RIYADH, March 31, 2021 (BSS/AFP) – Saudi Arabia on Tuesday announced plans
to pump fresh investments worth $3.2 trillion into the national economy by
2030, as the top crude exporter accelerates economic diversification efforts.
The announcement by de facto ruler Crown Prince Mohammed bin Salman
underscores a push to jumpstart the domestic economy as the OPEC kingpin
battles high youth unemployment and a coronavirus-triggered downturn.
“The total investment injected… into the national economy is expected to
reach 12 trillion riyals ($3.2 trillion) by 2030,” Prince Mohammed said in a
speech carried by state television.
That amount includes three trillion riyals from the Public Investment Fund
(PIF), the kingdom’s sovereign wealth fund.
Twenty-four of the kingdom’s biggest companies, including energy giant
Aramco and petrochemical firm SABIC, will contribute five trillion riyals
over the next decade, the crown prince told reporters later at a virtual
briefing.
He said the companies, many of them listed, had agreed to lower their
dividends and redirect the money into the domestic economy in exchange for
incentives such as subsidies.
The remaining four trillion riyals will come from a new “national
investment strategy”, which will soon be announced, the prince said.
The initiative will help boost economic growth, create hundreds of
thousands of new jobs and strengthen the private sector, Prince Mohammed
added.
The programme is part of a mammoth 27 trillion-riyal ($7 trillion)
investment plan over the next decade, which will include huge government
spending to spur the domestic economy, the prince said.
The announcement comes after the crown prince said in January that the PIF
would invest $40 billion annually in the domestic economy over the next five
years.
The kingdom is pushing to boost job creation and revive businesses
decimated by the pandemic.
Joblessness in Saudi Arabia touched 14.9 percent in the third quarter of
2020, dipping slightly from an all-time high of 15.4 percent in the previous
quarter, according to official data. Last year, the twin shocks of the
pandemic and a drop in oil prices prompted the petro-state to triple its
value-added tax and suspend a monthly allowance to civil servants to rein in
a ballooning budget deficit.
Saudi Arabia, the biggest Arab economy, has been struggling to attract
foreign investment, a key pillar of the crown prince’s “Vision 2030” economic
diversification plan to boost non-oil revenue.