Vision 2030:

Blueprint for Economic Transformation

 

In April 2016, Crown Prince Mohammed bin Salman and the Royal Court published Vision 2030, an enormously ambitious plan to diversify the KSA economy and reduce its dependence on hydrocarbons. To achieve this transformation, the private sector must become a powerful engine driving future economic growth. Today, the public sector, including the oil and petrochemical business, provides two-thirds of GDP; twice as many people work in the public sector as the private sector. In a nation where 70% of the population is under the age of 30, this is clearly not a sustainable condition. Vision 2030 is a bold statement that the Kingdom needs to transform its national economic model and also change the relationship between the Ruling family and the people to create a better society. It is an audacious undertaking, for sure.

The Vision 2030 blueprint organizes Saudi Arabia’s unique strengths and capabilities into a long-term strategic plan to address the core challenges of breaking away from reliance on a single product economy. Vision 2030 defines the general direction, policies, goals, and objectives of the Kingdom. Understanding the broad national priorities of the Kingdom is essential to being viewed as a partner, and not just a vendor when conducting business in Saudi Arabia.

There are three foundational pillars upon which the plan rests:

  1. KSA is the Land of the Two Holy Mosques. Being the heart of the Arab and Islamic world is a huge responsibility and the country must grow in this role thoughtfully.
  2. Financial Resources: Use KSA’s substantial financial resources to become a global investment powerhouse, stimulate the economy and diversify revenues.
  3. Geographical Resource: Use KSA’s strategic location to become a global hub connecting three continents.

Here is a brief summary of the overall goals and objectives of Vision 2030. There are three broad themes voiced in Vision 2030, along with a summary of goals:

A Vibrant Society: People Come First

‘Strong Roots’: Based on Islamic principles of moderation, increase pride in national identity and cultural heritage

  • Increase Umrah visitors from 8 to 30 million per year
  • Double the number of Saudi heritage sites registered with UNESCO
  • Build a major Islamic museum.

 

Fulfilling Lives’: Promote physical and social well-being and improve quality of life

  • Increase culture and entertainment: increase household spending on these activities    from 2.9% to 6%
  • “Daem”: the national program to promote healthy life by creating facilities and programs for sports and healthy leisure
  • Increase the ratio of individuals exercising once a week from 13% to 40%
  • Enhance quality and livability of cities with high-quality services
  • Sustainability: preserve the environment and optimize water usage

 

‘Strong Foundations’:  Health and Education

  • Healthcare: Promote preventive care, develop private insurance market, the capacity of hospitals. Increase average life expectancy from 74 to 80 years. Raise KSA position in Social Capital Index to 26 from 10
  • Strengthen families: more parental involvement in education; increase home ownership; modernize the social welfare system.

 

A Thriving Economy: Create jobs, grow economy, privatize services, attract talent

‘Rewarding Opportunities’: Job Creation

  • Lower unemployment rate from 11.6% to 7%
  • Increase SME contribution to GDP from 20% to 35%
  • Increase women’s workforce participation from 22% to 30%

 

‘Investing for the long-term’: develop the national economy

  • Increase localization of oil and gas sectors from 40% to 75%
  • Increase Public Inv Fund (PIF) assets from SAR 600 to 7 trillion
  • Increase FDI from 3.8% to 5.7%
  • Increase private sector contribution from 40% of GDP to 65%
  • Localize 50% of military equipment spending by 2030
  • Mining sector: Goal to reach SAR 97 billion by 2020 and creating 90,000 jobs
  • Renewable energy: Target to generate 9.5 gigawatts of renewable energy and localize     value chain

 

‘Open for Business’: Facilitate, Expedite, Adapt, Compete

  • Global Competitive Index: Rise to 25 from the current 10th position
  •  Increase FDI to 5.7% from 3.8%
  • Increase private sector contribution to 65% GDP from 40%
  • Develop sophisticated digital infrastructure
  • Simplify regulations and procedures, from licensing to customs to capital funding and improve enforcement of contracts

 

‘Leveraging Unique Position’: Build out a logistics hub and integrate regionally and internationally

  • Raise global ranking in Logistics Performance Index to #49 from current #25
  • Increase share of non-oil exports in non-oil GDP from 16% to 50%
  • Support national companies to export their products
  • Link infrastructure internally and across borders to enhance logistics services, working with private sector and international partnerships. Improve the capacity of air, maritime and other transport operators

An Ambitious Nation

‘Effectively Governed’: Transparency and Efficiency Drive Growth

  • Increase non-oil government revenue from SAR 163 billion to SAR 1 trillion
  • Raise ranking in Government Effectiveness index to #20 from #80
  • Improve ranking in E-Government Survey from #36 to the top five
  • "Qawam Program”: Effective and efficient spending controls

‘Responsibly Enabled’:

  • Personal: increase household saving from 6% to 10%
  • Business: observe social responsibility to create a sustainable economy, help young people build professional careers, be profitable while addressing national challenges
  • Non-profit organizations: Raise sector’s contribution to GDP from .3% to 5%, rally one million volunteers annually, vs 11,000 today

 

Achieving Vision 2030:

Achieving this ambitious vision will be a huge undertaking. Here are some of the programs that have been established to achieve the overall transformation of the Kingdom to a diversified economy with a vibrant private sector that can generate good jobs for their fast-growing population:

  • Government Restructuring Program
  • Fiscal Balance Program
  • Regulations Review Program
  • Public Investment Fund (PIF) Restructuring Program
  • National Transformation Program (NTP)
  • Privatization Program
  • Saudi Aramco Strategic Transformation Program
  • Strategic Directions Program
  • Strategic Partnerships Program
  • Project Management  Program
  • Human Capital Program
  • Program for Strengthening Public Sector Governance

 

Give The Quincy Group a call to discuss what Vision 2030 means for your business.

http://vision2030.gov.sa/en