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Diverse Foreign Investments Drive Growth in Saudi Arabia’s King Abdullah Economic City

Emaar the Economic City, the main developer of KAEC, is moving in various directions with a focus on planning and developing the city. (Asharq Al-Awsat)
Emaar the Economic City, the main developer of KAEC, is moving in various directions with a focus on planning and developing the city. (Asharq Al-Awsat)
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Diverse Foreign Investments Drive Growth in Saudi Arabia’s King Abdullah Economic City

Emaar the Economic City, the main developer of KAEC, is moving in various directions with a focus on planning and developing the city. (Asharq Al-Awsat)
Emaar the Economic City, the main developer of KAEC, is moving in various directions with a focus on planning and developing the city. (Asharq Al-Awsat)

The King Abdullah Economic City (KAEC), which was established more than 17 years ago, is witnessing remarkable growth, thanks to the influx of diverse foreign investments in different sectors.

The city enjoys unique features, mainly its location in the western part of the Kingdom, on the most beautiful coastline in the city of Rabigh, and with easy access to international markets.

In remarks to Asharq Al-Awsat, Managing Director of Emaar the Economic City Mansour Al Salem said the city was open to developers and investors, pointing to the launch of new projects, with the cooperation of government entities.

According to Al-Salem, while the majority of applications submitted for investment in KAEC previously came from the local sector, the vision and incentives provided by the government have recently attracted foreign and investments in diverse fields, including the automobile industry.

Asharq Al-Awsat toured the King Abdullah Economic City and saw the gradual changes on various paths, with the increasing number of companies - estimated at about 100 multinational and Saudi firms - which have established their headquarters in the city to follow up on their ongoing projects.

Despite the huge projects being implemented on the ground, the visitor is initially surprised when they cross the main gate, as the white spaces appear vast in their eyes. Then one realizes how smartly planned the city is, with factories located on one side, hotels on another, tourist and entertainment areas on the coast, and headquarters and residences in another area.

The visitor is impressed by the smooth design of parks and beaches on pristine coasts extending over a distance of 40 square kilometers and the extensive spread of green areas near the beaches. The city has also allocated entertainment areas suitable for families and children of all ages, with large terrains for golf.

Al-Salem said the King Abdullah Economic City boasts many features that are not found elsewhere, including its geographical location on the Red Sea coast and short distance north of the city of Jeddah, which is an important commercial hub. The city also includes King Abdullah Port and the Industrial Valley, in addition to recreational sites.

Emaar the Economic City, the main developer of KAEC, is moving in various directions with a focus on planning and developing the city. The Economic Cities Authority, the regulatory body for King Abdullah City, provides investors and residents with a comprehensive set of incentives and benefits, including 100 percent foreign ownership for companies and individuals, a sea port and a cargo area, as well as facilitations for obtaining permits and licenses related to residence, work, operational affairs, and ownership and management of real estate.

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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)

Saudi Arabia’s non-oil exports have reached their highest levels since the second quarter of 2022, continuing to grow at a steady pace. By the end of the third quarter of this year, non-oil exports, including re-exports, totaled SAR 80 billion (USD 21 billion), reflecting a 16.8% increase compared to the same period in 2023.

This growth aligns with the goals of Vision 2030, which aims to diversify Saudi Arabia’s economy and reduce reliance on oil revenues. Credit rating agency Moody’s recently upgraded Saudi Arabia’s credit rating to AA3 from A1 with a stable outlook, citing the Kingdom’s ongoing economic diversification and the strength of its non-oil private sector. Moody’s projects the non-oil private sector’s GDP to grow by 4–5% annually in the coming years.

According to data from Saudi Arabia’s General Authority for Statistics, non-oil national exports (excluding re-exports) grew by 7.6% in the third quarter of 2024, reaching SAR 57 billion (USD 15.1 billion). Re-exports saw a remarkable surge of 48.4%, amounting to SAR 23 billion (USD 6.1 billion).

In contrast, total merchandise exports dropped by 7.7% to SAR 276 billion (USD 73.5 billion) due to a 14.9% decline in oil exports. As a result, the share of oil exports in total exports decreased from 77.3% in the third quarter of 2023 to 71.3% this year.

Chemical industry products accounted for 25.5% of non-oil exports, growing by 5.3% compared to the same period last year. Plastics, rubber, and their derivatives followed closely, representing 24.9% of non-oil exports, with an 8.9% increase from the third quarter of 2023.

China remained Saudi Arabia’s top export destination, accounting for 15.2% of total exports in the third quarter of 2024. Japan and South Korea followed, at 9.3% and 9.2%, respectively. Other major destinations included India, the UAE, the US, Poland, Egypt, Bahrain, and Taiwan. Together, these ten countries accounted for 66.4% of Saudi exports.

Experts emphasize that the growth in non-oil exports strengthens Saudi Arabia’s economy and reflects the success of its diversification strategy under Vision 2030.

Shura Council member Fadhel Al-Buainain highlighted the importance of considering the scale of Saudi non-oil exports during the third quarter of 2024. He emphasized two key aspects of Saudi non-oil exports.

First, the 16.8% growth achieved is a significant leap that boosts the Saudi economy’s ability to continue strengthening non-oil exports, which are a focal point of Vision 2030 and its economic diversification goals.

Second, he said the 48.4% increase in the value of re-exported goods represents substantial growth, reflecting the Kingdom’s potential to play a pivotal role in regional re-export activities. This, in turn, can stimulate exports and position Saudi Arabia as a global logistics hub.

He further noted that the increase in export value compared to the second quarter of this year, amounting to SAR 37.2 billion (USD 9.92 billion) or 15.6%, indicates sustained and accelerating export growth.

Al-Buainain believes that Saudi Arabia’s ports on the Red Sea and the Arabian Gulf are well-equipped to play a central role in re-exporting, supported by free economic zones, robust infrastructure, and a well-established transportation and logistics network.

He also stated that the improvement in global demand, particularly in the petrochemical sector, which accounted for the largest share of exports, contributed to this growth.

However, the global economic conditions may face certain challenges that will reflect negatively on global demand, he remarked, stressing the importance of diversifying exports.

Dr. Osama Al-Obaidi, an international commercial law consultant and professor, told Asharq Al-Awsat that the significant increase in non-oil exports in the third quarter of this year compared to the same period in 2023 is linked to the growth in petrochemical exports, particularly plastics, rubber, and their derivatives.

He explained that this rise reflects the effectiveness of Saudi Arabia’s economic diversification efforts and its reduced reliance on oil as a sole income source, in line with Vision 2030.

It also highlights the success of the substantial investments made by the government to develop ports and logistics services, such as King Abdulaziz Port in Dammam and Jeddah Islamic Port.

Moreover, improvements in domestic, regional, and international airports, along with initiatives to promote local industries—particularly chemicals, food products, pharmaceuticals, and other high-demand goods in foreign markets—have also played a pivotal role.