Saudi Arabia’s Investment Minister Khalid Al-Falih speaks at the Bloomberg New Economy Forum in Singapore on Wednesday, November 8, 2023.
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Saudi Arabia’s Investment Minister Khalid al-Falih dismissed skepticism about the kingdom’s plans to diversify the economy, with Riyadh touting “green-backed” investment opportunities to attract foreign financing.
“Many people doubt that the vision, the ambition, the breadth, depth and comprehensiveness of it, and the development of a country like Saudi Arabia that has been so dependent on commodities businesses like oil for decades, can do it.” Saturday “What do we want to achieve with Vision 2030,” Falih told CNBC’s Steve Sedgwick at the Ambrosetti Forum in Cernobbio, Italy. “
As one of the Middle East’s largest economies and a key U.S. ally in the region, Saudi Arabia has been stepping up investments to realize Crown Prince Mohammed bin Salman’s 2030 economic diversification vision plan, which covers 14 mega projects, including the Neom Industrial Park.
Under the initiative, Riyadh seeks to move away from its historical dependence on oil revenues, which the International Monetary Fund currently sees rising until 2026 and then begin to decline, and hopes to attract more than $3 trillion in financial flows to the domestic economy. , and pushing foreign domestic investment to $100 billion per year by 2030.
Eight years after realizing Vision 2030, Saudi Arabia is now “stronger and more committed” to the plan and has implemented or is on the verge of completing 87 percent of its targets, the minister said on Saturday. Critics of the plan have previously questioned whether Riyadh can successfully meet its goals by the deadline.
In recent years, Saudi Arabia has tried to open markets and improve the business climate through investment and labor law reforms, but has also instituted less popular requirements for companies to set up regional headquarters in the kingdom to win government contracts.
The International Monetary Fund noted that the number of foreign investment licenses issued by Saudi Arabia almost doubled in 2023, and government data showed net foreign direct investment flows increased by 5.6% annually in the first quarter.
However, concerns remain about the potential uncertainty and unpredictability of Saudi Arabia’s foreign investment legal framework and its dispute resolution system. Falih insisted that Saudi Arabia enjoys predictability and domestic political and economic stability.
“Green support”
Saudi Arabia’s Investment Minister said part of Riyadh’s offer to foreign investors is Saudi Arabia’s “Green Support” initiative, which aims to decarbonize supply chains in the renewable energy region.
“Green support basically means you need more high-energy processing [and] Manufacturing added value in materials and energy [located]”, Falih said, adding that Saudi Arabia has the logistics, capital and infrastructure to achieve this goal.
Under Vision 2030, the world’s largest oil exporter aims to achieve net-zero emissions by 2060. But questions remain about its commitment to decarbonization.
Riyadh and other members of the OPEC oil alliance have repeatedly called for the use of both hydrocarbons and green resources to avoid energy shortages during the global transition to net-zero emissions.
Some climate activists have also criticized Saudi Arabia’s promotion of solutions such as carbon capture and storage (CCS) technology, seeing it as a smokescreen to boost its lucrative oil business.
As part of its “green backstop,” Saudi Arabia sets out to “address global supply chain resiliency” and “build a new global economy, as we bring copper, lithium, cobalt, and semiconductors,” Falih stressed. Shortage, in the process of green fertilizers and green chemicals, we also need to pay attention to other key materials, which are rare earth metals.
