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Thriving Economy

Rewarding opportunities
Open for business
Investing for the future
Leveraging its unique position

Rewarding opportunities

Continued investment in education and training is essential so that our young men and women are equipped for the jobs of the future.
We are focused on developing early childhood education, refining our national curriculum and training our teachers and educational leaders. We are also redoubling our efforts to ensure that the outcomes of our education system are in line with market needs.
To achieve this:
1. We have launched the National Labor Gateway (TAQAT), and will establish sector councils to identify the skills and knowledge required for the jobs of tomorrow
2. We will also expand vocational training
3. Our scholarship opportunities will be steered towards prestigious international universities and focus on areas of national priority
4. We will also focus on innovation in advanced technologies and entrepreneurship
Small and medium-sized enterprises (SMEs) are among the most important agents of economic growth; they create jobs, support innovation and boost exports.
To strengthen the contribution of SMEs to our GDP, we are encouraging SME entrepreneurship, privatization and investments in new industries.
As a result, we are establishing the SME Authority to support aspiring entrepreneurs through business-friendly regulations, easier access to funding and international partnerships, and a greater share of national procurement and government bids. We are also focused on helping SME’s exploit the benefits of digital technology and social media, enabling microfinance and helping develop the capabilities of the non-profit sector.
Our economy will provide opportunities for everyone – men and women, young and old – so they contribute to the best of their abilities.
Lifelong training and developing a high performance culture in the workplace are key priorities coordinated by the Job Creation and Anti-Unemployment Commission.
While many countries are confronted with the challenges of aging populations, more than half of the Saudi population is below the age of 25 years. We will exploit this demographic dividend through expanded opportunities for entrepreneurship and enterprise.
Saudi women are another important and, until recently, untapped asset. With over 50 percent of our university graduates being female, we are directing significant investment toward unlocking their talents and supporting their contribution to the Kingdom’s economic growth.
We are also taking steps to ensure citizens with disabilities have the same access to education and job opportunities as others, helping them to live independent lives fully integrated into Saudi society.
To meet our growth ambitions and encourage international investment, we must attract the right skills both from within the Kingdom and beyond our borders.
In our efforts to attract and retain world-class Saudi and foreign talent, we will take the steps necessary to provide them with a world-class quality of life by, for example, encouraging home ownership for non-Saudis, establishing more private schools, and adopting an effective and simple system for issuing visas and residence permits.

OUR COMMITMENTS

An education that contributes to economic growth

By the year 2030, we aim to have at least five Saudi universities among the top 200 universities in international rankings.

To this end, we will update our curriculum so that we close the gap between what students currently learn and the changing requirements of the job market.  This will involve working closely with the private sector to ensure higher education outcomes are in line with the requirements of the job market.  We are investing in strategic partnerships with apprenticeship providers, new skills councils from industry, and large enterprises.

We will also track and report on our progress and build a centralized student database that will follow students from early childhood through to K-12 and beyond to improve education planning, monitoring, evaluation, and outcomes.
A bigger role for small and medium-sized enterprises

We aim to grow the GDP contribution of small and medium-sized enterprises (SMEs) to the level of advanced economies by reducing bureaucracy while helping them attract the necessary skills, capabilities and funding.  Key to changing this is encouraging our financial institutions to allocate up to 20 percent of overall funding to SMEs by 2030.

In addition, the SME Authority has been mandated to review all laws and regulations, remove obstacles and facilitate access to funding, and enable youth and entrepreneurs to market their ideas and products.  Additional new business incubators, specialized training institutions and venture capital funds are also being established in order to aid entrepreneurs in developing their skills and networks.

SMEs will also receive support in marketing and exporting their products and services, with a focus on e-commerce and collaboration with international stakeholders. 

Open for business

We will continue to pursue public-private partnerships, facilitate the flow of private investment and improve our competitiveness. To achieve this, we are:
1. Developing the necessary capabilities to increase the quality and reliability of our services.
2. Coordinating with legislative authorities to review current regulations with the aim of improving the business environment and enforcing contracts.
3. Strategically capitalizing on the government’s reserves of real estate.
4. Allocating prime areas within cities for educational institutions, retail and entertainment centers, and industrial projects while dedicating large areas along our coasts to tourism projects.
5. Enabling banks and other financial institutions to adapt their financial products and services to the needs of each sector, ranging from large project capital funding to short-term working capital for small businesses.
6. Facilitating and expediting licensing procedures based on our national economic priorities.
7. Enforcing international legal and commercial regulations to create a business environment conducive to long-term investment.
8. Striving to facilitate the movement of people and goods, and to simplify customs procedures at our ports.
By taking these steps, we create an environment attractive to both local and foreign investors.
We are conscious that the economic city projects of the last decade have yet to realize their full potential.
In a similar way in which we have worked with Aramco to restructure Jizan Economic City, we will also strive to resurrect other projects that offer clear potential for economic impact.
To achieve this, we will work with the controlling entities to revamp and transfer vital facilities. Our aim is for these cities to contribute to the development of the economy and attract quality investments, as well as local and international talent in keeping with our priorities.
We will create special zones in exceptional and competitive locations.
Based on the comparative advantages of the Kingdom’s different regions, we are assessing their feasibility for developing new growth sectors. Special zones for logistics, tourism, industrial development and financial services are being established. Special regulations to boost investment possibilities and diversify government revenues will be applied to these zones.
We plan to raise the efficiency of the government’s support system and make the best use of its benefits by redirecting it at targeted eligible citizens and economic sectors.
For example, subsidies without clear eligibility criteria often create obstacles to competitiveness, particularly in the energy sector. Free market prices will, in the long term, stimulate productivity and competitiveness among utility companies and open the door to investment and diversification of the energy mix in the Kingdom.
We will also seek to set clear subsidy criteria based on the maturity of economic sectors, their ability to compete locally and internationally and their actual need for subsidies, without endangering promising and strategic sectors.

OUR COMMITMENTS

A restructured King Abdullah Financial District

Despite high ambitions for the King Abdullah Financial District, ongoing challenges with respect to its overall feasibility combined with the decision to develop the project in a single phase – resulting in substantially higher construction costs, prolonged delays, and a large oversupply of commercial space –limited its ability to realize its potential.
With these challenges in mind, we designed a new strategy for the district in order to elevate the potential for profitability and success.
We are planning to transform the district into an integrated and attractive living and working environment with a broader residential, hospitality, retail and commercial real estate mix.  a special zone that offers competitive regulations and procedures, with visa exemptions, and is directly connected to the King Khaled International Airport.
The district will be the headquarters of the Public Investment Fund, the largest sovereign wealth fund.
 
A flourishing retail sector

Over the past decade, the retail sector has achieved annual growth above 10 percent.  While it currently employs 1.5 million workers, only 0.3 million of those employees are Saudis.
We commit to provide job opportunities across all regions of the country for an additional million Saudis by 2020.  We will do this by building a retail sector that attracts modern, local, regional, and international brands.
In addition, we will expand the role of e-commerce to 80 percent of the retail sector by 2020
This will be achieved by attracting both regional and international retail investors and by easing restrictions on ownership and foreign investment.  To this end, we will facilitate local and regional flow
of goods and develop necessary sectoral regulations.  We will also increase financing of small retail enterprises to stimulate their growth and development.
A developed digital infrastructure

A sophisticated digital infrastructure is essential to today’s advanced industrial activities.  It attracts investors and enhances the fundamental competitiveness of the Saudi economy.
We will partner with the private sector to develop the telecommunications and information technology infrastructure – especially high-speed broadband – expanding its coverage and capacity within and around cities and improving its quality.
Specifically, our goal is to exceed 90 percent housing coverage in densely populated cities and 66 percent in other urban zones
We are also developing building standards to facilitate the extension of broadband networks and   strengthen the governance of digital transformation through a national council.
 

Investing for the future

The ongoing privatization of state-owned assets, including leading companies, property and other assets, will bring in new and more diverse revenues for the Saudi government.
To achieve our ambition of making the Public Investment Fund the largest sovereign wealth fund in the world, we are increasing the efficiency of the Public Investment fund’s management with the aim of improving its return on investment while diversifying our government resources and economy.
Rather than compete with the private sector, the Public Investment Fund is now helping to unlock strategic sectors requiring intensive capital inputs. This will contribute towards developing entirely new economic sectors and establishing durable national corporations.
We are also maximizing our investment capabilities by taking equity in large international companies and emerging technologies from around the world.
In parallel, we are developing a mature capital market to further drive investment and spur economic growth. This includes offering a wider range of financial instruments including derivatives, facilitating the process of listing private Saudi companies and state-owned enterprises, including Aramco, deepening liquidity in our capital markets and fortifying the role of the debt market.
Launching new growth sectors
We are supporting promising sectors and fostering their success so that they become new pillars of our economy.
1. In manufacturing, we are working toward localizing the renewable energy and industrial equipment sectors
2. In the tourism and leisure sectors, we are creating world-class attractions, improving visa issuance procedures for visitors, and developing our historical and heritage sites
3. In technology, we are increasing our digital economy investments
4. In mining, we are creating incentives that will allow the Kingdom to benefit from the exploration of its mineral resources
5. At the same time as diversifying our economy, we continue to localize the oil and gas sector. As well as creating a new city dedicated to energy, we aim to double our gas production, and construct a national gas distribution network.
6. We will also make use of our global leadership and expertise in oil and petrochemicals to invest in the development of adjacent and supporting sectors.
To build on the private sector’s current 40 percent contribution to GDP, we are opening up new investment opportunities, encouraging innovation and competition, and removing obstacles preventing the private sector from playing a larger role in delivering national services.
We will continue to improve and reform regulations, paving the way for investors and the private sector to acquire and deliver services – such as health care and education – currently provided by the public sector.
We are shifting the government’s role from providing services to one that focuses on regulating and monitoring them. We are aiming to increase private sector contribution by encouraging investments, both local and international, in healthcare, municipal services, housing, finance, energy and others.

OUR COMMITMENTS

Localized defense industries

Localizing the Kingdom’s defense industries not only reduces our military spending, it also stimulates development and growth of other industrial sectors such as industrial equipment, communications and information technology, which in turn creates more job.
Our aim is to increase the amount of military spending within the Kingdom – currently at 2 percent of our total defense spending – to more than 50 percent by 2030.  This is already underway in less complex industries such as those providing spare parts, armored vehicles and basic ammunition.  However, our goal is to expand into higher value and more complex equipment such as military aircraft.
We are moving forward on developing an integrated national network of services and supporting industries that will improve our self-sufficiency and strengthen our defense exports, both regionally and internationally.
Localization will be achieved through direct investments and strategic partnerships with leading companies in the sector.  These moves will transfer knowledge and technology, and build national expertise in the fields of manufacturing, maintenance, repair, research and development
A mining sector contributing to the national economy at full potential

The Kingdom is blessed with rich mineral resources such as aluminum, phosphate, gold, copper, uranium and other raw materials.
By 2020, we are targeting the mining sector contributing SAR 97 billion while creating 90,000 job opportunities.
We are also moving forward on a number of structural reforms – stimulating private sector investments by intensifying exploration, building a comprehensive database of the Kingdom’s resources, reviewing the licensing procedures for extraction, investing in infrastructure, developing funding methods and establishing centers of excellence.
Strategic international partnerships will raise the competitiveness and productivity of our national companies, thereby boosting their contribution to the sector’s growth, while increasing localization of knowledge and expertise.
A renewable energy market

The Kingdom’s impressive natural potential for solar and wind power generation remains largely untapped.
To build the sector, we aim to generate 9.5 gigawatts of renewable energy by 2030. We will also seek to localize a significant portion of the renewable energy value chain in the Saudi economy, including research and development, and manufacturing.
Our leadership in areas such as silica and petrochemicals, and our legacy strength in the production of different forms of energy, reinforces the high potential for success which will be activated through the launch of the King Salman Renewable Energy Initiative.
Legal and regulatory frameworks that allows the private sector to buy and invest in the renewable energy sector are being reviewed.  We are also encouraging public-private partnerships to localize the industry and produce the necessary skill-sets.  Finally, we will guarantee the competitiveness of renewable energy through the gradual liberalization of the fuels market.
 

Leveraging its unique position

The Kingdom is already investing significantly in the construction of ports, railways, roads and airports.
To take full advantage of these investments, we plan to work with the private sector and develop international partnerships to finalize, improve and link our infrastructure internally and across borders.
Technologies and systems are being deployed to increase the efficiency, performance, and governance of our logistics infrastructure. At the same time, we will also strengthen our legal and regulatory framework.
Links between existing trade hubs will be reinforced, and new trade routes will be opened by encouraging air, maritime, and other transport operators to optimize capacity. This will reinforce our position as a distinctive logistics gateway to three continents.
With a GDP of SAR 2.4 trillion, our economy is already the largest in the Middle East.
We enjoy close economic ties with the Gulf Cooperation Council and other Arab countries, as well as constructive relations with Islamic and foreign countries. To capitalize on these ties, we will seek to establish new business partnerships and facilitate a smoother flow of goods, people and capital.
We will also seek to effectively link with other countries in the region, through enhanced logistics services and new cross-border infrastructure projects, including land transport projects with Africa through Egypt.
Rather than attempting to compete across all sectors, we will focus our efforts on those that reflect our comparative advantages and national strengths.
To begin, we are supporting major national companies who are already leaders in their sector, including those in the oil, petrochemicals, banking, telecommunications, food, health care, and retail segments. We are also seeking to support Saudi companies with high potential to develop into regional and global leaders. Finally, we will support our national industries, assisting them to market themselves abroad and to export their products.