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Saudi Vision 2030

Saudi Vision 2030 (Arabic: رؤية السعودية 2030‎) is a plan to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. Goals include reinforcing economic and investment activities, increasing non-oil industry trade between countries through goods and consumer products, and increasing government spending on the military, manufacturing equipment and ammunition.

Saudi Vision 2030
رؤية السعودية 2030
Saudi Vision 2030 logo.svg
The official logo of the project.
Development programme overview
Formed25 April 2016; 3 years ago (2016-04-25)
TypeDevelopment programme
JurisdictionGovernment of Saudi Arabia
MottoSaudi Arabia the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents
Minister responsible
Key document
Websitevision2030.gov.sa

The first details were announced on 25 April 2016 by Crown Prince Mohammad bin Salman.[1] The Council of Ministers has tasked the Council of Economic and Development Affairs (CEDA) with identifying and monitoring the mechanisms and measures crucial for the implementation of "Saudi Arabia’s Vision 2030".[2]

After the assassination of Jamal Khashoggi, it has been said that the expat community are "making a lot of public announcements about investing but nothing is happening", in addition to this, assets were moved overseas and the Gulf became unattractive to international businessmen.[3] Despite this, foreign investments in the country rose in 2018 by 110% representing double the previous year according to the minister of economy and planning [4].

DescriptionEdit

Oil comprises 30-40 percent of the real GDP of Saudi Arabia, not including the proportion of the economy that is also dependent on the oil distribution. Decreasing this dependence on oil resources has been one of the goals of the government since the 1970s, however, the implementation of this goal has been rather unstable and largely dependent on the prices of oil. The core priority is to be able to develop more alternative sources of revenue for the government such as taxes, fees and income from the sovereign wealth fund.[5] Another major aspect is to lower the dependency of the citizens of the country on public spending such as spending on subsidies, higher salaries and to increase the portion of the economy contributed by the private sector to provide more employment opportunities and to provide growth in the GDP.[6]. The goals in the Saudi vision 2030 could be compared with other development plans in the Middle East, see for example the Kuwait Vision 2035, UAE Vision and Qatar National Vision 2030.

The vision has 3 main pillars: the status of the country as the "heart of the Arab and Islamic worlds"; the determination to become a global investment powerhouse; and finally to transform the country's location into a hub connecting the 3 continents (Asia, Europe, Africa).[7]

The plan is supervised by a group of people employed under the National Center for Performance Measurement, the Delivery Unit, and the Project Management Office of the Council of Economic and Development Affairs. The National Transformation Program was designed and launched in 2016 across 24 government bodies to enhance the economic and development center.[6]

Saudi Arabia Vision 2030 lays out targets for diversification and improving competitiveness. It is built around three main themes which set out specific objectives that are to be achieved by the year of 2030.[8]

  1. A vibrant society: urbanism, culture and entertainment, sports, Umrah, UNESCO heritage sites, life expectancy.
  2. A thriving economy: Employment, women in the workforce, international competitiveness, Public Investment Fund, Foreign direct investment, private sector, non-oil exports.
  3. An ambitious nation: Non-oil revenues, government effectiveness, and e-government, household savings and income, non-profits and volunteering.

Projects and initiativesEdit

About 80 major projects are expected to be developed in Saudi Arabia by the year 2030. Most of these projects are financed by the Public Investment Fund of Saudi Arabia.[citation needed]

The PIF annually organizes an investment forum, the Future Investment Initiative or "Davos in the Desert" in context of Saudi Vision 2030 in Riyadh. However, amid the rising controversy and escalating tensions due to Saudi's involvement in Jamal Khashoggi’s disappearance, many top notch companies’ CEOs have backed out of the conference. Google Cloud, KKR & Co. L.P., Ford Motor, JPMorgan Chase, BlackRock, Uber and The Blackstone Group have all withdrawn their CEO/Chairman's names from the summit to be held on 23 October 2018.[9] Major media houses including CNN, Bloomberg, CNBC, the New York Times, Fox Business Network, the Financial Times, the Los Angeles Times and Huffington Post also withdrew as partners.[10]

National Transformation ProgramEdit

On 7 June 2016, the Saudi Council of Ministers approved the National Transformation Program which sets out the goals and targets to be achieved by the Kingdom by 2020.[11] It is the first out of three phases each lasting for five years. Each phase will contribute towards achieving a certain number of goals and targets that will eventually help the Kingdom in reaching the ultimate goals of Vision 2030. Also, to assist the Kingdom of Saudi Arabia to finance all the projects to be developed and facilitate the process of achieving the goals and targets of Vision 2030, Crown Prince Mohammad bin Salman announced, in January 2016, that an IPO of Saudi ARAMCO is going to take place. However, only 5% of the company will be offered on the stock market.[12]

In March 2019, Aramco released its financial statements revealing net income of $111.1 billion in 2018.[13] In June 2019, Financial Times reported that Aramco is striving to separate its association with the ministry, ahead of its potential listing. The company has been paying ministry-related expenses, which according to an unnamed person have been kept hidden by Aramco. The report revealed that Khalid Al-Falih has been using the company’s revenues for his expenses, which are either directly related to Aramco, or are diplomatic. However, Falih’s ally stated that the chairman’s policies have brought in greater revenues for the firm.[14]

Red Sea luxury resort projectEdit

A beach resort is proposed to be built on the Red Sea between the towns of Umluj and Al-Wajh in the northern section of the Hejazi coast.[15] The resort project will involve, "50 islands and 34,000 square kilometers in a global upmarket tourism and leisure mega-development"[15][16] and will be, "governed by laws on par with international standards." The resort will allow women to wear bikinis in the pool and beach areas.[17][18]

The two massive tourism projects along the Red Sea planned by the Saudi government were to be run under the directorship of Richard Branson. On 11 October 2018, Branson issued a statement that he is suspending his advisory role for the two projects amidst the Jamal Khashoggi controversy.[19] Branson also suspended his talks with the Saudi government about investment in his Virgin Galactic venture. He said he had "high hopes for the current government in the kingdom and its leader Crown Prince Mohammed bin Salman…the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi Government."[20]

Entertainment sectorEdit

In May 2016, a General Authority for Entertainment was announced by royal decree, into which over $2 billion have been invested. In Riyadh, the first public live music concert in over 25 years was held in May 2017, which featured American country star Toby Keith and Saudi singer Rabeh Sager.[21][22] In April 2017, the government announced a large sports, culture and entertainment complex, of 334 square kilometres (33,400 ha) at Al-Qidiya, south-west of Riyadh. The project will include a Six Flags theme park, due to open in 2022.[23] As a component of Vision 2030 there was a celebration of the 87th anniversary of the Saudi founding with concerts and performances, with women for the first time being allowed into the King Fahd International Stadium in Riyadh.[24] On March 5, 2018, a 10-year strategic multiplatform partnership between American sports entertainment company WWE and the General Sports Authority in support of Saudi Vision 2030 was announced.[25] The partnership started on April 27, 2018 with Greatest Royal Rumble at King Abdullah Sports City in Jeddah.[25]

Women's rightsEdit

In January 2013, women were announced as members of the nation's Consultative Assembly. In 2015, they were allowed to run for office in municipal elections.[26]

In early 2017, Saudi state schools announced offering physical education classes to both boys and girls starting in the fall of 2017.[27] Later that same year, the state announced allowing men and women to attend sport events, including inside sports stadiums.[28] On September 26, 2017, a royal decree granted women the right to drive vehicles, a move which would take effect in June 2018.[29]

While a few relaxations were suggested and implemented by the government for the welfare of women, more progress still needs to be made. As many women activists have been held and criminalized since 2015, without allowing access to a lawyer. The case of Israa al-Ghomgham came into light after she and her husband were arrested in December 2015 for calling the release of political prisoners and an end to anti-Shia government discrimination.[30] Saudi prosecutors are seeking death penalty for Ghomgham.[31]

In 2019, the government based web application Absher gained media attention and was criticized for tracking the movement of the women of the kingdom. The app, which promotes male guardianship system, allows men to manage women's lives digitally by specifying when and from where a woman can travel. The app also sends alerts to men's phones in case a woman uses her passport at the border.[32] The European Parliament, US Senator and US Representatives condemned the app and urged the kingdom to abolish its male guardianship system.[33][34]

Tourism VisaEdit

In compliance with Saudi vision 2030, Saudi Arabia formally announced on 27 September 2019 the issuance of the tourist visa allowing visitors from 49 countries to visit the country up to 90 days for a fee of $80. The visa can be either obtained online (eVisa) or on arrival.[35]

Other projectsEdit

Some of the other major projects to be developed are listed in the table below:

Some of the projects to be developed as a part of Vision 2030
Project Name Location Total Area (km²) Date of Announcement Expected Finish Date Cost
New Taif Project[36] Taif 1250 1 March 2017 2020 3 Billion Dollars
Diriyah Gate Project[37] Diriyah 1.5 20 July 2017 2030 Unknown
Al-Qiddiya Project[23] Al-Qiddiya, south-west of Riyadh 334 8 April 2017 2022 2.7 Billion Dollars
Al-Faisaliah project[38][39] West of Makkah 2,450 26 July 2017 First Phase will be completed by the end of 2020 Unknown
Downtown Jeddah[40] Jeddah 5.2 27 September 2017 First phase will be completed by the end of 2022 4.8 Billion Dollars
NEOM[41] Northwest of Saudi Arabia 26,500 24 October 2017 First Phase will be completed by the end of 2025 500 Billion Dollars
The Renewable Energy Project[42] Multiple Locations Unknown 27 March 2018 2030 200 Billion
Amaala Project[43] Along the Red Sea 3,800 26 September 2018 First Phase will be completed by the end of 2020 Unknown
King Salman Energy Park[44] Between Dammam and Al-Ahsa 50 5 December 2018 First Phase will be completed by the end of 2021 1.6 Billion
Al-Ula Vision[45][46] Al-`Ula 22500 11 February 2019 2030 Unknown
King Salman Park, Sports Boulevard, Green Riyadh and Riyadh Art[47][48] Riyadh +149 19 March 2019 Unknown 23 Billion
Great Mosque of Mecca[49] Mecca 250,000 2017 mid-2018 21.3 Billion Dollars
Mall of Saudi[49] Riyadh 8666,000 2017 2020 3.2 Billion Dollars
New Jeddah Downtown – Phase 1[49] Jeddah unknown 2017 unknown 2 Billion Dollars

ImplementationEdit

Vision Realization ProgramsEdit

To achieve the strategic goals and targets of vision 2030, thirteen programs called Vision Realization Programs (VRPs) were established. The VRPs were presented by Council of Economic and Development Affairs (CEDA) on Monday 24 April 2017. The VRPs are as follows:[50]

  1. Quality of Life Program.
  2. Financial Sector Development Program.
  3. Housing Program.
  4. Fiscal Balance Program.
  5. National Transformation Program.
  6. Public Investment Fund Program.
  7. Privatization Program.
  8. National Companies Promotion Program.
  9. National Industrial Development and Logistics Program.
  10. Strategic Partnerships Program.
  11. Hajj and Umrah Program.
  12. Human Capital Development Program.
  13. Saudi Character Enrichment Program.

SupervisionEdit

The plan is supervised by Crown Prince Mohammad bin Salman. Three levels ensure the application of the plan:

  • Overall, Vision 2030's directions and decision-making roles lie within a Council of Ministers and a Council of Economic and Development Affairs (CEDA).
  • CEDA's director, as well as the managers of the first 12 Vision Realization Programs, ensure the following-up of the plan on the five-year level.
  • Annually, each entity concerned in the 2030 Vision is individually responsible for its budget and objectives.[citation needed]

Government entities reconstructionEdit

To achieve the strategic objectives of Vision 2030, new government entities were created and existing entities were reconstructed and/or merged.[51]

New entity Reconstructed and/or merged from previous entity Previous entity
Council of Economic and Development Affairs (CEDA) PMO No
Delivery Unit (DU) No
National Center for Performance Management (Adaa) No
Corporate Communication Unit at CEDA (CCU) No
General Authority for Culture (GAC) No
General Authority for Entertainment of (GEA) No
Strategic Management Committee and Strategic Management Office (SMO) No
Ministry of Commerce and Investment Yes Ministry of Commerce and Industry
Ministry of Labor Ministry of Labor and Social Development Yes Ministry of Social Affairs
Ministry of Energy, Industry and Mineral Resources Yes Ministry of Petroleum and Mineral Resources and
Ministry of Environment, Water and Agriculture Ministry of Water and Electricity and Ministry of Agriculture
Ministry of Hajj and Umrah Yes Ministry of Hajj
Public Education Evaluation Commission Yes Education Evaluation Commission

Critical reactionsEdit

The IMF's country report on Saudi Arabia, launched a few months following the announcement of Vision 2030, explained that the fiscal deficit in the Saudi economy would indeed continue to narrow in 2016. It also claimed that recent, major government deposits at the Saudi Arabian Monetary Authority (SAMA) acted as policy buffers to smooth the transition that the plan is leading.[52] In 2016 the IMF publicly warned that Saudi Arabia risks having no more foreign reserve currency within a 5-year period.[53] In 2017, it projected that SAMA's net foreign assets would continue to decline, though remaining at a "comfortable level". It expects that the fiscal deficit will continue to improve over the coming years, also noting that non-performing loans remained low, despite a slight increase to 1.4 percent in 2017.[54]

Over 300 specific targets have been announced across 25 government entities via the National Transformation Plan document to reach these objectives by 2020. The National Transformation Plan brings over 150 expected initial public offerings. However, reports noted the "key person dependency" of the Vision and the NTP, with regards to Crown Prince Mohammad bin Salman.[55] Other criticisms have been regarding the lack of information about the detailed plans to accompany the intended transformation.[56]

Certain journalists speculated that the plan's goals were overly ambitious, and noted that non-oil growth so far was insufficient and would threaten the plan's successful implementation.[57][58] One report felt that despite the national plan's overall forward-thinking direction, "political reform appears to be absent from the policy agenda".[59]

Reactions were mixed following the announcement that Saudi Arabia would lift the driving ban on women.[60] Similarly to the overarching Vision 2030, some understood the announcement via royal decree as a reaction to outside pressure, while others applauded the move.[61]

According to a research paper written by Jane Kinninmont for the Middle East and North Africa Programme, from the structural disadvantages of the country such as weak institutions, inefficient bureaucracy and significant gaps between the labor force required by the labor market and the current educational system hinder some of the growth prospects of the country. Rebalancing the job market in the private sector will also prove to be a challenge since it is currently majority staffed by expatriates. One of the difficulties is that the private sector has lower paying salaries and expats are easier to hire and fire. Currently twice as many Saudi nationals work in the public sector than in the private sector. The challenge lies in getting a larger portion of the nationals to accept lower paying jobs that could require higher working hours than that of the public sector. Another aspect to be considered is moving the private sector away from the business activities that require very low-cost labor.[5]

According to Hilal Khashan from the American conservative think tank Middle East Forum, to have the 2030 plan succeed ignoring the relationship between economic and political development is no longer a viable option, the developments required to increase the GDP as planned will encourage the breakage of the tribal system taking place. Another aspect is the "zero tolerance to corruption" that may be very difficult to achieve with a "society where family, tribal, and regional ties are stronger than the nebulous conception of state identity".[62]

See alsoEdit

ReferencesEdit

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External linksEdit