s no wonder
all eyes are on Saudi Arabia. Let’s dive into the investment landscape and the
opportunities.
The country’s Vision 2030 is more than just a vision; it's a blueprint for
Saudi Arabia's economic and social metamorphosis. It's not about only relying
on black gold anymore. The kingdom is implementing programs dedicated to
growing tourism, culture, healthcare, housing, financial, and energy sectors as
well as supporting many giga-projects that are already well underway. The best
part? The public and private sectors are working shoulder to shoulder to spark
ample investment opportunities.
The kingdom has a variety of national growth strategies and initiatives.
These aren’t mere policy documents; they’re powerful catalysts set to
turbocharge the Kingdom's economic growth, substantially increasing the quality
and magnitude of investments.
The National Investment Strategy. This aims to substantially elevate
the quality and scale of investment in the Kingdom, aligning with Vision 2030's
objectives and highlighting priority sectors such as green energy, technology,
healthcare, and biotechnology. Three strategic themes guide this strategy:
bolstering the private sector's economic contribution, nurturing strategic
sectors, and transforming the investment ecosystem to foster innovation.
Ambitious 2030 goals include tripling the investment volume, doubling domestic
investment, and multiplying foreign direct investment twenty-fold. The strategy
is built on four pillars: investment opportunities, investors, funding, and
competitiveness and enablers. With a dual-track approach, the strategy combines
immediate initiatives with long-term programs to address structural challenges,
supported by a robust governance model.
The National Industrial Strategy. Saudi Arabia unveiled this strategy
in late 2022 as a comprehensive plan for diversifying the Kingdom’s industrial
base, enhancing non-oil exports, inviting foreign investment, and boosting
innovation, research, and local employment. With 12 key industrial sub-sectors
identified, the strategy targets three strategic goals: cultivating a flexible
national industrial economy, establishing an integrated regional industrial
center, and achieving global leadership in selected industrial commodities. The
strategy anticipates significant economic impacts by 2035, aiming to increase
industrial contributions to GDP to $377 billion, expand industrial-sector job
opportunities to 3.3 million, raise industrial exports to $238 billion, and
improve industrial performance and complexity indexes to rank among the top 15
countries.
The National Transport and Logistics Strategy. This aims to transform
the Kingdom into a global logistics hub by enhancing air, maritime, rail, and
road transport services through infrastructure development, new operating
models, and public–private partnerships. Additionally, it incorporates an environmental
component aiming for a 25 percent reduction in fuel consumption. The ultimate
goal is to increase the sector's contribution to the GDP from 6 percent to 10
percent and escalate non-oil revenues to $12 billion annually by 2030.
The Saudi Maritime Transport System Strategy. In 2022, Saudi Arabia's
Ports Authority (Mawani) unveiled this strategy to advance the country's
maritime logistics sector. The strategy entails more than 160 projects that
enhance port capacity, increase regional transshipment share, and improve port
occupancy rates. Furthermore, it aims to uplift the nation's standing in global
logistics and maritime connectivity indices. Mawani's strategy, underpinned by
three pillars—enabling growth and innovation, regulatory enhancement, and a
stable regulatory and commercial environment—is projected to create one million
job opportunities in the transportation sector by 2030. That’s already begun
with the creation of International Maritime Industries (IMI) and other national
champions.
The National Strategy for Data & AI. Launched by the Saudi Data
& AI Authority (SDAIA), this aims to position Saudi Arabia as a global data
and artificial intelligence hub, catalyzing economic and social growth. The
strategy focuses on five main goals: transforming the Saudi workforce by
cultivating 20,000 data and AI specialists, enacting progressive legislation
for data and AI businesses and talents, attracting SAR 75 billion in investment
into qualified data and AI opportunities, empowering top data and AI
institutions to lead innovation and impact, and stimulating data and AI
adoption by nurturing an ecosystem of 300 data and AI start-ups. Key focus
sectors include education, government, healthcare, energy, and mobility.
The National Tourism Strategy. This strategy aims for tourism to
contribute about 10 percent to the national GDP and create around 1.6 million
job opportunities by 2030. That growth includes reaching 100 million overnight
visits to the Kingdom and hosting more than 37 million Hajj and Umrah visitors.
This comprehensive strategy promotes accommodation, travel services, food and
beverage, tourism retail, culture and entertainment, sports and recreation, and
road, water, railway, and air transportation.
The Saudi Green Initiative. This ambitious, multifaceted plan aims to
combat climate change, reduce emissions, and foster a green economy. Its three
main goals are to reduce emissions by generating half of the Kingdom’s power
from renewable resources, green Saudi Arabia by planting 10 billion trees, and
protect land and sea by preserving 30 percent of terrestrial and marine areas
by 2030. The initiative has made significant strides in 2022, with 18 million
trees planted, 60,000 hectares of degraded land rehabilitated, and renewable
energy powering 150,000 homes. These efforts reflect Saudi Arabia's commitment
to a sustainable future, with a comprehensive approach involving the entire
society and public and private sectors.
An unprecedented injection of public investments. Finally, let's talk
numbers. By 2030, the Kingdom will have invested SR12 trillion ($3.2 trillion)
into its economy. How's this breaking down? Shareek program initiatives,
high-impact initiatives that aim to increase domestic investments of private
sector companies, will fuel SR5 trillion ($1.3 trillion). The Public Investment
Fund (PIF), the Kingdom’s sovereign wealth fund and one of the largest in the
world, is adding another SR3 trillion ($0.8 trillion). And the other SR4
trillion ($1.1 trillion) will come from investments orchestrated by the
National Investment Strategy.
In a significant move to boost local and foreign investments, Saudi Arabia
established the National Incentives Committee (NIC) in 2022 under the authority
of the Supreme National Investment Committee. The NIC has been granted the
power to structure, approve, and supervise segment-specific incentive packages
in concert with other governmental entities. There's an incentive for every
need, from financial perks such as loans and export credit financing to the
employment support program and R&D incentives. The incentives encompass a
broad spectrum, including tax relief, discounts on government fees, relaxed
Saudization requirements (requirements to hire Saudi nationals on a quota
basis), and government subsidies across various sectors.
