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Saudi Arabia’s Vision 2030

Guiding Principle
The Saudi Council of Economic and Development Affairs chaired by the Deputy Crown Prince Mohammad bin Salman Al Saud presented a new vision for the future of Saudi Arabia. The new vision “Saudi Arabia’s Vision 2030” as approved by the Saudi Council of Ministries on April 2016 is based on three pillars: The first that Saudi Arabia is the heart of the Arab and Islamic Worlds. The second pillar is turning Saudi Arabia into global investment powerhouse. The third pillar is transforming the location of Saudi Arabia into a global hub connecting three continents, Asia, Europe and Africa.

A. The Targets of the Vision
The Vision’s target is – by or before 2030 – to double the capacity of Saudi Arabia in transferring ARAMCO[1] into an industrial giant working around the world, transferring the Saudi Public Investment Fund (PIF)[2] into the largest sovereign wealth fund in the world, stimulating major Saudi companies into being multinational corporations. The vision further targets to manufacture half of the military needs of the Saudi Army inside the Kingdom.

The Vision includes reducing the bureaucratic procedures, expanding serving the electronic services. Adopting transparency by having a centre measuring the performance of the government agencies.

B. Vision Themes

   I. A Vibrant Society
In the last decade, the number of Umrah[3] visitors entering the country from abroad has tripled, reaching 8 million people. The Vision targets increasing the number of Umrah visitors to reach 30 million people and to at least double the number of archaeological sites registered in UNESCO. This in addition to building the largest Islamic museum in the world.

In this context, the Saudi Government have recently begun a third expansion to the Two Holy Mosques, as well as modernizing and increasing the capacities of the airports. Saudi Arabia has launched the Makkah Metro project to complement the railroad and train projects that will serve visitors to the Holy Mosques and holy sites. The Kingdom have reinforced the network of its transport system to facilitate access and help pilgrims perform their visits with greater ease and convenience. At the same time, we will enrich pilgrims’ spiritual journeys and cultural experiences while in the Kingdom. The Saudi Government plan to establish more museums, prepare new tourist and historical sites and cultural venues, and improve the pilgrimage experience within the Kingdom.

The Vision targets via this theme to classify three of the Saudi cities amongst the best 100 cities in the world, increase the spending of the Saudi families on culture and entertainment to 6%.

   II. A Thriving Economy
The Saudi government have begun expanding its investments into additional sectors to the oil and gas. This will be done by supporting promising sectors and foster their success so that they become new pillars of the Saudi economy.

In the manufacturing sector, the Saudi government will work towards localizing renewable energy and industrial equipment sectors. In the tourism and leisure sectors, Saudi Arabia will create attractions that are of the highest international standards, improve visa issuance procedures for visitors, and prepare and develop the historical and heritage sites.

In technology, the Saudi government will increase its investments in, and lead, the digital economy. In mining, Saudi Arabia will furnish incentives for and benefit from the exploration of the Kingdom’s mineral resources. At the same time as diversifying its economy, the Saudi government will continue to localize the oil and gas sector. As well as creating a new city dedicated to energy, Saudi Arabia will double its gas production, and construct a national gas distribution network. The Saudi Government will also make use of its global leadership and expertise in oil and petrochemicals to invest in the development of adjacent and supporting sectors.

The private sector currently contributes less than 40 percent of the Saudi GDP. To increase its long-term contribution to the economy, the Saudi government will open up new investment opportunities, facilitate investment, encourage innovation and competition and remove all obstacles preventing the private sector from playing a larger role in development.

The Saudi Government will continue to improve and reform its regulations, paving the way for investors and the private sector to acquire and deliver services – such as health care and education – that are currently provided by the public sector. Saudi Arabia will seek to shift the government’s role from providing services to one that focuses on regulating and monitoring them and we will build the capability to monitor this transition. We will seek to increase private sector contribution by encouraging investments, both local and international, in healthcare, municipal services, housing, finance, energy and so forth.

The Vision targets via this theme to raise the size of the Saudi market to the first 15th ranks globally, raise the local content at the Oil and Gas sector from 40% to 75%, raise the assets of the PIF from 600 billion to 7 trillion Saudi Riyal[4]. The Saudi Government is committed to localize the military industry in the country, increase the mining sector and the renewable power market.

   III. An Ambitious Nation
The Saudi Government promise zero tolerance for all levels of corruption, whether administrative or financial. This will acquire by adopting leading international standards and administrative practices. Saudi Arabia will set and uphold high standards of accountability. The goals, plans and performance indicators will be published so that progress and delivery can be publicly monitored. Transparency will be boosted and delays reduced by expanding online services and improving their governance standards, with the aim of becoming a global leader in e-government.

The Saudi Government will continue to build safe and sufficient strategic food reserves, to better guard against emergencies. Aquaculture will be promoted, as will strategic partnerships with countries blessed with natural resources such as fertile soil and water reserves. In Saudi Arabia, the use of water in agriculture will be prioritized for those areas with natural and renewable water sources.

The Saudi Government will deepen communication channels between government agencies on one hand and citizens and the private sector on the other. Facilitating interactive, online and smart engagement methods and ways to listen to citizens’ views, and to hear all insights and perspectives.

The Saudi government is committed for no taxes on citizens’ income or wealth, nor on basic goods. Saudi Arabia shall prudently and efficiently balance the budget, as well as diversify and maximize the revenue sources. The goal is to keep prices stable over the long term, and give Saudi citizens greater economic security.

The targets of the Vision via this theme is to increase the non-oil revenue from 163 billion to 1 trillion annually, to reach from the 80th rank at the Government Effectiveness Indicator to the 20th rank and to reach to the first 5 ranks at the e-Government Indicator.

C. Vision Map
The Saudi Government will restructure the way it works towards having more flexibility for achieving the national priorities of the Vision. This has been done by cancelling the high committees at the State and establishing two committees one for the political and security affairs and the other for the economic and development affairs.

In addition, the Saudi Government has adopted several programs including a one for achieving financial balance, another program for managing projects together with the strategic transformation program for ARAMCO and the restructuration of the PIF and the Human Capital program and others.

 


[1] Saudi Aramco, officially the Saudi Arabian Oil Company, most popularly known just as Aramco (formerly Arabian-American Oil Company), is a Saudi Arabian national petroleum and natural gas company based in Dhahran. Saudi Aramco’s value has been estimated at anywhere between US$1.25 trillion and US$10 trillion, making it the world’s most valuable company.
Saudi Aramco has both the world’s largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3), and largest daily oil production. Saudi Aramco owns, operates and develops all energy resources based in Saudi Arabia. According to a 2015 Forbes report, Aramco is said to be the world’s largest oil and gas company. For more info, please visit: https://en.wikipedia.org/wiki/Saudi_Aramco

[2] The Saudi Public Investment Fund, founded in 1971. Its main task is to invest in productive projects of a commercial nature which cannot be privately solo implemented, either due to the inexperience or inability to provide capital. The Fund turned with time into a portfolio of the State property of commercial nature. Fully owns many companies not included in the financial market, and owns majority stakes in major companies listed on the market.

[3] The ʿUmrah is a pilgrimage to Mecca, Saudi Arabia, performed by Muslims that can be undertaken at any time of the year, in contrast to the Hajj. In Arabic, Umrah means “to visit a populated place”. In the Sharia, Umrah means to perform Tawaf round the Kaaba and Sa’i between Al-Safa and Al-Marwah, after assuming Ihram (a sacred state), either from a Miqat like Zu ‘l-Hulafa, Juhfa, Qarnu ‘l-Manāzil, Yalamlam, Zāt-i-‘Irq, Ibrahīm Mursīa, or a place in Hill. It is sometimes called the ‘minor pilgrimage’ or ‘lesser pilgrimage’, the Hajj being the ‘major’ pilgrimage and which is compulsory for every able-bodied Muslim who can afford it. The Umrah is not compulsory but highly recommended. For more info, please visit: https://en.wikipedia.org/wiki/Umrah

[4] US$ 1 = SAR 3.47

 

March, 2016 Hany Kenawi
Meyer-Reumann & Partners, Saudi Office
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