Saudi Arabia plans economic overhaul with $ 3.2 trillion investment

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Saudi Arabia plans economic overhaul with $ 3.2 trillion investment


Riyadh (AFP)

Saudi Arabia on Tuesday announced plans to inject $ 3.2 trillion in new investment into the national economy by 2030, as the top crude exporter steps up efforts to diversify the economy.

The announcement by Crown Prince Mohammed bin Salman, de facto leader, underscores a desire to revive the national economy as OPEC’s kingpin battles high youth unemployment and a downturn triggered by the coronavirus.

“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 broadcast by state television.

This amount includes three trillion riyals from the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund.

Twenty-four of the kingdom’s largest companies, including energy giant Aramco and petrochemical company SABIC, will contribute five trillion riyals over the next decade, the crown prince told reporters later in the report. a virtual briefing.

He said the companies, many of which were listed, had agreed to cut dividends and redirect money to the domestic economy in return for incentives such as subsidies.

The remaining four trillion riyals will come from a new “national investment strategy”, which will be announced soon, the prince said.

The initiative will help boost economic growth, create hundreds of thousands of new jobs and strengthen the private sector, Prince Mohammed added.

The program is part of a massive 27 trillion riyal ($ 7 trillion) investment plan over the next decade that will include huge government spending to boost the national economy, the prince said.

The announcement comes after the crown prince said in January that the PIF will invest $ 40 billion a year in the national economy over the next five years.

The kingdom is pushing to stimulate job creation and revive businesses decimated by the pandemic.

Unemployment in Saudi Arabia reached 14.9% in the third quarter of 2020, down slightly from an all-time high of 15.4% in the previous quarter, according to official data.

Last year, the double shock of the pandemic and falling oil prices prompted the petro-state to triple its value-added tax and suspend a monthly allowance to civil servants to contain a skyrocketing budget deficit.

Saudi Arabia, the largest Arab economy, is struggling to attract foreign investment, a key pillar of the Crown Prince’s “Vision 2030” economic diversification plan to boost non-oil revenues.

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