Saudi to invest $20b in AI by 2030, to review VAT increase

RIYADH: Saudi Arabia announced on Thursday it will invest $20 billion in artificial intelligence projects by 2030, as the country seeks to diversify its economy.

The kingdom, the Arab world’s biggest economy, launched an artificial intelligence strategy last month to atract investors as part of Crown Prince Mohammed Bin Salman’s “Vision 2030” plan to wean the kingdom off oil.

“Saudi Arabia will invest $20 billion from now until 2030,” said Abdullah Al Ghamdi, head of the Data and Artificial Intelligence Authority, which was established in 2019.

“We aspire to have artificial intelligence as a component of an alternative economy through startups and innovation companies... and view artificial intelligence as a source of savings and additional income,” he said during a G20 media briefing.

Ghamdi added that shares will be open to both foreign and local investors, as the country seeks to establish more than 300 start-ups in artificial intelligence by 2030.

Meanwhile, Saudi Arabia’s acting information minister on Thursday said the kingdom could review its VAT increase ater the novel coronavirus pandemic ends.

Saudi Arabia tripled value-added tax to 15% in July to offset the impact of lower oil revenue on state finances.

“This decision is like any other decision, it can be revised God willing when this crisis is over,” Majid Bin Abdullah Al Qasabi told reporters at a news conference, referring to the global pandemic.

The decision to triple VAT earlier this year was a “painful” one, Qasabi told reporters in a news conference.

“As his highness the Crown Prince said in his speech a few days ago, the decision to increase the VAT was a very painful decision.”

The G20 summit in Riyadh at the weekend is set to bring together the leaders of the world’s 20 richest nations.

The G-20 - whose member-countries represent around 85% of the world’s economic output and three-quarters of international trade - was founded in 1999 as a way for finance ministers and central bank governors to discuss the global economy.

In March, when border closures and lockdown orders to slow the spread of the virus affected well over a quarter of the world’s population, Saudi King Salman convened G-20 leaders virtually.

At the time, the recorded global death toll from the virus had just climbed past 22,000.

G-20 leaders vowed to share information and the material needed for research, to exchange epidemiological and clinical data, and to strengthen health systems. They also promised to work together to increase funding for vaccine research.

Quick research and sharing of scientific information for the development of COVID-19 tests and vaccines has happened.

The work on vaccines, which began only this year, may result in viable candidates soon.

But it’s arguable whether health systems have been strengthened; even in the wealthiest nations like the US and those in Europe, hospitals have become overwhelmed, and testing and contact-tracing programs have struggled.

In a recent leter to G-20 leaders, UN Secretary-general Antonio Guterres said the world faces its biggest test since the Second World War.

“The pandemic must be a wake-up call to all leaders that division is a danger to everyone, and that prevention saves money and lives,” he wrote.

He commended the recent G-20 decision to offer the hardest-hit poor nations an extension on debt repayments, and in the most severe cases, possible debt write-offs. But he also urged the group to expand coverage to include vulnerable middle-income countries.

Saudi Arabia’s turn at the rotating presidency for the first time has been an immense point of pride for the kingdom.

African countries face another debt crisis and will need more long-term help than the latest G20 debt plan offers them to ward off trouble ahead and keep much-needed investments coming in, according to policymakers, analysts and investors.

Around 40% of sub-saharan African countries were in or at risk of debt distress even before this year, while Zambia became the continent’s first pandemic-era default last Friday.

The United States, China and other G20 countries have offered the world’s poorest countries - many of which are in Africa - relief until at least mid-2021 and sketched out rules for rescheduling government debt to help fend off the risk of default in the wake of the coronavirus crisis.

But these plans to provide near-term breathing space might not go far enough.

“In 2021 a robust liquidity and structural response, recovery and reset toolbox must be developed in partnership between emerging markets, the private sector and the G20,” warned Vera Songwe, executive secretary at the UN Economic Commission for Africa.