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On Tuesday, Saudi Arabia unveiled a new National Industry Strategy to triple industrial output and increase the value of the country's exports to $149 billion by 2030. According to the state-run news agency SPA, the strategy aims to increase non-oil exports, diversify the economy, attract investment into the sector, and increase the kingdom's gross domestic product. For the kingdom to generate sustainable economic returns by 2030, the new program identifies 800 investment opportunities worth $266.2 billion.
With the National Industry Strategy and in collaboration with the private sector, the Kingdom of Saudi Arabia will become a leading industrial force, contributing to the security of global supply chains and exporting high-tech goods to the world, according to Saudi Crown Prince Mohammed bin Salman, who announced the strategy. To build a competitive and sustainable industrial economy, we already have all the necessary building blocks.
According to the S&P Global purchasing managers' index, despite worries about inflation and general macroeconomic headwinds, business activity in Saudi Arabia's non-oil private sector economy continued to improve in September as output and new orders rose significantly on strong demand. The index reading for September was 56.6, down from 57.7 in August, but it still showed that the country's non-oil private sector economy was doing better for the 25th consecutive month. A reading that is above the neutral value of 50 denotes expansion, while one that is below it denotes contraction.
According to the International Monetary Fund, Saudi Arabia's economy is anticipated to expand at its fastest rate in a decade and may rank among the fastest-growing in the world this year. The kingdom's economy expanded by 12.2 percent in the second quarter, faster than expected and at its fastest rate in more than ten years thanks to higher oil prices. The OECD predicts growth of 9.9 percent, Saudi investment bank Jadwa Investment forecasts output this year at 8.7 percent, and the International Monetary Fund predicts growth of 7.6 percent for Saudi Arabia's GDP after 3.2 percent growth in 2021.
According to SPA, the new strategy calls for the kingdom to add 36,000 factories by 2035, up from 10,640. According to the news agency, the plan aims to bring the total amount of new investments in the industry to 1.3 trillion Saudi riyals ($345.9bn). The kingdom has a lot of opportunities to find new industrial prospects that help it achieve sustainable growth, according to Bandar bin Ibrahim AlKhorayef, minister of Industry and Mineral Resources.
The new initiative will increase private sector investments in the industrial sector, raise the proportion of non-oil exports, strengthen the industrial economy's reliance on research and innovation, put an emphasis on high-value products, and broaden the kingdom's economic base. According to the minister, the strategy consists of over 136 initiatives. These include programs for producing industrial goods like specialized chemical installations and the processing of rubber and plastics.
Other initiatives concentrate on enabling the industrial sector with soft loans to finance advanced manufacturing capabilities and offering incentive packages for investors. According to Mr. AlKhorayef, the strategy identified, examined, and developed policies to support sector empowerment. Additionally, work has been done to create special initiatives for 12 industrial activities, including the food, pharmaceutical, medical device, and marine industries. According to SPA, the strategy was developed with an eye toward global trends like the Fourth Industrial Revolution, zero-carbon targets, and the difficulties faced by global supply chains. More than 300 top executives contributed to its development, which was done in collaboration with the private sector.
Yash Ranjan10/19/2022
