Saudi Arabia announced plans to launch a tourism development fund with an initial $4 billion investment, as part of its plans to diversify its economic resources.
The Ministry of Tourism issued a statement saying the fund will launch equity and debt investment vehicles to develop the tourism sector in collaboration with private and investment banks.
Tourism Minister Ahmed al-Khateeb said that the fund is a testament to investor and private sector confidence in the long-term outlook for tourism in Saudi Arabia, especially since it comes at a time as tourism faces unprecedented global challenges in light of the COVID-19 pandemic.
Saudi Arabia considers tourism as one of the main pillars of the economic reforms aimed at reducing the Kingdom’s dependence on oil revenue.
Last year, Saudi Arabia opened up to international tourists, launching a new visa system that appeals to foreign companies to invest in the sector. It hopes that this will contribute more than 10 percent of gross domestic product (gdp) by 2030, up from the current 3 percent.
Experts predict a severe economic contraction in Saudi Arabia this year, hit by the economic impact of measures to contain the coronavirus pandemic and by a sharp drop in oil revenues.
They believe that the fund, which was approved by the Shura Council last week, will contribute to providing government funding to investors and help complete development projects in this sector
It will also help in establishing important tourism sectors that will achieve remunerative revenues in addition to achieving tourism development, economic and service goals.
Economist Saleh al-Humaidan said the sector will depend on domestic tourism in the next stage, along with the local industry.
He told Asharq Al-Awsat that domestic tourism will be a strong economic addition and will become a modern economic tributary capable of contributing to the consolidation of the policy of diversifying economic resources.
The tourism development fund will establish infrastructure for a broad future for domestic tourism, especially as there are large-scale domestic tourism investments, according to Humaidan.
He pointed out that the fund will certainly enhance the development of tourism and will be an important element in managing the retail sector, localizing national employment and creating job opportunities for Saudi youth.
Humaidan noted that domestic tourism along with religious, heritage and medical tourism have seen noticeable progress, adding that a lot can be achieved now that the Tourism Authority has been transformed into to the Ministry of Tourism.
The tourism development fund will be the major supporter to generate domestic tourism that attracts both foreign and local investment, he added.
