Saudi Arabia plans economic overhaul with $3.2trln investment

RIYADH: Saudi Arabia announced plans Tuesday to pump investments worth $3.2 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 de facto ruler 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 12 trillion riyals ($3.2 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 five trillion riyals 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 three trillion riyals.

And the remaining four trillion riyals 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 27 trillion-riyal ($7 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”. The announcement comes after the crown prince said in January that the PIF would invest $40 billion annually in the domestic economy over the next five years.