عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi Arabia to Adopt Strategy to Stimulate Development, Innovation and Research

The Sustainable Partnership Conference was launched on Wednesday in Riyadh, in the presence of Saudi ministers. (Asharq Al-Awsat)
The Sustainable Partnership Conference was launched on Wednesday in Riyadh, in the presence of Saudi ministers. (Asharq Al-Awsat)
TT
TT

Saudi Arabia to Adopt Strategy to Stimulate Development, Innovation and Research

The Sustainable Partnership Conference was launched on Wednesday in Riyadh, in the presence of Saudi ministers. (Asharq Al-Awsat)
The Sustainable Partnership Conference was launched on Wednesday in Riyadh, in the presence of Saudi ministers. (Asharq Al-Awsat)

Senior Saudi government officials revealed serious trends towards activating development, innovation and research within the framework of the country’s transformation plan, disclosing the imminent completion of a strategy dedicated to research and development.

The Ministry of Education launched on Wednesday in Riyadh, the first dialogue conference, entitled “Integration and Sustainable Partnerships, which underlined the possibility of developing the research and innovation system in Saudi universities to contribute to the Kingdom’s investments and economy.

The speakers, including ministers and officials, called for the importance of integration between various sectors, by linking the research and innovation system in universities with the private sector to help achieve the goals of the Kingdom’s Vision 2030.

In this context, Saudi Minister of Investment Eng. Khalid Al-Falih disclosed the imminent completion of an integrated strategy for research and development in the Kingdom.

He added that public spending on universities in research and development must be commensurate with the capabilities of universities, which gives them a great responsibility to gain government’s confidence.

Al-Falih underlined the need to transform research minds in Saudi universities into an investment value, pointing to the importance of investing in research, development and innovation, to further boost the overall economy.

For his part, Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef stated that the innovation strategy would support the domestic product and increase the Kingdom’s exports.

A budget will be allocated for research and development in all government agencies, he revealed, pointing to important elements that encourage the Kingdom to have ambitions goals.

Al-Khorayef noted that restructuring the research, development and innovation system and achieving harmony between all sectors contributed to enhancing opportunities and strengthening economic returns. In this regard, he stressed the importance of linking research and innovation with industry, energy, military and technical industries.

Minister of Economy and Planning Faisal Al-Ibrahim stated that the ministry was keen to achieve the sustainable development goals, and was in charge of coordinating efforts in the public and private sectors, to achieve the goals of Vision 2030.

Minister of Education Youssef Al-Bunyan affirmed that Saudi Arabia has valuable opportunities to compete in the global market.

“We have promising opportunities for training and employing young people, to create an innovative generation,” he told the conference.

Most Viewed

 
 
Business

Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
TT
TT

Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.