‘Our Vision: Saudi Arabia… The heart of the Arab and Islamic worlds, the investment power house and the hub connecting three continents’
– HRH Mohammed bin Salman
A bold and ambitious vision was recently unveiled by Saudi Arabia – Vision 2030, the National Transformation Program.
The program promises much and focuses on diversification away from oil to provide a stable and sustainable economic future for the Kingdom of Saudi Arabia.
The Vision 2030 announcements followed months of planning, workshops and seminars organised by the Committee for Economic and Development Affairs (CEDA) and facilitated by many independent consulting companies; Ministers, their senior staff, government agencies and the private sector.
Although only announced two months ago, we are already seeing Saudi Arabia putting this vision into action. The planned expansion of the Public Investment Fund (PIF) to create the world’s largest Sovereign Wealth Fund has already begun with investment decisions such as the recently announced $3.5 billion investment in Uber as well as the appointment of advisers for a part-privatisation of Aramco.
Of course the investment in Uber makes a great deal of sense; Saudis are voracious consumers of social media and technology in general. Indeed one of the first successful ride sharing apps, Kareem, was founded in the Kingdom and along with Uber remains very popular with expats and Saudi Nationals particularly females.
Steps have already been taken to normalise aspects of the economy; the removal of generous subsidies on fuel, electricity and water as well as the introduction of air passenger duties and a land tax. Revenues will be raised further through the planned introduction of a Value Added Tax on certain goods as well as so-called sin taxes on tobacco, sugary drinks and junk food.
Further detail of Ministry specific plans and targets has emerged following the publication of the National Transformation Program 2020, which focuses on twenty-four Government bodies. The program is a first phase for the Vision 2030 plan and seeks to ensure a smooth transformation for the economy.
The program’s initiatives include major developments in various sectors and an increase in Public Private Partnerships (PPP) which will open up vast opportunities for investors, contractors and cross-sector supply chain.
Reducing unemployment is a key driver throughout all the Vision 2030 initiatives and there is a particular emphasis on female employment. The world’s largest female university is in Riyadh and indeed 60% of undergraduates are female in the Kingdom. There have already been significant changes to working rules, regulations and practices for females and Vision 2030 will deliver further, progressive change.
Support for Small and Medium Sized businesses (SMEs) is also a key focus with a number of initiatives specifically targeting the SME sector. These initiatives and policies reflect the Saudi Government’s acknowledgement of the critical role SMEs play in job creation.
It is projected that the entire Middle East region will be affected by new liberal reforms in the Kingdom. Trade between Saudi Arabia, the Gulf region, and the wider world is set to receive a huge boost amid major investments and an unprecedented new role for the private sector.
The Vision 2030 plan provides a framework for the development and delivery of detailed policies and initiatives. Critically, this transformation plan is peaceful, proactive and progressive and stands in great contrast to other political movements in the region.
For more information on the Vision 2030 transformation plan or to understand what it means for you as a potential exporter to the Kingdom please contact us