Private sector led economic diversification programme in Saudi Arabia : Daily Current Affairs

Private sector led economic diversification programme in Saudi Arabia

Covid 19 pandemic has changed the path of economies in several countries. Gulf region is also directing changes in its economy. In this context , Saudi Arabia’s crown prince recently confirmed that the oil firm Aramco and petrochemical firm SABIC will lead investments of five trillion riyals ($1.3 trillion) by the country’s private sector by 2030 under an economic diversification programme. This new investment plan will help to create thousands of new jobs in saudi arabia.

This economic diversification programme is part of investment plans worth of 12 trillion riyals ($3.2 trillion) planned by 2030. That also includes three trillion riyals ($800bn) from the Public Investment Fund (PIF) and four trillion riyals ($1.1 trillion) under a new Saudi investment strategy, of which some two trillion rials ($533bn) would be foreign investment.

Reliance on oil exports is the major issue with which saudi arabia is worried and wants substantial reduction in such reliance. Saudi Arabia crown prince announced that this initiative or programme aims to mobilise the Gulf Arab state’s private sector to help wean the economy off its reliance on oil exports, which still account for more than half the state’s income.

Saudi Arabian prince also pointed out that Public Investment Fund (PIF) is working with other sovereign wealth funds in the gulf region on a fund called “Invest In Saudi” that would be worth between 500 billion riyals ($133bn) to one trillion riyals ($267bn). 24 companies, most of them being publicly listed firms, would invest two trillion riyals ($533bn) by 2025 and another three trillion riyals ($800bn) by 2030. PIF is a shareholder in most of them.