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How Vision 2030 is transforming Saudi Arabia into a globally competitive economy

Investments for NEOM’s first phase could reach SR1.2 trillion by 2030. (Supplied)
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Updated 25 April 2024
Nadin Hassan
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How Vision 2030 is transforming Saudi Arabia into a globally competitive economy

  • From efficiency and economic performance to infrastructure and cybersecurity, the Kingdom is a desirable place to do business
  • Strides in transport, logistics and financial markets have boosted the Kingdom’s global competitiveness
Updated 25 April 2024
Nadin Hassan

RIYADH: What extraordinary feats did Saudi Arabia accomplish to see itself ranked ahead of China, Germany and the UK on a global measure of economic competitiveness?

On its eighth anniversary, Saudi Vision 2030 has reached several remarkable milestones and made steady progress since its inception by Crown Prince Mohammed bin Salman, revealing a transformative journey that continues to reshape the Kingdom’s future.




Vision 2030 has crossed several milestones and made steady progress since its unveiling by Crown Prince Mohammed bin Salman in 2016. (SPA photo)

“It is an ambitious yet achievable blueprint, which expresses our long-term goals and expectations and reflects our country’s strengths and capabilities,” the crown prince said at Vision 2030’s launch in 2016. 

“All success stories start with a vision and successful visions are based on strong pillars.” 

According to a competitiveness report by the Swiss-based International Institute for Management Development, the Kingdom ranks third among G20 nations on this metric, and 17th among all countries.

Just what are the achievements the Kingdom has made to secure this high global ranking among competitive countries?

According to the latest annual Vision 2030 bulletin, Saudi Arabia achieved significant progress in four competitiveness factors evaluated in the report. 

It leaped to sixth place in economic performance, advanced to 11th in government efficiency and 13th in business efficiency, while holding steady at 34th in infrastructure ranking.

Other performances include that the Kingdom is third among G20 countries, fifth globally in the financial market index, and second in the cybersecurity indicator.

PIF: An investment powerhouse

As the most crucial driver of economic diversification and the revitalization of vital sectors, the Public Investment Fund possesses leading investment portfolios.

These are designed to direct investments toward diversifying the economy, developing infrastructure, stimulating innovation, and strengthening global economic ties.




The Oxagon, located on the Red Sea in the Kingdom's northwest province of Tabuk, is being built as a home to advanced and clean industries in NEOM. (Supplied)

The fund has broadened its portfolio to encompass promising sectors with significant growth potential, covering everything from tourism and entertainment to financial technology, gaming, and sports. 

Its investment competence has swiftly increased, positioning PIF as a global leader in capitalizing on economic opportunities at both national and international levels.

Strides in the logistics sector

Since the launch of Vision 2030, Saudi Arabia has been unlocking the potential of the logistics sector, capitalizing on its strategic location and unique capabilities to become a leading hub.

This focus has begun to bear fruit, with a series of achievements reinforcing the Kingdom's global status in the logistics arena. 

Progress in this arena was underlined when Saudi Arabia leapt 17 places in the World Bank’s Performance Index, advancing from 55 to 38.

Additionally, the Kingdom saw an eight-place advancement in Lloyd’s List Global Ranking for Container Handling Among the World's Top 100 Ports, from 24 to 16.

Furthermore, the Kingdom made its most significant jump in the International Air Connectivity Index, moving from 27th to 13th place, according to the report by the International Air Transport Association.

Business efficiency

Since March 2020, the Saudi Business Center has delivered 2.5 million services to the private sector through its 17 branches across the Kingdom.

These services aim to streamline business startup processes and offer various related services, following international best practices.

This approach helps attract investments and creates a supportive environment, with high-quality services provided efficiently to the business sector.

The Vision 2030 report noted that the Kingdom moved up in the National Entrepreneurship Context Index from fourth to second place, a result of achieving a top ranking in several sub-indicators, revealing continuous development and a competitive global position in the entrepreneurship sector.

Saudi Arabia also ranked first in several sub-indicators for 2023, including indexes which measure the ease of starting a business, fear of failure, and individuals’ skills and knowledge. The Kingdom was also top for metrics building great wealth, knowing someone who started a new business, and the availability of good opportunities to start one.

Saudi Arabia has made significant progress on the global stage, which means that it has already mastered the smaller-scale challenges.

It led the Middle East and North Africa in venture capital investment by value for 2023, according to a report from the startup investment data platform MAGNiTT.

This top ranking reflects the Kingdom's efforts over the past several years to create an encouraging and supportive environment for entrepreneurship and investment in startups, fostering the growth of the private sector and providing more economic opportunities.




Men walk at the campus of the King Abdullah University of Science and Technology in Thuwal. (Supplied)

Transport infrastructure

The transportation sector is crucial for sustainable development and plays a key role in improving safety by enhancing roads and implementing advanced transportation systems. 

These efforts help reduce road accidents, injuries, and fatalities, creating a safer environment and boosting overall quality of life — all part of the goals of the National Transport Strategy, within the framework of Vision 2030.

The report outlined traffic safety indicators and highlighted that the road fatality rate dropped from 28.8 per 100,000 people in 2016 to 13.3 by 2022.

It also noted that the injury rate fell to 71.67 injuries per 100,000 individuals in 2022.

Competitive financial market

Saudi Arabia’s financial market has experienced significant growth and activity since Vision 2030 was announced, demonstrating the strength and robustness of the Kingdom’s financial sector.

The Kingdom was ranked fifth globally — and third among G20 countries — in the Financial Markets Index, according to the 2023 International Competitiveness Yearbook by the World Competitiveness Center.

The number of financial technology entities in 2023 reached 216, far exceeding the target of 150. This indicates rapid growth and development in the financial technology sector.

Furthermore, the number of listings in the financial market for 2023 reached 43, surpassing the target of 24, indicating increased interest from companies to list on the market.

This growth is a positive sign of investor confidence and the attractiveness of the market for public offerings, as the total number of listed companies is now 310, indicating a diverse and extensive market.

A high percentage of micro and small enterprises listed on the market, at 76.7 percent compared to the target of 44 percent, demonstrates that even smaller businesses are finding opportunities to go public, according to the report.

Saudi Arabia’s story of transformation has many authors, including the government, Saudi citizens, the private sector, and international partners.

In 2023, their combined efforts made Saudi Arabia an even better place to live, work, and visit. 

Together, they are writing the next chapter in 2024 — a year of unrivaled opportunity for the Kingdom and anyone who wants to be part of the story.
 

 

Topics: Saudi Vision 2030 Editor’s Choice Crown Prince Mohammed bin Salman

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Saudi Arabia, Gulf region ‘well positioned’ to take lead on global energy transition, says S&P executive

Updated 10 sec ago
DANIEL FOUNTAIN
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Saudi Arabia, Gulf region ‘well positioned’ to take lead on global energy transition, says S&P executive

  • Under President Donald Trump’s renewed leadership, energy policy in the US is expected to shift toward an emphasis on increasing crude and gas production
Updated 10 sec ago
DANIEL FOUNTAIN

DAVOS: The Middle East, particularly Saudi Arabia, is poised to play a pivotal role in the global energy transition, according to Mark Eramo, co-president of S&P Global Commodity Insights. 

Speaking to Arab News at the annual meeting of the World Economic Forum in Davos, Eramo highlighted the region’s growing renewable energy capabilities and its potential to balance traditional energy demands with advancing sustainability goals.

“The renewable energy capabilities in the Middle East are primed to be part of the energy transition and will also continue to support what we would now call traditional energy as it’s needed,” Eramo said.

He emphasized the ongoing importance of energy affordability and security, noting their priority for governments worldwide. 

Eramo said Saudi Arabia, with its growing investments in the renewable energy sector, as well as ammonia production for hydrogen, is poised to emerge as a worldwide leader, adding: “The Kingdom is really positioned well to be an energy transition provider and take a global leadership role in that.”

With this in mind, Eramo highlighted S&P’s significant footprint in the Middle East and said the organization was in the process of expanding its presence in the region, something he said he was “excited about.”

He continued: “I manage S&P Global Commodity Insights and watch closely what is happening in Saudi Arabia and the region is near and dear to the work that we do. It’s a fundamental part of what we’re doing, whether it be downstream chemicals or just fundamental oil and gas and renewable energy. So, our plan is to increase our footprint in the region and be there.” 

Eramo also reflected on the global energy outlook, touching on the implications of potential US policy shifts. 

Under President Donald Trump’s renewed leadership, energy policy in the US is expected to shift toward an emphasis on increasing crude and gas production and expanding export terminal capacity, something which was paused under the administration of Joe Biden.

Citing that Trump this week declared an “energy emergency” in the US, Eramo said that the new administration’s focus on lower energy prices would aim to curb inflation and prioritize security.

Globally, he also noted the varied and pragmatic approach to the pace of energy transition, shaped by differing regional priorities. 

“There are challenges in Europe, Asia Pacific, and South Asia. Each country, whether it’s China or India, will respond differently,” he said. 

“It’s not about whether energy transition is over but understanding that it’s been going on for decades, driven by carbon emission reductions and fuel efficiency advancements,” he added.

Eramo acknowledged the historical resilience of energy players in navigating geopolitical uncertainties, especially in the Middle East in the past two years. 

“I think there’s a long history of geopolitical turmoil in different parts of the world, and I think the major players in energy supply, including in the Middle East, have always found a way to work with their partners — whether in Europe, APAC (Asia-Pacific) or in the Americas — to navigate those waters and respond accordingly,” he said.

 

Topics: WEF 2025

Saudi education spending surges 91.5% amid school return 

Updated 45 min 45 sec ago
MIGUEL HADCHITY 
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Saudi education spending surges 91.5% amid school return 

Updated 45 min 45 sec ago
MIGUEL HADCHITY 

RIYADH: Education spending in Saudi Arabia surged by 91.5 percent to SR220.76 million ($58.8 million) between Jan. 12 and 18, fueled by students returning to school after the midyear break. 

According to the latest point-of-sale transactions bulletin, this sector was the only one to register positive growth during the week, with the number of transactions rising by 60 percent to 153,000. 

In contrast, overall POS transactions in Saudi Arabia declined by 12.1 percent, dropping to SR11.77 billion from SR13.4 billion the previous week, as spending in other sectors cooled, revealed the bulletin issued by the Saudi Central Bank. 

Spending on clothing and footwear saw the sharpest decline, falling 27.5 percent to SR663.16 million. Expenditure on hotels followed with a 19.9 percent dip to SR324.45 million, while recreation and culture recorded a 19.7 percent drop to SR221.8 million. 

Similarly, spending on food and beverages recorded a decrease of 9.2 percent to SR1.73 billion, claiming the biggest share of the total POS value. Expenditure in restaurants and cafes followed, recording an 18 percent decrease to SR1.73 billion. 

Miscellaneous goods and services accounted for the third biggest POS share with a 12.3 percent downstick, reaching SR1.42 billion. 

Spending in the leading three categories accounted for approximately 41.5 percent or SR4.8 billion of the week’s total value. 

At 2.1 percent, the smallest decrease occurred in spending on construction materials, leading total payments to reach SR340.1 million. 

Expenditures on transportation followed dipping by 2.6 percent to SR661.6 million, while public utilities recorded a 6 percent fall to SR48.1 million. 

Geographically, Riyadh dominated POS transactions, representing around 35.5 percent of the total, with expenses in the capital reaching SR4.18 billion — a 9 percent decrease from the previous week. 

Jeddah followed with a 12.5 percent dip to SR1.71 billion, and Dammam came in third at SR602.91 million, down 7.1 percent. 

Madinah experienced the most significant decrease in spending, dipping by 19.6 percent to SR471 million. 

Hail and Makkah followed recording decreases of 18.6 percent and 17 percent reaching SR171.87 million and SR497.28 million, respectively. 

Madinah and Makkah saw the largest decreases in terms of number of transactions, slipping 13.5 percent and 12.7 percent, respectively, to 7.98 million and 8.18 million transactions. 

Topics: point-of-sale Education

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PIF to sell Thiqah to Elm in $907m deal to strengthen Saudi Arabia’s ICT sector

Updated 22 January 2025
MIGUEL HADCHITY 
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PIF to sell Thiqah to Elm in $907m deal to strengthen Saudi Arabia’s ICT sector

  • Deal involves the purchase of 45,000 shares, each with a nominal value of $266.56
  • Sale aims to foster digital transformation, create high-skilled jobs, and support economic diversification
Updated 22 January 2025
MIGUEL HADCHITY 

RIYADH: Saudi digital solutions company Elm has agreed to acquire Thiqah Business Services Co., owned by the Public Investment Fund, in a deal valued at $907 million to boost the information and communications technology sector. 

Elm has signed a share purchase agreement with PIF to acquire Thiqah in a cash transaction following discussions initiated in 2023, the company said in a bourse filing. 

The deal involves the purchase of 45,000 shares, each with a nominal value of SR1,000 ($266.56), representing the entire issued share capital of Thiqah. 

The acquisition is expected to play a pivotal role in advancing Saudi Vision 2030’s goal of fostering digital transformation, creating high-skilled jobs, and supporting economic diversification, the company said in a press release. 

“This is an important transaction for Elm, as it enhances integration, rationalizes spending, increases profitability, and provides qualitative advantages for both parties and the market,” said Mohammad Abdulaziz Al-Omair, the CEO of Elm. 

He said the integrated entity will be better positioned to deliver advanced national smart services, meeting market requirements and client needs. 

“It will also contribute to facilitating innovative operations and capabilities to develop products in the business field with cost advantages, while achieving economies of scale,” added Al-Omair. 

The transaction, subject to regulatory approvals and fulfilment of agreement conditions, marks a strategic move to enhance Saudi Arabia’s information and communication technology ecosystem. 

The transaction further aligns with PIF’s broader strategy of enabling the Kingdom’s digital transformation by supporting high-impact investments in key sectors. 

“PIF is committed to enabling the creation of national champions who contribute to driving the development and growth of the Saudi economy. said Shahd Attar, head of technology and media, MENA Investments, at PIF.

“PIF’s sale of Thiqah to Elm will enhance the ICT sector’s vital role and strengthen efforts to localize technology and drive innovation,” Attar added.

The ICT industry is considered a fundamental enabler for multiple other sectors, including entertainment, financial services, health care, transport and logistics, and utilities and renewables. 

As one of the world’s largest and most influential sovereign wealth funds, PIF plays a leading role in driving Saudi Arabia’s economic transformation. 

Since 2015, PIF has significantly expanded its investments, establishing 99 companies and focusing on 13 strategic sectors domestically and globally. 

PIF’s Vision 2030-aligned investment strategy prioritizes key industries contributing to local content development, private sector partnerships, and technological localization. 

The sale of Thiqah to Elm is part of PIF’s broader efforts to maximize the value of Saudi assets while reinforcing its commitment to a knowledge-based digital economy. 

Topics: PIF Thiqah Elm Saudi Arabia's Public Investment Fund (PIF)

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Oil Updates — crude steady as investors watch Trump 2.0 policies

Updated 22 January 2025
Reuters
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Oil Updates — crude steady as investors watch Trump 2.0 policies

Updated 22 January 2025
Reuters

SINGAPORE: Oil prices were little changed on Wednesday as markets weighed US President Donald Trump’s declaration of a national energy emergency on his first day in office and its impact on supply.

Brent crude futures rose 9 cents to $79.38 per barrel at 7:20 a.m. Saudi time, while US West Texas Intermediate crude futures inched up 1 cent to $75.84.

The contracts settled lower on Tuesday after Trump laid out a sweeping plan to maximize oil and gas production, including by declaring a national energy emergency to speed permitting, rolling back environmental protections, and withdrawing the US from the Paris climate pact.

“Market participants are trying to digest the mixed signals that Trump 2.0 bring for the trajectory for oil prices,” said Yeap Jun Rong, market strategist at IG.

“Near-term focus will be on whether his aim to fill up the US strategic reserves materializes,” said Yeap, adding that attention is on his upcoming tariff policies.

Trump’s latest energy policy is unlikely to spur near-term investment or change US production growth, analysts at Morgan Stanley wrote in a note, adding that it could, however, moderate potential erosion of refined product demand.

Analysts also questioned if Trump’s promise to refill the strategic reserve would make any changes to oil demand as the Biden administration was already purchasing oil for the emergency stockpile.

Investors also remained cautious as Trump’s trade policy remained unclear. He said he was thinking of imposing 25 percent tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as previously promised.

The US president also added that his administration would “probably” stop buying oil from Venezuela, among the top suppliers of oil to the country.

Meanwhile, a rare winter storm churned across the US Gulf Coast on Tuesday, and much of the US remained in a dangerous deep freeze.

North Dakota’s oil production was estimated to be down by between 130,000 and 160,000 barrels per day due to extreme cold weather and related operational challenges, the state’s pipeline authority said on Tuesday.

The impact of the storm on oil and gas operations remained limited in Texas, with minimum interruptions in gas flows, few power outages and plenty of gasoline inventories at the pump, as many roads and highways remained closed.

Topics: oil updates oil prices

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WEF panelists call for systemic policy shifts to help developing countries out of global debt crisis

Updated 22 January 2025
Arab News
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WEF panelists call for systemic policy shifts to help developing countries out of global debt crisis

  • At World Economic Forum Annual Meeting in Davos, they urge governments and lenders to take shared actions to build strong, resilient economies and relieve debt burdens
  • Developing countries have accrued twice as much debt since 2010 compared with those in the developed world
Updated 22 January 2025
Arab News

DUBAI: The international community must devise ways to help nations in the developing world out of the global debt crisis and safeguard societies from the long-term effects of economic stagnation.

This was the message from a panel of experts during a discussion at the World Economic Forum Annual Meeting in Davos on Tuesday. Amid global transformations and ongoing uncertainty, they called for shifts in domestic and global monetary policies to provide relief for countries with debt burdens, and for governments and lenders to take shared actions to help build strong and resilient economies.

An International Monetary Fund report published in October stated that global pubic debt was expected to exceed $100 trillion during 2024, representing about 93 percent of global gross domestic product. Developing countries have accrued twice as much debt since 2010 compared with those in the developed world, according to UN figures..

The COVID-19 pandemic, climate change and unprecedented hikes in interest rates have compounded this debt crisis in some countries, potentially jeopardizing the futures of generations to come and slowing global progress.

Rebeca Grynspan, the secretary-general of UN Trade and Development, called for change at a systemic level to help countries take proactive steps to avoid debt problems in an ever-changing world.

“The developing world has half the debt that developed world has, the problem is paying for it,” she said.

“Firstly, we should avoid a liquidity problem becoming a debt problem. We have instruments that we don’t use in the international system, like special drawing rights.

“Secondly, the developing countries need long-term loans. If you go for infrastructure, you really want to grow, you need long-term money.”

For a monumental shift to take place, multilateral development banks need to scale up, take risks and crowd in private investment, Grynspan added.

About 3.3 billion people live in countries that spend more servicing debt than they do on education or health, according to a report published by the UN in July 2023.

“Markets are not in crisis but people are,” said Grynspan. “We don’t have a debt fault, but we have a development fault and that in turn will come to hunt us because if you cannot have growth in these countries, then we will not be able to get onto a sustainable path.”

Andre Esteves, chairperson and senior partner of Brazilian financial company Banco BTG Pactual, warned that a trade war between US and China during Donald Trump’s second term as president might affect other countries. However, he also highlighted positive indicators among the policies of the new administration in Washington.

“The whole idea of more fiscal discipline, ranging from deregulation and private-sector growth,” he said by way of examples. “But there needs to be the core of regulatory framework, otherwise it would be a bad move.”

As the debt crisis fuels power imbalances, dominance is expected to skew toward China, said Simon Freakley, the chairperson and CEO at global consulting firm AlixPartners.

“In today’s world, where developing countries are struggling to pay back their debt, they need to borrow more,” he noted, adding that China is able to exert significant influence as its capital markets are wide open to commodity-rich countries unwilling to borrow more money or service a debt.

Rania Al-Mashat, Egypt’s minister of planning, economic development and international cooperation, said macroeconomic stability needs to be coupled with structural reforms that improve the business environment to attract investment, reduce burdens and support the green transition.

Amid escalating conflicts in the Middle East and North Africa region, policies must be adopted to help mitigate the effects of various types of shocks, she added. For example, an IMF-supported Egyptian program was approved in December 2022 with the aim of achieving macroeconomic stability and encouraging private-sector-led growth.

“The manufacturing sector could benefit from inflows there,” Al-Mashat said. “We are also trying to put stringent ceilings on public investment so that the private sector can come in. All of these are drivers for growth financing for development.”

She called for a rethinking of global financial architecture to help more middle-income, emerging economies find alternative financing, such as debt swaps, for climate action or development.

Mohammed Aurangzeb, Pakistan’s minister of finance and revenue, warned of the long-term effects of economic stagnation. He said his country this month entered into a 10-year partnership with World Bank Group to address the issues of climate change and population.

“Population means child stunting, learning poverty and girls out of school,” he says. “There’s also climate resiliency and decarbonization. Unless we address this, the medium-to-long-term growth is not going to be sustainable.”

Topics: WEF 2025

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