Crown Prince says Saudi economic growth to accelerate after COVID-19

Saudi Arabia is working hard on doubling the size of economy and diversifying it away from oil, Crown Prince Mohammed bin Salman said in a speech to the Shura Council on Thursday.
 

“We are more optimistic that the Saudi economic growth will accelerate when the coronavirus pandemic comes to an end and see normalization, to rank among the G20 fastest growing economies in terms of non-oil GDP growth in the next years,” Prince Mohammed said.
 

To this end, non-oil gross domestic product (GDP) is the key indicator for the success of the Kingdom’s economic plans, as GDP is normally affected by volatility in oil production, for which the government is not the key driver.
 

The Kingdom also placed unemployment among its top priorities. The government has prioritized increasing employment rates. Saudi Arabia aims to cut unemployment to 7% in 2030. In line with Vision 2030, Saudi Arabia has started labor market reforms to provide more job opportunities for nationals.
 

In 2018, unemployment rate reached almost 13%. However, the rate decreased gradually to 11.8% in early 2020, due to the government efficiency, the Public Investment Fund’s (PIF) programs along with other initiatives. By the end of 2020, Saudi Arabia will have the lowest unemployment rate among the G20 countries affected by the coronavirus pandemic, where unemployment rose from 15% to 20%.
 

The programs and policies adopted by the government will help us reach an unemployment rate of 7% by 2030. Females account for 64% of the unemployment ratio in the Kingdom, he added, affirming, “Our next target is to improve nationals’ income.”

Commenting on the PIF contribution to the Kingdom’s economic development, Prince Mohammed said that the PIF has become a key driver for the Kingdom’s economic growth.
 

The Saudi sovereign wealth fund’s assets were doubled from SAR 560 billion to over SAR 1.3 trillion. The Kingdom is on track to achieve Vision 2030, and have the PIF assets exceeding SAR 7 trillion.
 

“We can imagine the Saudi economy without the PIF investments, which stood at SAR 78 billion in 2017, SAR 79 billion in 2018 and SAR 58 billion in 2019. We target SAR 96 billion investments in 2020, so that the fund’s total investments will reach SAR 311 billion over the four-year period,” Prince Mohammed pointed out.
 

This in turn created more than 190,000 job opportunities, the Saudi Crown Prince added, noting that the PIF’s local investments in sector development has not crossed SAR 3 billion before 2017. In 2020 and 2021, the fund will inject nearly SAR 150 billion annually in the Kingdom’s economy, ahead of increasing this contribution annually until 2030.
 

“This liquidity will be provided through liquidating and recycling the PIF investments to seek new opportunities, as well as creating a local economic cycle that give rise to new sectors and provide fresh revenue to the state,” Prince Mohammed commented.
 

Saudi Arabia is witnessing a quality shift in new promising sectors, thanks to its great cultural legacy, as well as its geographic and demographic diversification.
 

On corruption, Prince Mohammed said that although corruption had been rife in the Kingdom and previously spread like “cancer,” consuming from 5% to 15% of the state budget. The anti-corruption campaign has been very successful and has recovered SAR 247 billion riyals in the last three years, representing 20% of the Kingdom’s total non-oil revenue. In addition, assets worth tens of billions were transferred to the Ministry of Finance, which will be recognized in revenues when liquidated.

Moreover, Prince Mohammed said the Kingdom would continue to strike with an iron fist those who threatened its security and stability.
 

"We will continue to hit with an iron fist against anyone who thinks of threatening our security and stability," the Crown Prince was quoted as saying.
 

For expat rights, Prince Mohammed said, “We have taken several measures to enhance the contractual relationship between workers and employers… We also worked on reforming the conditions of almost SAR 500,000 expats to attract value-added labor force.”
 

An initiative was launched to enhance this contractual relationship and give foreign workers more freedom with respect to job mobility.
 

“This initiative is expected to boost workers’ productivity and enhance competitiveness in the Saudi economy,” Prince Mohammed noted.