Vision 2030 is the new blueprint for the development of the economy of Saudi Arabia, a country which has taken an economic battering from the collapse of the oil price in recent times, leading to a budget deficit and the first privatisations of state assets.
The plan aims to stabilise the economy and diversify its base, offsetting losses from the oil price collapse and creating new industries which will underpin a thriving society allowing the Kingdom to move ahead with its development as the Hub of the Arab World.
The Summary of Vision 2030
Saudi Arabia | Vision 2030
- The Heart of the Arab and Islamic Worlds
- Hub Connecting 3 Continents
- Investment Hub
Vision 2030 aims to create a thriving society by means of economic development with investment for long term gain, diversified economic sectors, increased international trade and the development of Saudi Arabia as a regional hub with highly developed infrastructure. The main focuses of the plan are summarised below.
1: ARAMCO Privatisation
Aramco is valued at around $2 trillion and hence its partial privatisation by IPO will be one of the world's largest. It will result in the company coming under increased and continued surveillance by investors, stock markets and analysts who will seek detailed performance data.
2: Saudi Sovereign Wealth Fund
Estimated to have a value of $2 trillion, the Saudi fund will be the largest in the Middle East dwarfing the funds of Qatar and Abu Dhabi and the largest sovereign wealth fund in the world. It will hold state assets including Aramco, property and land. The fund aims to generate $100 billion of revenue to get the Saudi economy of oil dependency.
The Saudi Government aims to control defence spending and manufacture more parts locally. Waste will be cut and budgets consolidated. Simple manufacturing will be started to produce basic ammunition and armoured vehicles with the goal of expansion to manufacture of military aircraft.
4: FOREIGN INVESTMENT
Foreign direct investment should be increased from 3.8% to 5.7% of economic output. This will require sound financial infrastructure with advanced financial and capital markets and easier routes to privatisation of state assets.
5: SPECIAL ZONES
King Abdullah Financial District, a $10 billion financial hub under construction, will be transformed into a “special zone that has competitive regulations and procedures, with visa exemptions and directly connected to the King Khaled International Airport," according to the vision document.
The government will also establish other special zones in logistics, tourism, industry and finance with ”special commercial regulations to boost investment opportunities,” the document says.
The government will work to "salvage" and "revamp" economic cities projects executed over the past decade that "did not realize their potential."
6: SOCIAL GOALS
The kingdom wants to reduce unemployment among Saudis to 7 percent from 11.6 percent.
Revamping the education system will be a key component of the plan and the educational system will be restructured to mesh with the vision.
The kingdom plans to raise home-ownership rate to 52 percent by 2020 from 47 percent currently.
The government wants to increase women’s participation in the workforce from 22 percent to 30 percent. The vision does not include plans to lift the ban on women driving.
The government aims to increase the number of religious tourists who perform the Umrah pilgrimage each year from 8 million now to 30 million by 2030, according to the vision document and there are plans to target tourists in different areas: history, culture and also in some of the natural locations which have extraordinary value, especially in the Red Sea.
The plans for the development of healthcare infrastructure are set to continue and it looks as though the Kingdom will have a promising future.