RIYADH (AFP) – Saudi Arabia announced plans on Tuesday to pump investments worth USD3.2 trillion into the national economy by 2030, roping in the oil-reliant kingdom’s biggest companies in a major new economic diversification push.
The announcement by Crown Prince Mohammed bin Salman underscores an effort to jumpstart the domestic economy as the top crude exporter battles high youth unemployment and a coronavirus-triggered downturn.
“The total investment injected… into the national economy is expected to reach SAR12 trillion (USD3.2 trillion) by 2030,” Prince Mohammed said in a speech carried by state television.
Twenty-four of the kingdom’s biggest companies, including energy giant Aramco and petrochemical firm SABIC, will lead the investment drive by contributing SAR5 trillion over the next decade, the crown prince told reporters later at a virtual briefing.
He said the companies, many of them listed, had agreed to lower their dividends and redirect the money into the domestic economy in exchange for incentives such as subsidies.
The Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, will provide SAR3 trillion.
And the remaining SAR4 trillion will come from a new “national investment strategy”, which will soon be announced, Prince Mohammed said.
The initiative will help boost economic growth, create hundreds of thousands of new jobs and strengthen the private sector, he added.
The programme is part of a mammoth SAR27 trillion (USD7 trillion) investment plan over the next decade, which will include huge government spending to spur the domestic economy, the prince said.
It is designed to “promote the development and diversification of the national economy”, the state-run SPA news agency said, adding that it will “strengthen cooperation between public and private sectors”.
But the investment push should be “taken with a grain of salt”, said president of Transversal Consulting and author of the book Saudi Inc Ellen Wald.
“It doesn’t help grow the private sector to compel nominally private sector companies to invest in government programmes at the expense of their shareholders or investment in their own endeavours,” Wald told AFP.
The announcement comes after the crown prince said in January that the PIF would invest USD40 billion annually in the domestic economy over the next five years.