Saudi Arabia recently unveiled a $19 billion investment strategy “to bolster private-sector growth, with money to support housing construction as well as fee waivers for small businesses.” The plan was presented by Commerce and Investment Minister Majid Al-Qasabi and is part of a greater four year $53 billion plan to both directly and indirectly result in job creation. The program contains a stimulus package containing 17 separate initiatives by the government leading into the kingdom’s Vision 2030 economic transformation plan.
According to Bloomberg, “Saudi authorities are trying to revive an economy battered by the slump in crude prices and government spending cuts, which caused non-oil growth to stagnate. To wean the kingdom off its dependence on fossil fuels, Crown Prince Mohammed bin Salman is opening up mining, logistics, tourism and other industries to investment. Under the direction of Al-Qasabi’s ministry, the government is also drafting new laws to attract capital.”
- 21 billion riyals for housing
- 14 billion riyals for efficient home design and engineering
- 5 billion riyals for an export-import bank
- 5 billion riyals for an investment program
- 2.6 billion riyals for broadband and fiber optics
In addition to growing industries outside the oil and gas market, the kingdom is also looking to insert new laws to help it’s corporations run more efficiently. For example. Saudia Arabia has “never had a comprehensive law governing bankruptcies, leaving both borrowers and creditors in limbo. Al-Qasabi said he expects a bankruptcy law to be in place in about three months, and separate laws for commercial asset-based financing and franchising within six months.” This new direction may be a positive one, but for now financial markets are holding back until progress is made. Still looking to rely on other markets outside of energy is a smart strategy for the future.