Analysis of Saudi Arabia's Economic Transformation: Vision 2030 Report

This report provides a comprehensive overview of Saudi Arabia's Vision 2030, a strategic framework for economic diversification and growth. The vision encompasses various sectors, including education, small and medium-sized enterprises (SMEs), and renewable energy. Key initiatives include modernizing the education system to align with market needs, supporting SMEs through financial and regulatory reforms, and attracting foreign investment. The report also addresses the development of key sectors such as tourism, mining, and renewable energy, along with efforts to improve the business environment and enhance the competitiveness of the energy sector. Additionally, it highlights plans for privatization, the establishment of special economic zones, and the development of digital infrastructure. The report emphasizes the importance of attracting talent, enhancing financial resources, and fostering both regional and international integration to achieve economic prosperity and sustainable development. The goal is to transform Saudi Arabia into a global leader in various sectors, creating a thriving economy with rewarding opportunities for all citizens.

SUMMARY
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Learning for Working
In order to ensure that Saudi children have a bright future, it is imperative to invest in training
of teacher, education leaders besides determining the skills shortage and investing in various
academic institutions and related scholarship programs. Also, National Labor Gateway
(TAQAT) has been developed to assist in identifying skill shortage and fulfilling them.
Boosting our Small Businesses and Productive Families
The small and medium businesses in Saudi Arabia have contributed largely to the economic
growth and due to this, the country’s vision for 2030 is formulated on the same grounds.
According to Saudi Arabia’s Vision for 2030, the small and medium businesses of the
country will help in solving the issue of unemployment as they facilitate many job
opportunities and also, they encourage export business massively. In a similar way,
productive families will be helped with microfinance in transforming their dreams into
reality. Also, SME Authority has been setup to foster these organisations by removing
various bottlenecks and challenges faced.
Providing Equal Opportunities
Equal opportunities need to be provided to everyone for which Job Creation and Anti-
Unemployment Commission has been established recently. Saudi Arabia has a young
population along with significantly amount of women which are significantly assets that can
be tapped with adequate skills. Also, efforts would be made to tap the significant female
population along with people with disabilities who need to be provided enough skills and
opportunities.
Attracting The Talents We Need
Talent retention is a challenge for which the kingdom needs to attract and retain the best of
the talent from abroad by providing various facilities and focusing on economic development.
It is imperative that the Kingdom attracts the best minds from inside and outside as this
talent can provide stimulus for economic growth and higher foreign investment.
An Education That Contributes to Economic Growth
It is imperative that the education system must fulfil the job market requirements for which it
is envisaged that the curriculum would be modernised and strategic partnerships to provide

students with industry experience would be forged. Also, it is envisaged that by 2030, atleast
five Saudi Universities would be included in the top 200 thereby resulting in international
education standards in Saudi system.
A Bigger Role For Small and Medium-Sized Enterprises
The growth of SME can further be enhanced as their contribution to Saudi GDP is only 20%
unlike other countries where it is much higher. There are issues such as shortage of skill,
capital coupled with administrative and legal complexity. The SME Authority aims to resolve
some of these issues and also aims to provide a platform for marketing ideas and products for
the entrepreneurs. Besides, assisting ecosystem in the form of venture capital, incubators,
foreign collaborations, e-commerce would be encouraged to support SME growth.
Maximising Our Investment Capabilities
The financial resources would be enhanced by the ongoing privatization of state owned assets
and this would aid capital formation for the future investments. In order to diversify the
economy and government resources, a sovereign wealth fund would be formed as ownership
of Aramco would be transferred to Public Investment Fund. Instead of competing with
private sector, this would primarily look into new economic sectors along with setting
national corporations.
In order to enhance knowledge transfer and trade, the objective is to enter long term alliances
besides the existing alliances. The kingdom envisages participation in emerging technologies
and large international companies. Additionally, Saudi Arabia aims to emerge as market
leader in various sector for which it is imperative that capital markets should be more open
and financial systems transparent. In order to aid the development of financial markets in
Saudi Arabia, the listing process of both private and state entities would be simplified.
Launching Our Promising Sectors
Besides, the Kingdom aims to provide support to promising sectors which can boost
economy. With regards to manufacturing, industrial equipment and renewable energy would
be the focus. Also, tourism industry would be focused on so as to attract higher tourists
through easier visa norms and development of tourism related sites. To boost mining,
incentives and exploration benefits would be provided to interested parties. Despite the
efforts to diversify the economy, the company would continue to develop oil and gas sector

through the construction of a national gas distribution network, development an energy city
and doubling gas production.
Privatizing Our Government Services
Going forward, the private sector role and contribution to GDP would be increased from
current 40%. The various obstacles ailing the private sector growth would be removed and
growth opportunities to this sector would be provided. It is expected that in the near future,
private sector would play a greater role in extension of services such as health, education
which are essentially within the public sector today. Private sector capacity would be built
and foreign investments would be attracted to aid the transition.
Localised Defense Industries
There is intent to localise the defence production which would lower the spending on defence
and also provide a stimulus to the economy through enhanced industrialisation and higher job
creation. Currently, only 2% of the entire defence budget is spent domestically with very
limited organisations engaged. It is envisaged that by 2030, the domestic spending on
defence has to increase to over 50%. Direct investments would be encouraged and strategic
alliances with global producers would be forged to attract higher investment and technology
transfer besides aiding research and development to facilitate the localisation process.
A Mining Sector Contributing To The National Economy At Full Potential
Although the kingdom is blessed with host of natural resources but the contribution to GDP is
below expectations and thereby expected to increase by 2020 fostering job creation and
economic development. There is focus on a host of strategic reforms besides fostering
strategic international partnerships to improve productivity and competitiveness of national
players.
A Renewable Energy Market
Despite immense potential for renewable energy production, the current performance in this
regards is dismal. Localisation of various elements of value chain is critical. Additionally,
significant public and private investments in renewable energy sector would be required.
Also, necessary skills would be required in this regards coupled with fuel liberalisation.
Improving the Business Environment

Legislative reforms would be introduced in order to improve the business environment and
enhance the competitiveness for attracting private investment. The real estate reserve
available with the government would be strategically deployed to provide various crucial
services along with industrial sector and tourism related projects. The banking sector would
also be reformed so that the credit needs of the various sectors can be promptly met. The
custom procedures would be simplified which would allow easy movement of goods and
people.
Rehabilitating Economic Cities
With regards to previous decade economic cities, there were significant challenges faced and
hence potential was not realised. With regards to Jizan Economic City, efforts have been
made towards restructuring and same would be extended to other economic cities. For this,
the government would work in close cooperation with owners of these economic cities.
Establishing Special Zones
The Kingdom to aid business environment would create special zones in suitable locations
which would boost investment in various promising sectors. The applicable laws would be
flexible so as to boost investment and diversify government revenues.
Increasing the Competitiveness of Our Energy Sector
There is also a desire to enhance the energy sector competitiveness by rationalising subsidies
and enhance the role of market prices so as to ensure that there is greater competition and
investment in this sector. In this regards, the current issue of no eligibility criterion for
subsidies would be resolved so that only those who deserve may receive the same.
A Restructured King Abdullah Financial District
With regards to King Abdullah Financial District, commercial space oversupply was created.
Also the project faced challenges related to cost and time overruns. In order to enhance the
feasibility of such real estate projects in the future, the strategy has been fundamentally
altered. It is also planned that the real estate mix would be altered so as to allow greater
allocation towards residential accommodation along with hospitality.
Flourishing Retail Sector

Even though the retail sector is growing at significant pace and provides significant
employment opportunities, but the contribution of modern retail in Saudi market is still quite
low in comparison to GCC. By 2020, it is expected that the modern retail penetration would
be 80% through ease of restrictions related to investment, ownership and fostering alliances.
A Developed Digital Infrastructure
For advanced industrial activities, there is need of modern digital infrastructure through
participation of private sector. It is expected that broadband coverage in the near future would
improve significantly both in rural and urban areas. Support and governance of this digital
infrastructure would be achieved through a national council.
Building a Unique Regional Logistic Hub
Despite heavy investments in logistics and related infrastructure, the kingdom intends more
investments and international partnerships for linking up infrastructure. The laws and custom
procedures also are expected to simplify in future thereby aiding development of Saudi
Arabia as a logistic hub.
Integrating Regionally and Internationally
In order to exploit the close economic ties that the kingdom has connectivity and business
partnerships ought to be developed which would aid flow of capital, people and goods easily.
This could enable development of Kingdom as a major trade hub. In this regards, various
initiatives are intended with regards to improving physical linkage and unifying customs.
Supporting Our National Companies
Also, the Kingdom would leverage the various strengths and provide support to national
companies so that the exports are further developed and growth opportunities are pursued
through leadership both globally and regionally. Support would be extended to Saudi
companies with growth potential so that they can emerge as global leaders.