Saudi Arabia : From black gold to technology, the Vision 2030 revolution
The new Saudi area
Saudi Arabia's Finance Minister, Mohammed Al-Jadaan, recently announced a major breakthrough in the country's transformation process: non-oil GDP now accounts for 52% of the Saudi economy, up from just 40% in 2016.
This evolution is a direct result of efforts to develop sectors such as tourism, information technology, industry and financial services. This diversification is crucial for a country whose oil revenues have often accounted for over 70% of government revenue. Thus, the Saudi vision fits into a global context where economies are seeking to reduce their dependence on black gold, whose quantities are limited and finite. “Our goal is to become a diversified economy, capable of adapting to global changes and creating job opportunities for young people”, explains Al-Jadaan.
Another result of this diversification is that the country has succeeded in creating a real economic and employment market. Indeed, with a predominantly young population (around 70% of the Saudi population is under 35), Saudi Arabia is banking on job creation to meet the aspirations of its new generation.
By 2023, the unemployment rate among Saudis had fallen to 8.5%, a historically low level, thanks to the country's many transformation projects. The private sector has been encouraged to play a central role in this transformation, supported by regulatory reforms encouraging entrepreneurship and foreign investment.
Meanwhile, other sectors, such as tourism, are experiencing unprecedented growth. In 2022, the Kingdom welcomed 16.5 million visitors, an increase of 93% compared to 2021. The aim is to increase this figure to 100 million tourists by 2030, by developing internationally renowned tourist attractions such as Al-Ula, a region rich in historical heritage, the Diriyah area, the birthplace of the first Saudi capital, and diplomatic alliances to normalize relations, as with the Abraham agreements still being discussed.
Investment and technology as new pillars of the economy
Saudi Arabia's oil exit cannot be brutal. Investments, initiatives of all kinds and technologies are essential. Driven by Vision 2030, Saudi Arabia's Public Investment Fund (PIF) plays a key role in this regard. By 2023, the PIF has injected nearly $100 billion into local and international projects, aimed at positioning the Kingdom as a global player in various sectors. Among the flagship initiatives is NEOM, a futuristic megalopolis with an estimated investment of $500 billion.
This ambitious project, based on modern technologies and infrastructures, symbolizes Saudi Arabia's vision of an innovative future for the kingdom.
The other leg of the country's diversification is digital and technological transformation. The Saudi government has allocated $20 billion to modernize the country's technological infrastructure. This strategy is accompanied by the expansion of 5G and the deployment of cutting-edge technologies such as artificial intelligence and cybersecurity. The Ministry of Communications and Information Technology, for example, aims to increase the contribution of the digital economy from 3% to 10% of GDP by 2030. Finance also occupies a strategic place in Saudi development plans. Riyadh aims to become a regional financial center, in direct competition with hubs such as Dubai and Abu Dhabi.
A commitment to sustainable development
Although much remains to be done, Saudi Arabia has no intention of stopping in the face of criticism and the immensity of its ambitions. To complete the kingdom's renewal, MBS knows he must integrate ecology into his transformation program. To this end, in 2021, the Kingdom announced its “Saudi Green” initiative, a project that calls for the planting of 10 billion trees in the country and a reduction of 278 million tons of CO2 per year by 2030. What's more, in the energy sector, the Kingdom is also investing heavily in renewable energies, with projects such as the Sakaka solar power plant, the first large-scale installation of its kind in Saudi Arabia, and the Dumat Al-Jandal wind farm, the largest in the region. Investments in green technologies demonstrate the country's determination to position itself as a regional leader in clean energy. “We firmly believe that sustainable development is the key to our future and that of future generations,” said Mohammed bin Salman at the presentation of the Saudi Green initiative.
Saudi Arabia's model of transformation and development is now inspiring many countries in the Middle East and North Africa, also keen to diversify their economies. Nations such as the United Arab Emirates, Egypt and Bahrain are investing heavily in strategic sectors to reduce their dependence on hydrocarbons and follow Saudi Arabia's lead towards a more diversified economy. By supporting each other in this transition, these countries have the opportunity to create a consolidated economic area, like the European Union, and to build a region that will unite in the years to come to face the challenges of our time.
Sources :
https://www.arabnews.com/node/2577528/business-economy
https://www.businesslinkuae.com/saudi-vision-2030-industries-and-sectors-open-for-investment/
