WHOLESALE CAPACITY BUILDING

Saudi Vision 2030 is underpinned by the National Industrial Development and Logistics Program (NIDLP). Now, component agencies such as SIDF have upped their efforts to implement policies supportive of a smart and diversified economy.

required to ultimately build its own capacities. Indeed, with USD210-billion worth of agreements signed at the Future Investment Initiative 2018, of which USD165 billion was under NIDLP, the Kingdom targets total investments of around USD427 billion by 2030 and the creation of no less than 1.6 million new jobs.

THE LOGIC BEHIND LOGISTICS

A brief glance at just one of the four target sectors, logistics, provides ample insight into the issues pertaining to all four. What’s more, it is at the heart of the commercial flexibility required by Vision 2030. Given Saudi Arabia’s ideal location at the East and West crossroads on the vital Red Sea commercial route, it is ideally placed to capitalize on the MENA and West Africa regions. And yet official figures cited in the NIDLP Delivery Plan 2018-2020 indicate that in 2016, the KSA—home to 12 logistics zones—ranked 52nd on the Logistics Performance Index (LPI), falling short on human capital and efficiency benchmarks.

NIDLP is also a hard taskmaster in assessing the efficiency of state entities, which are to pursue the same international benchmarks as their private-sector counterparts. The potential for improvement has galvanized relevant bodies—as in other sectors—to move in unison. Accordingly, the Ministry of Transport (MoT), Saudi Ports Authority (SPA), Saudi Customs, and the Ministry of Economy and Planning (MEP) have drafted a plan of action, fueled by SAR7 billion of investment opportunities, addressing core issues including the ease of arranging international shipments, efficiency issues such as 24-hour clearance, infrastructure readiness, and the ability to track shipments. Billions are also earmarked for enhancement of the Kingdom’s roads and airports, with the scope for private sector participation.

In short, the race is on to develop the nation's sustainable core capacities. The Kingdom, a leading diplomatic player in a highly turbulent region, is also a major military spender. Its ambitious goal of localizing half of its military and security spending by 2030, from under 5% today, is emblematic of the wider reaches of the NIDLP. ✖

Osama bin Ibrahim Abdouh

CEO, METRO JEDDAH COMPANY (MJC)