Saudi Arabia adopts strategies to bring structural economic shift: Minister

Faisal Al-Ibrahim, Minister of Economy and Planning

Saudi Arabia has witnessed remarkable development since launching Vision 2030, as there have been fundamental changes in the legislative and economic regulations to promote sustainable development, Minister of Economy and Planning Faisal Al-Ibrahim said.

Speaking at the “Industrial Policies to Promote Economic Diversification” conference today, April 24, in Riyadh, he explained that the economy was previously too dependent on oil, which alone cannot achieve sustainable development over time.

The business environment has been transformed, new sectors have been created, and mega projects have been launched, such as NEOM, the Red Sea, and others, which confirms the Kingdom's commitment to diversifying the new economy.

The conference was launched by the International Monetary Fund (IMF) in cooperation with the Saudi government.

Saudi Arabia developed and enhanced flexibility and sustainability in financial policies by enabling the private and other sectors to identify challenges and restrictions to boost economic policies in diverse fields, including accelerating business growth through non-traditional goods in several sectors, modernizing infrastructure, and fostering coordination with different economies.

He expressed the Kingdom’s openness to investment strategies that enhance a resilient and sustainable economy.

Saudi Arabia adopted high-risk strategies, offering high rewards, as there will be qualitative economic, structural, and infrastructural shifts, including national capabilities, the minister stated.

The Kingdom is working in the medium term to focus on transforming sectors that represent a technological shift but are still linked to emerging or advanced capabilities, such as electronics, rubber, and others.

The country aims to achieve development in the medium term by balancing short-term profits and promoting long-term success.

In the long term, foreign investments will improve competitiveness, as Saudi Arabia seeks to achieve great achievements that extend far beyond current capabilities and require investments, massive technical transfers, and innovation, Al-Ibrahim said.

The Kingdom placed all the above as a priority for investment, he highlighted, noting that companies will be committed to these strategies and government subsidy will be conditional, as progress must be measurable.

The Ministry conducted a number of economic studies aimed at diversifying the economy by developing objectives for all sectors, raising complexity levels, and studying emerging economies to enhance the Kingdom’s opportunities.

The ministry adopted a regional approach focusing on national advantages and diversifying economies.

These studies concluded that sustainable economic development required adopting a model based on diversifying the investment basket, by focusing on high-value goods, compared to simplified manufactured goods, the minister said.

However, economic diversification faces significant challenges due to production costs, investment challenges, and constraints in research and development, among other things, Al-Ibrahim said.