🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Saudi Arabia pushes ahead with economic transformation, minister says

Published 10/30/2024, 06:14 AM
Updated 10/30/2024, 10:46 AM
© Reuters. Delegates walk at the venue of the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024. REUTERS/Hamad I Mohammed
9984
-
UBER
-

By Yousef Saba, Pesha Magid and Federico Maccioni

RIYADH (Reuters) -Saudi Arabia is "doubling down" on its multi-billion dollar plan to overhaul its economy and cut the kingdom's dependence on oil rents, the finance minister told an investor summit in Riyadh on Wednesday.

The government is investing heavily in infrastructure works such as the vast mega-city NEOM project under the plan driven by Crown Prince Mohammed bin Salman, who wants to grow the private sector, develop new industries and create thousands of jobs.

"Overall, we are very, very excited and happy with what we have achieved with Saudi Vision 2030 but we are not complacent. We are doubling down, making sure we are doing the right thing," Finance Minister Mohammed Al Jadaan told the Future Investment Initiative (FII) event, saying the initiative was largely on track.

The country's $925 billion PIF sovereign wealth fund, tasked with delivering much of the transformation, has made its mark on the global stage in recent years with high-profile deals, such as investments in Uber (NYSE:UBER).

But its governor told the FII on Tuesday the PIF now plans to reduce the share of its overseas investments by about a third as it focuses on domestic projects.

Foreign direct investment (FDI), which had stalled in recent years, is key for driving the massive economic transformation.

The government has a target of attracting $100 billion in FDI by 2030, equivalent to almost 6% of its GDP. FDI is on an upward trend, but with five years to go, data indicates that the kingdom could struggle to meet the target by 2030.

Oil is still a mainstay of the economy and amid lower oil prices and production, government earnings have fallen and the kingdom is reviewing spending, under which some Vision 2030 projects will be delayed or scaled back, and others prioritised.

Jadaan told the conference human resources and implementation had been a challenge for some of the economic transformation targets, but said non-oil GDP now represented about 52% of the economy.

INVESTMENT PLEDGES

The FII, now in its eighth year, has become a major gathering of the world's financial titans.

Former U.S. Treasury Secretary Steve Mnuchin was among the speakers on Wednesday. Several Republicans and former officials of Donald Trump's administration are attending the annual summit that ends on Thursday.

Saudi Arabia's sovereign wealth fund the PIF announced that it would be an anchor investor in Brookfield's new $2 billion Middle East-focused private equity fund, while PIF-owned Riyadh Air said that it was ordering 60 Airbus A321 narrow-body jets.

The head of Saudi Arabia's mining giant Ma'aden told Reuters Saudi Arabia was in the advanced talks for a stake in a Zambian copper mine and expects a deal this year.

The kingdom's growing mining industry is a key part of the Vision 2030 plan to diversify the economy.

© Reuters. Saudi Arabia's Minister of Finance Mohammed bin Abdullah Al-Jadaan attends the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 30, 2024. REUTERS/Hamad I Mohammed

While not on the formal agenda, the conflict in Israel, Gaza and Lebanon shaped many of the discussions at the FII, with investors concerned about the impact on regional investments.

Jadaan acknowledged the conflict but said Saudi Arabia was a stable place to invest. "This is one of the brightest spots in the world in terms of what investors look for," he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.