Saudi Arabia reviewing Vision 2030 projects to accelerate some and down scale others
Saudi Arabia’s Finance Minister Mohammed Al Jadaan yesterday said the kingdom would adapt to current economic and geopolitical challenges and “downscale” or “accelerate” some of its Vision 2030 projects.
Asked whether Saudi Arabia had to “mark-to-market” its expectations regarding the goals of the 14-year long programme, Mr Al Jadaan said: “Absolutely, yes.”
The kingdom could increase its gross domestic product growth rate by boosting oil production but such an expansion would not be “quality growth, but quantity growth,” the minister said during a panel session at a special meeting of the World Economic Forum.
Saudi Arabia, the Arab world’s largest economy, launched the 2030 vision programme in 2016 to diversify its economy away from oil, support private-sector growth, improve female workforce participation and reduce unemployment.
The kingdom has also announced a host of ambitious new projects to support its plans, such as Neom and the Red Sea Project.
The government was aiming to accommodate 1.5 million residents within The Line, a 170km-long linear smart city under construction in Neom, which is in the kingdom’s Tabuk province.
However, Bloomberg reported last week the project now looks set to host fewer than 300,000 residents by 2030, with officials expecting only 2.4km of the project to be completed by that time.
Neom did not respond to a request for comment.
On Friday, the Saudi Press Agency reported that out of the 1,064 initiatives introduced under the Vision, 87 per cent were complete or on track.
“We are not complacent but we are very pleased with what was achieved,” Mr Al Jadaan said. “A lot of the targets have been overdelivered, there are challenges obviously, and this is why I said we don’t have any ego. We will change, we will adjust [or] extend some of the projects. We will downscale some of the projects [and] accelerate other[s].”
The minister’s remarks come months after Saudi Aramco abandoned a plan to increase its production capacity to 13 million barrels per day from 12 million bpd currently. Aramco’s decision may have been influenced by escalating costs of developing new projects, ample spare capacity and weakening demand outlook for crude amid growing adoption of renewable energy and electric vehicles, analysts said at the time.
Amena Bakr, senior Middle East research analyst at Energy Intelligence, said Saudi Arabia’s decision to scale back oil production makes more commercial sense. “Rethinking and tweaking their strategy is key in achieving a balance between meeting Vision 2030 goals and budgetary constraints,” she told The National on the sidelines of the event.
Mr Al Jadaan also said developing economies should not be forced to pick a side between China and the US and its allies. “We should avoid forcing them to make a choice between two countries or two groups of countries,” he said.
“I think it is very difficult to go to Africa and say: ‘Listen, if you want us to help you, you need to stop dealing with China or if you want us to help, you need to stop dealing with the G7 [Group of Seven nations] or the US’.
Meanwhile, Kristalina Georgieva, managing director of the International Monetary Fund, said the divergence in economic growth is “deepening”.
“In advanced economies, the US is doing well but the eurozone is not. Within the emerging market economies … India, Indonesia and Malaysia … are doing well. China came a bit above expectations in its first quarter but then we have a number of countries that are facing significant difficulties,” she said at the same panel.
Calling for greater co-operation between wealthy and developing countries, Ms Georgieva said poorer countries have to play their part by introducing economic reforms. “They need to collect taxes, they need to fight corruption [and] they need to improve the quality of spending.”
There are challenges. We don’t have any ego. We will change, we will adjust or extend some of the projects
MOHAMMED AL JADAAN
Saudi Arabia’s Finance Minister