Arab News Japan

Saudi Arabia’s financial reforms, set in motion by Crown Prince Mohammed bin Salman and his commitment to Vision 2030, was the focus of a study conducted by the Japanese Institute for International Monetary Affairs.

The economic shift has resulted in Saudi Arabia bypassing the economic blow that came with a plummet in oil demand due to the coronavirus pandemic.

After the launch of Vision 2030 in 2016, Saudi Arabia witnessed a 78.7% increase in non-oil revenues from SAR 186 billion ($45 billion) to SAR 332.4 billion ($88.6 billion) by the end of 2019.

Saudi Arabia has begun implementing this change and assuring economic recovery by nurturing other economic sectors, like tourism, entertainment, and sport.

Their non-oil exports like blue ammonia, sent to Japan to work towards a carbon-free energy future, feeds into Saudi Arabia’s overarching economic aim.

The industrial sector is also considered one of the most crucial, resulting in Saudi Arabia developing a ministry to manage and organize it as it plays a fundamental role in the country’s eventual independence from oil. 

Saudi Arabia’s aim is to continue to steer towards an economy not dependent on oil and increasing non-oil revenues by one trillion Saudi riyals ($266.5 billion) by 2030, made achievable if the country maintains the 22% annual revenue growth.

Although the shift from oil-dependency to various other financial revenues is undoubtedly challenging, Saudi Arabia has natural and geographic assets to lean on.

Additionally, Saudi Arabia can be considered an ideal hub for Asia, Africa, and Europe to coincide paving the way for a possible breakthrough into the logistical services sector, which is guaranteed to provide major financial support.

According to the institute, Saudi Arabia “is now paving the way for a post-oil phase by strengthening a number of important economic sectors, such as tourism, entertainment and sports, in return for smart investments in technical projects through its sovereign fund, the eighth largest sovereign fund in the world with total assets of USD 390 billion.”