Saudi Arabia to begin preparing Vision 2040

Reuters

• Vision 2040 could be announced in 2027
• Non-oil up to 46% of economy
• Giga-project budget of $1.25trn

Saudi Arabia is to begin working on the next phase of its economic diversification plan known as Vision 2030 and hopes to unveil its Vision 2040 as early as 2027, Crown Prince Mohammed bin Salman said in an interview this week. 

“Today we’re trying to close a few things, we’re aiming to close in the first half of 2024 and then we’re going to shift to implementation and starting preparation for Vision 2040 and announcing Vision 2040 in 2027-2028. So that’s the main thing we are focusing on,” he told Fox News when asked about the government’s current priorities. 

The crown prince has been the main driver of the project to diversify the world’s largest oil exporter’s economy away from oil by 2030 and transform what was one of the world’s most conservative societies, attracting support from major financial institutions and governments. 

• Egypt’s Talaat Moustafa to help build Saudi ‘smart city’
• Neom appoints manager for superyacht destination
• Paradise found: Conserving and leveraging Saudi’s natural bounty

The non-oil sector’s contribution to GDP has risen only slightly since 2016 when Vision 2030 was first announced, from 43.3 percent to 45.7 percent in the first half of 2023. The strategy was drawn up with help from consultancies such as McKinsey. 

A rebound in oil prices following the first stage of the Covid-19 pandemic in 2020 has helped the kingdom, the Arab world’s biggest economy, to push forward with giga-projects valued at $1.25 trillion. 

They include tech city Neom as well as the Red Sea Project and Amaala tourist resorts, entertainment cities Qiddiyya and Seven, the Roshn and Jeddah Central housing projects, five economic zones, and a series of infrastructure projects. 

Ongoing oil production cuts this year have helped push oil prices to more than $90, providing a cash windfall for state oil giant Aramco, but the economy has seen a contraction in GDP growth and banks are struggling to keep up with giga-project demands. 

Bin Salman said he wanted Saudi Arabia to be among the world’s top seven economies.

He pointed to growth in sectors such as tourism and sports, including e-sports, rejecting criticisms for huge spending to bring some of the world’s top football players to Saudi clubs. 

“If ‘sport-washing’ is going to increase my GDP by 1 percent, then we’ll continue doing sport-washing,” he said, speaking from the Red Sea at Neom. “I don’t care. I have 1 percent growth in GDP from sport and I’m aiming for another one-and-a-half percent.”

Neom will host the 2029 Asian Winter Games, in nearby mountains where snow falls in winter, highlighting Saudi Arabia’s diverse climate and attraction as a tourist destination. By 2030 the government wants annual visitors to rise from 100 million from 40 million now.

He said the Brics bloc that last month invited Saudi Arabia to join should be seen as an economic, not political, alliance. 

“We are seeing that if we continue for another decade without being part of a group inside the G20 that could really create obstacles for us,” he said, pressing for a defence pact with Washington that would lock in future Saudi defence spending. 

“You don’t want to see Saudi Arabia shifting their armaments from America to another place. So that document will strengthen that, it will strengthen the security of America… and it will save headache on the Saudi side of not switching to other places,” Bin Salman said.