Since Mohammed bin Salman (MBS) became Crown Prince of Saudi Arabia in 2017, the kingdom has witnessed significant economic transformations aimed at reducing its dependence on oil, diversifying the economy, and attracting foreign investment. Here are the key economic milestones achieved under MBS, supported by figures and statistics.
One of the most ambitious initiatives launched by MBS is Vision 2030, unveiled on April 25, 2016. This comprehensive plan aims to diversify Saudi Arabia’s economy away from oil dependency, develop public service sectors such as health, education, infrastructure, recreation, and tourism, and promote a more sustainable and inclusive economic model. Vision 2030 set a target for non-oil revenue to increase from SAR 163 billion ($43.4 billion) in 2016 to SAR 1 trillion ($267 billion) by 2030.
A landmark event in Saudi economic history was the initial public offering (IPO) of Saudi Aramco in December 2019. The IPO raised $25.6 billion, making it the largest in history. The valuation of Aramco reached $1.7 trillion, highlighting the kingdom’s ability to leverage its vast oil reserves to attract substantial foreign investment. The funds raised are being channeled into the Public Investment Fund (PIF) to finance the diversification efforts outlined in Vision 2030.
The PIF has become a cornerstone of MBS’s economic strategy, with its assets growing from $150 billion in 2015 to over $400 billion by 2020. The goal is to expand the fund’s assets to $2 trillion by 2030. The PIF has invested in various sectors, including technology, entertainment, and renewable energy. Notable investments include a $3.5 billion stake in Uber and significant contributions to the SoftBank Vision Fund, which invests in high-tech and AI companies globally.
Saudi Arabia has made significant strides in developing its tourism and entertainment sectors. In 2019, the kingdom issued its first tourist visas, aiming to attract 100 million annual visits by 2030. The Red Sea Project, an ambitious luxury tourism development, is expected to contribute SAR 22 billion ($5.9 billion) annually to the GDP upon completion. Additionally, the kingdom has hosted major international events, such as the Dakar Rally and the Saudi Cup, the world’s richest horse race, enhancing its global profile and tourism appeal.
Under MBS, significant reforms have been implemented to increase women’s participation in the workforce. The landmark decision to lift the ban on women driving in June 2018 is one example. Female labor force participation increased from 19.7% in 2017 to 33.5% in 2020, reflecting the success of policies aimed at integrating women into the economy. This shift is expected to boost GDP by up to 3% by 2030, according to the International Monetary Fund (IMF).
MBS has launched several large-scale industrial and infrastructure projects to stimulate economic growth. NEOM, a $500 billion mega-city project announced in October 2017, aims to create a hub for innovation, sustainability, and economic diversity. The city is expected to contribute $100 billion to GDP by 2030 and create 380,000 jobs. Additionally, the $20 billion Qiddiya entertainment city and the expansion of the King Abdullah Economic City are set to boost tourism, entertainment, and industrial capabilities.
To enhance fiscal sustainability, MBS introduced a value-added tax (VAT) in January 2018 at a rate of 5%, which was later tripled to 15% in July 2020 in response to the economic challenges posed by the COVID-19 pandemic and declining oil prices. This move has significantly increased non-oil revenues, helping to stabilize public finances. In 2020, VAT revenue amounted to SAR 70 billion ($18.7 billion), underscoring the importance of these fiscal reforms in diversifying revenue sources.
Saudi Arabia has committed to investing in renewable energy as part of its Vision 2030 goals. The National Renewable Energy Program aims to develop 58.7 GW of renewable energy capacity by 2030, including 40 GW of solar power and 16 GW of wind power. The Sakaka solar power plant, which became operational in November 2019, is a key milestone, with a capacity of 300 MW. These investments are part of a broader strategy to reduce the kingdom’s carbon footprint and create a sustainable energy future.
Under Mohammed bin Salman’s leadership, Saudi Arabia has achieved significant economic milestones aimed at diversifying the economy, attracting foreign investment, and enhancing the kingdom’s global profile. These efforts reflect MBS’s vision of a robust, diversified, and sustainable economic future for Saudi Arabia, laying the groundwork for long-term prosperity and resilience.
