With the oil industry ultimately being unsustainable, Saudi Arabia faces the imminent threats of a sharp increase in unemployment, an overall decline in household incomes, and a lasting deterioration in public finance. Thus, the Saudi government has realized the importance of diversifying its economy and shifting the baton of growth to the private sector essential in creating future job opportunities.
The Thriving Economy agenda is one of the three pillars of the Saudi Vision 2030, which aims to develop a dynamic and prosperous economy involving a reduction in historical dependence on oil. Here, we take a look at how Saudi Vision 2030 may affect the country’s economy.
Tourism will flourish
With the objective of attracting 100 million tourists in 2030, including 55 million international visitors and 45 million domestic visitors, the Saudi government has taken steps and laid out plans to significantly boost the demand for tourism in the coming years.
One of the ways of doing so is to present the country as a more open and tolerant destination by dramatically developing its tourism industry. Among others, Saudi Arabia has quite recently announced its plans of launching a new national airline which will operate alongside existing budget airlines such as Flynas.
Mega tourism projects are also being carried out in key locations across the kingdom. Billions of dollars are being poured into ambitious projects such as the Red Sea Project, the Amaala Project, and the construction of the futuristic city of NEOM.
In the not-so-distant future, expect Saudi Arabia to welcome scores of international travellers visiting the country on non-business or pilgrimage-related visits.
Business-friendly economy
A key focus for Vision 2030 is creating an environment that unlocks business opportunities, broadens the economic base, and creates jobs for all Saudis. Saudi Arabia intends to achieve this by leveraging its unique location and potential, attracting the best talent, and increasing global investment.
The Saudis’ efforts have indeed bore fruit. According to the World Bank’s Ease of Doing Business Index, a ranking of the business-friendliness of economies, Saudi Arabia had made a huge leap from 92nd place in 2019 to 62nd place in 2020, rendering Saudi Arabia the world’s top improver.
The further implementation of the Saudi reform projects will present investment and market entry opportunities for foreign companies and investors willing to get involved in Saudi Arabia. The Saudi Vision 2030 funding initiatives have created the necessary framework to provide planning and investment security for the next five to ten years.
Better access to housing programs
One of the goals of Saudi Vision 2030 is to increase the percentage of Saudi homeowners to 70 percent in 2030 (up from 50 percent in 2016).
To achieve this objective, several initiatives have been put in place including improved financing for the purchase of real estate, construction of housing adapted to all income categories, revising real estate law, and improving the quality of housing-related services. The private sector is encouraged to carry out real estate projects at attractive interest rates.
The program has been considered a success with the rate of Saudi households owning their homes reaching 60 percent in 2020, which is a 13 percent increase compared to 2017.
Through the housing program, the Saudi government has made it clear that the issues of quality of life, as well as environmental sustainability, are clear priorities of the Saudi Vision 2030.
