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Private Sector Investment in Saudi Economy Jumps 104%

The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
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Private Sector Investment in Saudi Economy Jumps 104%

The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)

Non-governmental private sector investments in Saudi Arabia’s GDP for the past year increased 22 percent to reach $242 billion. Compared to 2016, investments witnessed a considerable jump, reaching 104 percent, despite the impact of the coronavirus pandemic on economic activities worldwide.

The Saudi government is seeking to empower the private sector and raise its contribution to the gross domestic product from 40 to 65 percent as a target for 2030.

Saudi Arabia inaugurated the Private Sector Partnership Reinforcement Program (Shareek) to strengthen government and private sector collaboration, which he said would enable private investment of $1.33 trillion until 2030.

Job creation

According to a recent report by the Ministry of Investment, a copy of which was seen by Asharq Al-Awsat, the impact of the methodology of structural and economic reforms since the launch of Vision 2030 is visible through the growth of the non-oil private sector in recent years as part of the country's plan to reduce its dependence on oil.

The report revealed that the number of Saudi workers in the private sector increased by 58 percent during the fourth quarter of last year, while that rate reached 42 percent in the government sector.

It stressed the importance of supporting and enabling the private sector to operate within its maximum potential, which will reflect on the Saudi economy and generate job opportunities, thereby reducing unemployment and achieving social and economic well-being.

Shareek Program

In the presence of Crown Prince Mohammad bin Salman bin Abdulaziz, Saudi Arabia had announced in March the first wave of projects supported by the Shareek program, designed to help unlock the full potential of Saudi Arabia's private sector and contribute to achieving the national targets defined by Vision 2030."

The Crown Prince is also the Chairman of the Large Companies Investment Committee.

The ceremony witnessed the signing of several agreements for 12 projects that will be implemented by eight companies in several strategic and vital sectors.

The projects will boost the economic growth of Saudi Arabia, localizing industries, stimulating innovation, and strengthening the partnership between the government and private sectors.

First package of projects

Shareek CEO Abdulaziz al-Arifi said the total value of the projects announced during the ceremony are worth to about $51.2 billion.

The share of major companies' investments represents $32 billion, and its impact on the domestic product will reach around $124.2 billion over the next two decades, said Arifi.

He added that the projects will develop the growth of eight national companies and help to raising their competitive potential at the international level.

They will also help create a high positive impact across entire value chains, which provides excellent investment opportunities for a more significant segment of companies in the private sector.

Large businesses

The first package of supported projects will have an economic and strategic impact on several economic sectors in the country and provide 64,400 new job opportunities.

Large companies are a significant driver of economies around the world. Their investment growth affects the economic activity of the investment system in general and contributes to supporting projects that increase the value of investments and diversification of portfolios.

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.