Five years ago, the kingdom of Saudi Arabia set a date for making history before the whole world. On April 25, 2016, Crown Prince Mohammad bin Salman, with the approval of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz, launched “Vision 2030,” road map for both our future and the future of coming generations.
The goals of transforming into a vibrant society that enjoys a thriving economy in an ambitious nation are not just slogans raised by Vision 2030.
We were presented with aspirations that match the kingdom in size and wise leadership that swiftly turned goals into plans that succeeded in going beyond the groundwork and entering the implementation stage.
Five years into the Vision, we can bear witness to and reap the benefits of those plans across all state sectors, including the financial and economic sectors, which are the focus of this article.
Those following up with the latest homeland and citizen developments and the far-reaching wave of successive change can make out the size of state efforts in all vital sectors, especially education, logistics support, tourism, entertainment, women empowerment, and other essential areas. This shows that realizing ambitions starts with having a clear vision and well-thought-out plans for implementation that ultimately benefit both country and citizen.
Since their launch, Vision 2030 programs have sought to build a prosperous economy that can support an aspiring nation and help in shaping a vibrant society. They are doing so by introducing structural reforms to the Kingdom’s economy. The most prominent of those changes are enhancing financial sustainability, raising the efficiency of spending, developing the financial sector, and privatization.
In the interest of economic development and diversification, the private sector’s contribution to the Kingdom’s economy is being enhanced through liberalizing state-owned assets, privatizing some government services, developing an advanced financial market, and enabling financial institutions to support the private sector growth.
To answer those wondering whether or not some of the Vision’s ambitious aspirations were met and if we had come a long way in providing everything needed for building a promising future in an attractive environment for investors: There is remarkable progress in various sectors, whether in growth rates, employment levels, job creation, or the size of completed projects.
Moreover, global indicators have detected progress in the Kingdom’s regional and international size and position.
We can firmly say that the Vision 2030 train has left the station of setting goals and thinking up ambitious ideas and arrived at the station of major results and transformations.
The Fiscal Balance Program (FBP), which primarily promotes financial sustainability, helped reduce the deficit ratios of GDP from 15.8% in 2015 to 4.5% in 2019. It also diversified and developed the structure of the Kingdom’s revenues, considering them a primary and sustainable source. Non-oil revenues, for example, had grown from SAR 166 billion in 2015 to SAR 369 billion in 2020.
Implementing the FBP raised the level of financial planning and the quality of budget performance. More so, the Government Expenditure & Projects Efficiency Authority assisted in achieving SAR 430 billion in cost savings.
Etimad, the finance ministry’s digital portal for expediting financial transactions with the private sector, has processed around 462,000 contracts and settlements worth over SAR 983 billion.
The number of payment orders on the e-platform reached about 1,900,000, with a value exceeding SAR 1 trillion. In December 2020, the number of beneficiaries of the Citizen Account Program reached 2.94 million family providers and 10.33 million applicants. More than SAR 86 billion were distributed to a total of 13.27 million beneficiaries.
As for the most notable achievements of the privatization program, they looked to enhance the quality and efficiency of services provided to citizens.
Privatization plans have provided more than 160 opportunities across 16 key industries.
Also, the local and international private sectors were awarded eighteen projects and partnerships for desalinated water production, wastewater treatment, and developing container terminals in the Jeddah Islamic Port and King Abdulaziz Port, a second cargo terminal at King Khalid Airport in Riyadh, and 60 new schools for children in the Jeddah and Makkah areas.
The privatization program also embraces asset sale projects like the Saudi Grains Organization selling four of its flour mills and the Saudi Arabian Airlines (Saudia) tendering its medical unit in Jeddah.
Meanwhile, tenders for another 21 projects are underway. They involve the municipal sector, housing, health, education, environment, water and agriculture, labor, communication, and information technology, media, sports, industry, and mineral wealth.
In 2020, and despite the coronavirus pandemic, several privatization projects in the sectors of health, education, transportation, environment, water, and agriculture were completed with private sector investments totaling around SAR 15 billion.
The privatization program seeks to strengthen the partnership between the public and private sectors, transfer ownership of government assets, liberalize state-owned assets, privatize specific government services, and expand private sector participation in infrastructure projects and public services provided to citizens and residents.
Other than raising the bar on services provided to citizens and residents, the program also looks to introduce the flexibility needed in the regulatory and investment environment for privatized projects in the Kingdom.
Five years ago, the Kingdom of Saudi Arabia set a date for making history before the whole world. On April 25, 2016, Crown Prince Mohammad bin Salman, with the approval of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz, launched “Vision 2030,” road map for both our future and the future of coming generations.
The goals of transforming into a vibrant society that enjoys a thriving economy in an ambitious nation are not just slogans raised by Vision 2030.
We were presented with aspirations that match the Kingdom in size and wise leadership that swiftly turned goals into plans that succeeded in going beyond the groundwork and entering the implementation stage.
Five years into the Vision, we can bear witness to and reap the benefits of those plans across all state sectors, including the financial and economic sectors, which are the focus of this article.
Those following up with the latest homeland and citizen developments and the far-reaching wave of successive change can make out the size of state efforts in all vital sectors, especially education, logistics support, tourism, entertainment, women empowerment, and other essential areas. This shows that realizing ambitions starts with having a clear vision and well-thought-out plans for implementation that ultimately benefit both country and citizen.
Since their launch, Vision 2030 programs have sought to build a prosperous economy that can support an aspiring nation and help in shaping a vibrant society. They are doing so by introducing structural reforms to the Kingdom's economy. The most prominent of those changes are enhancing financial sustainability, raising the efficiency of spending, developing the financial sector, and privatization.
In the interest of economic development and diversification, the private sector’s contribution to the Kingdom’s economy is being enhanced through liberalizing state-owned assets, privatizing some government services, developing an advanced financial market, and enabling financial institutions to support the private sector growth.
To answer those wondering whether or not some of the Vision’s ambitious aspirations were met and if we had come a long way in providing everything needed for building a promising future in an attractive environment for investors: there is remarkable progress in various sectors, whether in growth rates, employment levels, job creation, or the size of completed projects.
Moreover, global indicators have detected progress in the Kingdom’s regional and international size and position.
We can firmly say that the Vision 2030 train has left the station of setting goals and thinking up ambitious ideas and arrived at the station of major results and transformations.
The Fiscal Balance Program (FBP), which primarily promotes financial sustainability, helped reduce the deficit ratios of GDP from 15.8% in 2015 to 4.5% in 2019. It also diversified and developed the structure of the Kingdom’s revenues, considering them a primary and sustainable source. Non-oil revenues, for example, had grown from SAR 166 billion in 2015 to SAR 369 billion in 2020.
Implementing the FBP raised the level of financial planning and the quality of budget performance. More so, the Government Expenditure & Projects Efficiency Authority assisted in achieving SAR 430 billion in cost savings.
Etimad, the finance ministry's digital portal for expediting financial transactions with the private sector, has processed around 462,000 contracts and settlements worth over SAR 983 billion.
The number of payment orders on the e-platform reached about 1,900,000, with a value exceeding SAR 1 trillion. In December 2020, the number of beneficiaries of the Citizen Account Program reached 2.94 million family providers and 10.33 million applicants. More than SAR 86 billion were distributed to a total of 13.27 million beneficiaries.
As for the most notable achievements of the privatization program, they looked to enhance the quality and efficiency of services provided to citizens.
Privatization plans have provided more than 160 opportunities across 16 key industries.
Also, the local and international private sectors were awarded eighteen projects and partnerships for desalinated water production, wastewater treatment, and developing container terminals in the Jeddah Islamic Port and King Abdulaziz Port, a second cargo terminal at King Khalid Airport in Riyadh, and 60 new schools for children in the Jeddah and Makkah areas.
The privatization program also embraces asset sale projects like the Saudi Grains Organization selling four of its flour mills and the Saudi Arabian Airlines (Saudia) tendering its medical unit in Jeddah.
Meanwhile, tenders for another 21 projects are underway. They involve the municipal sector, housing, health, education, environment, water and agriculture, labor, communication and information technology, media, sports, industry and mineral wealth.
In 2020, and despite the coronavirus pandemic, several privatization projects in the sectors of health, education, transportation, environment, water and agriculture were completed with private sector investments totaling around SAR 15 billion.
The privatization program seeks to strengthen the partnership between the public and private sectors, transfer ownership of government assets, liberalize state-owned assets, privatize specific government services, and expand private sector participation in infrastructure projects and public services provided to citizens and residents.
Other than raising the bar on services provided to citizens and residents, the program also looks to introduce the flexibility needed in the regulatory and investment environment for privatized projects in the Kingdom.
It does so in a manner that supports project implementation in an attractive environment to both short-term and long-term investments.
The privatization system will work to enhance private sector participation. It will also open up investment opportunities by organizing procedures relevant to privatization projects, maintaining transparency, raising comprehensiveness and quality levels of services, and improving the level of their management.
Reviewing the figures is enough to reveal the size of the difference made, the boom created and the great transformation that the Kingdom witnessed in just five years. The standard of living of citizens was also directly improved.
Financial sector development has witnessed great successes as well. Some of the achievements include an increase in the number of authorized payment companies in the Fintech industry and an increase in the volume of trading in the secondary domestic bond market, where transactions exceeded SAR 70 billion in 2020. Compared to SAR 10 billion in 2019, the size of the boost is more than 600% year on year.
The Financial Sector Development Program, through many initiatives, worked to raise the share of SME financing. It exceeded its targeted goal of 6% by 2020, with SMEs being granted 8% of bank loans.
The indirect lending initiative helped in securing around SAR 642 million for 611 SMEs and increased the openness of the Saudi Stock Exchange (Tadawul).
Today, Tadawul appears in global market indices like “MSCI”, “S&P Dow Jones,” and “FTSE Russell”. We soon transformed into a cashless society with an instant payment system. A derivatives market was launched, and retail e-payments amounted to 36% of all available payment transactions made in 2020, surpassing its 28% goal for the year.
Back in 2020, none of the observers and analysts - even the pessimists – could have predicted the world going into the stalemate, closure, and stagnation it did. But such was the reality imposed by the coronavirus pandemic outbreak. To this day, the pandemic’s repercussions are felt worldwide.
Nevertheless, the Kingdom benchmarks well when compared to other G20 economies. Growth in non-oil GDP only slid by 2.3%, which is much better than the average declines witnessed by G20 member states under the pandemic.
Going back to the journey towards Vision 2030, we can see that the Kingdom is steadily moving towards economic diversification. Non-oil GDP accounted for 59% of the Kingdom’s total GDP in 2020. In 2016, it stood at 55%.
Private-sector GDP also saw an increase from 38.7% in 2016 to 41.1% by the end of 2020.
Despite 2020 being a year defined by significant challenges, Vision 2030 enforced flexibility in public financial policy. This enabled the government to re-prioritize strategic spending and ensure it covers sectors at the forefront of the fight against the coronavirus pandemic.
Financial policy management under a virus crisis has also led to strengthening the role played by the Public Investment Fund (PIF), the National Development Fund, and other funds in diversifying the Kingdom’s investment base, supporting the national economy, and moving the wheels of economic growth forward.
Contiguously, achievements of the National Debt Management Center (NDMC) continued. Since its establishment five years ago, it was able to support the Kingdom’s general budget by nearly SAR 897 billion.
More so, the international investor base increased by 12.4% in 2020. The first international bonds with negative returns outside the European Union (EU) were issued in 2021 and are considered the second-largest bond outside the union.
We have crossed a reasonable distance and continue to move faster into the future.
In the medium term, spending on Vision 2030 programs will continue to contribute to achieving the plan’s objectives while factoring in public finances management without affecting projects for providing essential services to citizens.
Spending on major projects and programs to realize Vision 2030, support systems, social benefits, and stimulus packages will carry on as it plays a key role in providing more opportunities for the private sector.
The Kingdom’s march towards major transformations is advancing through a series of megaprojects that will serve as the main driver for future growth and investment. These projects involve renewable energy, technology, and tourism.
Tourism developments include eco-tourism in the Red Sea and recreational tourism.
These projects are expected to benefit both the Kingdom and its citizens greatly. We will see a big jump in employment rates and a GDP boost.
I won’t miss out on also proudly pointing out the Kingdom’s extraordinary success in presiding and organizing the G20 summit. This achievement reflects the pivotal part played by the Kingdom and the Saudi economy’s role in maintaining global stability.
During its G20 presidency, the Kingdom devoted its efforts to building a stronger, more robust, and sustainable world, parallel to the economic and social transformation it is witnessing.
It also presented many initiatives supported by G20 countries, perhaps the most prominent of which is the launch of the historical initiative to suspend debt service payments.
Another notable initiative featured deploying $11 trillion to protect the global economy in an unprecedented effort to protect individuals from losing their jobs while caring for the world’s poorest regions.
Stemming out of the Kingdom’s belief in putting people first, it worked alongside other G20 countries to approve an initiative focused on securing coronavirus vaccines and ensuring that all target countries had access to the shot.
Moreover, the Kingdom also donated $500 million to vaccine manufacturing efforts.
Another exceptional accomplishment under Saudi Arabia’s Presidency of the G20 includes the leaders of the bloc endorsing the concept of the ‘circular carbon economy’ (CCE) as a way to promote economic growth and manage emissions in all sectors.
This demonstrates the Kingdom’s commitment to protecting the environment and combating climate change within the framework of the Paris Agreement and relevant international conventions.
Additionally, the Saudi G20 presidency launched the Riyadh Initiative on the Future of the World Trade Organization to work constructively towards the necessary reforms at the global body. G20 members also agreed on initiatives for economic recovery.
The Kingdom’s achievements in just five years demand we be proud and motivate us to persevere on the path of development.
With God’s blessing, hopes are renewed, and efforts multiplied to meet the aspirations of our wise leadership.
Vision 2030 will proceed towards realizing the Saudi dream and transforming vision into reality by the hands of the sons and daughters of this blessed country, God willing.
