A recent study has called on assessing the economic reform journey Saudi Arabia has been embarking on in line with its Vision 2030, which Crown Prince Mohammed bin Salman adopted in 2016.
The study highlighted the achieved progress, especially at the level of major strategic gains, the implementation of megaprojects, and the maturity of general economic policy orientations.
In an analytical review of the Kingdom’s Vision 2030, international economists said Saudi Arabia has witnessed the most difficult economic challenges in its modern history following the collapse of global oil prices in the summer of 2014.
The formulation of the highly ambitious economic reform plan adopted appeared to reduce the Kingdom’s dependence on oil by empowering the private sector.
According to Stephen Grand and Katherine Wolff from the Atlantic Council, – a US non-profit organization that researches economic and political dynamics in the Middle East region -- the Saudi government has made tremendous efforts to attain its vision’s objectives.
They pointed out that the full image of the dual crises that affected the Saudi economy has not yet emerged in light of the effects of the novel coronavirus.
“Saudi Arabia now faces another economic crisis, only six years after the 2014 oil price collapse, and it may feel the need to reevaluate some of its Vision 2030 programs,” the writers noted.
They pointed out that the vision relies on massive government spending and the ability to attract foreign capital, particularly in areas like the Public Investment Fund (PIF)-funded megaprojects; both spending and investments are likely to be impacted by the current crisis.
Despite the International Monetary Fund’s (IMF) prediction that Saudi Arabia’s economy may contract by 2.3 percent in 2020, and the nonoil GDP may slow by four percent, they affirmed that Saudi Arabia has already identified the fundamental reforms required for the Kingdom’s long-term economic health, and “it has begun the work of implementing many of them.”
“The Vision’s core tenets still ring true and are based on the need for job creation, bolstering the private sector, diversifying the economy, and investing in sectors where Saudi Arabia can be globally competitive.”
Grand and Wolff urged the Saudi government to find sectors where Saudi Arabia can compete globally and enable the entrepreneurial capacities of its citizens.
“To achieve these goals, Saudi Arabia should turn away from megaprojects and a completely top-down approach, and make serious commitments to education and human capital development, to ceding space in the economy to the private sector, to continuing improvements in the regulatory environment and finally to greater transparency and rule of law,” they said.
