Atlantic Council

Report Part Title: HOW IS VISION 2030 TO BE IMPLEMENTED?

Report Title: ASSESSING SAUDI VISION 2030:

Report Subtitle: A 2020 REVIEW
Report Author(s): Stephen Grand and Katherine Wolff
Published by: Atlantic Council (2020)
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 Assessing Saudi Vision 2030: A 2020 Review

HOW IS VISION 2030 TO BE IMPLEMENTED?

T
he Saudi government has established a num-
ber of government entities to help implement Saudi Vision 2030 Vision Realization Programs1
Vision 2030, from a new Council of Economic and
Development Affairs (CEDA) that shapes and pe-
riodically refines the overarching strategy, to a Strategic 1. Financial Sector Development Program*
Management Office within that council that translates the
2. Fiscal Balance Program*
Vision 2030 strategy into concrete government programs,
to a National Center for Performance Management (Adaa) 3. Hajj and Umrah Program
that monitors progress in implementing those programs by
tracking how the programs are reaching their KPIs.36 4. Housing Program*
5. Human Capital Development Program
Vision 2030 is to be achieved through thirteen Vision
Realization Programs (VRP). Each VRP is responsible for 6. National Character Enrichment Program
creating a strategy and set of projects across a number
7. National Companies Promotion Program
of the ninety-six strategic objectives laid out in the Vision
2030 vision statement. For each VRP, a program commit- 8. National Industrial Development and Logistics
tee coordinates activity and charts progress, under the Program*
direction of a chairman (typically a minister-level cabinet
official) assigned by the CEDA. Each VRP has a detailed 9. National Transformation Program*
delivery plan laying out international benchmarks, program 10. Privatization Program*
metrics and targets for KPIs, strategic pillars of the pro-
gram, how the program interacts with other VRPs, a full 11. Public Investment Program*
portfolio of initiatives, the government entities that will take
12. Quality of Life Program*
on these projects, a timeline, and a budget.
13. Strategic Partnership Program
Ministers and department heads are now responsible for
meeting the goals of Vision 2030. The CEDA’s Strategic Af- * Of the thirteen total VRPs, the eight marked with an asterisk have
fairs Office assigns each ministry or implementing agency detailed information available on the Vision 2030 website about
various KPIs. CEDA and the crown prince are reportedly strategy, KPIs, initiatives, and in some case regular updates on
progress. For greater detail about the thirteen vision programs, their
holding ministries to account for those KPIs, and the imple- activities, key acting bodies, representative initiatives, and goals and
menting agencies have a new awareness of the scrutiny objectives, see Appendix A on pages 66-71.
over their programs.37 The new National Center for Perfor-
mance Measurement, or Adaa, is said to have developed
a “dashboard” with over seven hundred indicators to mon-
itor progress.38 contained mostly within the second objective of building a
thriving economy and include:
As should be evident, Vision 2030 is a far-reaching, multi-
dimensional effort that touches upon almost every aspect ■ establishing fiscal balance;
of Saudi life: how citizens learn and work, cultural and en-
tertainment options available to them, the livability of their ■ improving the functioning and capacity of the govern-
communities, how they get from place to place, their char- ment;
itable activities, and exercise habits. We will focus here on
the lines of effort in the Vision 2030 strategy that advance ■ achieving greater workforce utilization and employment
most directly its core mission: diversifying the country opportunities, particularly in the private sector, while si-
away from oil by developing the private sector and increas- multaneously improving the quality of education and
ing private-sector employment. These lines of effort are tailoring it to workforce needs;

36 “KSA Vision 2030 Strategic Objectives and Vision Realization Programs.”

37 Author interviews, March 2019.
38 Gregory Warner, “Episode 821: The Other Davos,” NPR, January 31, 2018, https://www.npr.org/sections/money/2018/01/31/582233478/episode-821-
the-other-davos. The National Center for Performance Management (“Adaa”), has a web presence, though the dashboard is not publicly available;
“Performance Measurement Operations,” accessed February 24, 2020, https://www.adaa.gov.sa/en/Performance%20Measurement%20Operations.

ATLANTIC COUNCIL 17
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Assessing Saudi Vision 2030: A 2020 Review

SAUDI VISION GOVERNANCE MODEL

LEVEL 1
Defining directions and Council of Ministers Support Units
making decisions ■ Finance Committee
■ CEDA’s Project
Council of Economic and
Management Office
Development Affairs
■ “Adaa” National Center for
Performance Management
■ Ministry of Economy and
LEVEL 2 Planning
Developing strategies Strategy Committee
■ Delivery Unit
■ Communication Team at
CEDA
Strategic Management Office

Public
Aramco Private Sector
Investment National Regional
Strategic “Daem” Growth
Fund (PIF) Transformation Development
Transformation Program Stimulation
Restructuring Program Plan*
Program Plan*
Program

LEVEL 3
Implementing Execution bodies

Initiatives

* Additional programs under consideration. Source: “Vision 2030 Operations Framework Set Up,” Arab News, June 4, 2016

■ addressing foreign talent and the dual labor market; In the section below, we describe the nature of these ef-
forts. In a succeeding section, we seek to evaluate their
■ providing greater opportunities for women; effectiveness.

■ improving the business environment through regulatory

ESTABLISH FISCAL BALANCE
reforms;
Following the plunge in oil prices in mid-2014, the Saudi
■ nurturing a culture of innovation and entrepreneurship government confronted a budget shortfall in 2015 of 15
and the growth of small- and medium-sized enterprises; percent of GDP, which required it to spend down $116
billion (424 billion SAR) in reserves that year, nearly 16
■ privatizing select industries and attracting foreign direct percent of total official reserves. The most urgent task,
investment; therefore, was to stem the bleeding and stabilize the mac-
roeconomic situation. Saudi officials undertook a number
■ opening the social sphere to enable new sectors; and of fiscal measures to this end in the immediate aftermath
of the economic downturn. They cut government expen-
■ maximizing investment opportunities by making the ditures sharply in 2016 as the kingdom reevaluated its
Public Investment Fund the largest sovereign wealth spending priorities and budgeting procedures.
fund in the world and developing megaprojects.

18 ATLANTIC COUNCIL
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 Assessing Saudi Vision 2030: A 2020 Review

GDP growth

6%

5%

4%

3%

2%

1%

0%

-1%

-2%

-3%
2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021*
*Projected

Source: “Real GDP growth” (Saudi Arabia), IMF Datamapper, https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/SAU?year=2020

Public debt to GDP ratio

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%
2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021*
*Projected

Source: “Gross Dept Position” (Saudi Arabia), IMF DataMapper, https://www.imf.org/external/datamapper/G_XWDG_G01_GDP_PT@FM/

SAU?year=2020.

ATLANTIC COUNCIL 19
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Assessing Saudi Vision 2030: A 2020 Review

SAMA total foreign reserves

1600

1400

1200

1000
($ billion)

800

600

400

200

0
Apr-2009

Oct-2009
Jul-2009
Jan-2009

Jan-2020
Apr-2010

Oct-2010

Apr-2015

Apr-2016

Apr-2019
Apr-2012

Oct-2015

Oct-2016

Apr-2018

Oct-2019
Jul-2010

Oct-2012

Oct-2018
Apr-2013

Apr-2014

Jul-2015

Jul-2016

Jul-2019
Jul-2012
Jan-2010

Oct-2013

Oct-2014

Jul-2018
Jan-2016

Jan-2019
Jan-2012

Jul-2013

Jul-2014

Jan-2015

Apr-2017

Jan-2018
Oct-2017
Jan-2013

Jan-2014

Jul-2017
Jan-2017
Apr-2011

Oct-2011
Jul-2011
Jan-2011

Gold, SDR, and position in the IMF Bank deposits Foreign securities Total reserve assets

Source: Saudi Arabian Monetary Authority Monthly Statistics, Monthly Bulletin March 2020, April 28, 2020, http://www.sama.gov.sa/
en-US/EconomicReports/Pages/MonthlyStatistics.aspx; Jadwa Investment, Saudi Chartbook, February 2020, http://www.jadwa.com/en/
researchsection/research/chart-books.

Although oil revenues continued to fall through early 2017, the intention of supporting a struggling private sector as
the kingdom managed to cut the budget deficit to 4.6 per- it adapted to a severe drawback in government spending
cent by 2018 and to slow the depletion of its foreign re- on projects and contracts awarded.
serves, which stabilized in 2018 and rose slightly in 2019.
The steps included reining in government expenses in By late 2017, oil prices had risen—not to pre-2014 lev-
2016 and testing the waters with international bond sales els, but enough to register growth in government reve-
for the first time (while continuing to draw on domestic nues. With the release of the 2018 budget, the Ministry
debt markets), in concert with a recovery in oil prices. of Finance announced it would ease some austerity mea-
sures and increase government spending overall by 5.6
The spending cuts announced in the 2016 budget re- percent, following a severe year for a private sector re-
mained in force throughout the year and into 2017. Within liant on government spending and amid economic con-
the first months after Vision 2030’s announcement, the traction. The goal of a balanced budget was pushed from
Saudi government reduced wages for ministers, housing 2019 to 2023, which experts (and the IMF) largely agreed
and car allowances for members of the advisory body the nation could afford for now, given its still low debt-
known as the Shura Council, and overtime pay and va- to-GDP ratio and significant (if depleted) foreign reserves.
cations for all government employees.39 As the govern- However, the strategy is reliant on borrowing and dipping
ment cut spending, the Saudi Arabian Monetary Authority further into reserves on the assumption of higher future oil
simultaneously embarked on a “supportive monetary pol- prices and is a transitional rather than a sustainable strat-
icy” and injected nearly $5.3 billion into Saudi banks, with egy over the long term.40

39 Paul and Browning, “Saudi Arabia Slashes Ministers’ Pay,” Reuters, September 26, 2016; John Kemp, “Saudi Arabia Eases Austerity Just as Oil Prices
Decline,” Reuters, June 21, 2017, https://www.reuters.com/article/us-saudi-reform-kemp/saudi-arabia-eases-austerity-just-as-oil-prices-decline-kemp-
idUSKBN19D03W. In early 2017, the government reinstated all wage and benefit allowances that had been removed.
40 “Saudi Arabia: 2019 Article IV Consultation—Press Release; and Staff Report,” IMF Country Report No. 19/290, September 9, 2019, https://www.imf.org/en/
Publications/CR/Issues/2019/09/09/Saudi-Arabia-2019-Article-IV-Consultation-Press-Release-and-Staff-Report-48659.

20 ATLANTIC COUNCIL
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 Assessing Saudi Vision 2030: A 2020 Review

The move to expand government spending coincided with the institutional effectiveness to reach the goals of Vision
the introduction of several new revenue-generating mea- 2030. The aim is to strengthen government capacity and
sures: the value-added tax (VAT) in January 2018 at a 5 efficiency in order to be able to achieve the program’s am-
percent rate and a hike in the expat levy (introduced in bitious mandate. Thirty-seven of Vision 2030’s ninety-six
July 2017), a monthly fee that businesses pay on each non- strategic objectives sit with the NTP, which will be mea-
Saudi worker employed. Other revenue streams include a sured through ninety-two main KPIs and 224 sub-KPIs and
tax (introduced in summer 2017) on tobacco, energy drinks, implemented through 433 initiatives and projects.
soft drinks, and a December 2019 expansion to cover all
drinks with added sugar.41 Many of the initiatives involve making government services
accessible online. The aim is to more effectively provide
The government also began reducing a number of energy information to citizens, receive feedback on programs,
subsidies—notably on electricity and gasoline—that bur- and streamline services across the government. Adaa, for
den the budget and distort the domestic energy market.42 example, launched a smartphone app to solicit feedback
To protect the most vulnerable parts of the population, the from Saudis on the receiving end of government services
Ministry of Labor and Social Development announced a and measure citizen satisfaction, and provide easy access
new social welfare program in December 2017, the Citizens to electronic government services.45 Similarly, the existing
Account program, that replaces the subsidies with monthly smartphone app Absher has provided Saudis the option
cash payments of up to $100 (SAR 382) for individuals in to access Department of Motor Vehicle services, request
low- and middle-income households.43 As of February government documents, book appointments, and apply for
2019, nearly 3.75 million beneficiaries were receiving sup- visas and more since 2015.46
port from the program.44
To improve the government procurement process, the
In 2020, Saudi Arabia is facing a -2.3 percent GDP growth, Ministry of Finance launched the electronic platform
and will struggle once again to achieve fiscal balance. It is Etimad in 2018, for use both by government entities and
too early to assess the success of that effort, and to what private-sector contractors.47 The platform should “enable
degree the economic stimulus will be aligned with the government agencies to effectively manage their fiscal
goals of Saudi Vision 2030 versus competing for funding. resources and govern the accounting cycle, as well as
[bolster] transparency,” and potentially provide greater
opportunities to smaller contractors.48 Legal services—
IMPROVE THE FUNCTIONING AND CAPACITY OF
including court summons, online filings, marriage con-
THE SAUDI GOVERNMENT
tracts, notarization, mortgage authorization, and real-time
One of the most visible of the VRPs is the National online advice—are now available through the Ministry of
Transformation Program 2020 (NTP). Under the NTP, Justice.49 The Saudi Arabian Monetary Authority launched
twenty-four government agencies that work on economic an electronic bill-payment system for companies, and the
and development issues are being restructured to have Ministry of Health offers an app to provide virtual medical

41 “Saudi Arabia’s Excise Tax on Sugary Drinks Won’t Impact Businesses, Investments in Long Term,” Saudi Gazette, January 7, 2020, http://saudigazette.
com.sa/article/586450.
42 “Saudi Arabia Slows Phasing Out of Energy Subsidies,” Reuters, December 20, 2017, https://af.reuters.com/article/africaTech/idAFL8N1OK2PQ.
43 The individual entitlement is based on household income, and household transfers are computed based on the number of household members, using
an OECD-modified scale (referring to the Organisation for Economic Co-operation and Development). “Saudi Arabia: 2018 Article IV Consultation—Press
Release and Staff Report,” IMF Country Report No. 18/263, August 24, 2018, 64, https://www.imf.org/en/Publications/CR/Issues/2018/08/24/Saudi-Arabia-
2018-Article-IV-Consultation-Press-Release-and-Staff-Report-46195.
44 Beneficiaries include heads of households and individuals, so the actual number of Saudis benefiting from the program exceeds 3.75 million. “3.73 Million
Benefit from Saudi Citizen Account Program in February,” Asharq al-Awsat, February 22, 2019, https://aawsat.com/english/home/article/1603381/373-mn-
benefit-saudi-citizen-account-program-february.
45 Noor Nugali, “Smartphone Application Launched to Improve Public Agencies’ Services in Saudi Arabia,” Arab News, February 15, 2019, https://www.
arabnews.com/node/1452376/saudi-arabia.
46 The app came under scrutiny in 2019 when it was found and reported that the app could notify male guardians when one of their female dependents put
in a visa application. Defenders of the app maintained that permission from a male guardian was (at the time) required for a woman in Saudi Arabia to
travel regardless of the app. “Saudi Arabia’s Absher App: Controlling Women’s Travel While Offering Government Services,” Human Rights Watch, May 6,
2019, https://www.hrw.org/news/2019/05/06/saudi-arabias-absher-app-controlling-womens-travel-while-offering-government.
47 “Ministry of Finance Launches Etimad—the Digital Services Platform,” Ministry of Finance (Saudi Arabia), January 20, 2018, https://www.mof.gov.sa/en/
MediaCenter/news/Pages/news_20012017.aspx.
48 “Fiscal Balance Program Q1 2019 Quarterly Newsletter,” Kingdom of Saudi Arabia Vision 2030, https://vision2030.gov.sa/en/programs/FBP.
49 Abdulaziz Al-Bosaily and Ahmed Almazed, “Saudi Courts Pushing Forward to Go Online,” Clyde & Co., March 12, 2018, https://www.clydeco.com/insight/
article/ksa-courts-pushing-forward-to-go-online; Adnan Shabrawi, “Justice Ministry Starts Issuing E-marriage Contracts,” Saudi Gazette, May 23, 2019,
http://saudigazette.com.sa/article/567084/SAUDI-ARABIA/Justice-Ministry-starts-issuing-e-marriage-contracts; “Saudi Justice Ministry’s E-services Speed
Up Powers of Attorney,” Arab News, December 18, 2018, https://www.arabnews.com/node/1422786/saudi-arabia; “13,600 Mortgage E-authentications
Completed, Saudi Ministry Reports,” Arab News, June 26, 2019, https://www.arabnews.com/node/1516251/saudi-arabia; Najiz portal, Ministry of Justice
website, https://najiz.moj.gov.sa/Account/Login?ReturnUrl=%2FHome%2FDashboard.

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Assessing Saudi Vision 2030: A 2020 Review

Screen captures from mobile applications hosted by the Ministry of Finance (Etimad), Ministry of Health (Mawid), and Adaa (Watani) to make
government services available online.

consultations and improve communication among net- workforce continues to increase and the Saudi labor force
works of medical providers.50 In September 2019, the gov- is expected to see between 500,000 and 1.4 million new
ernment launched a new e-visa program to attract tourists workers by 2023, assuming the economic participation
from forty-nine countries around the world.51 (Saudi Arabia rate stays low.52 In the fourth quarter of 2019, the unem-
previously did not have a tourist visa option other than for ployment rate stood at 12.0 percent.53 Unemployment is
religious tourists.) highest for young Saudis—the number ranges between
35 percent and 60 percent for women under thirty-five
years of age, and from 5 percent to 17 percent for men in
ACHIEVE GREATER WORKFORCE UTILIZATION
the same age range.54 While education and literacy rates
AND EMPLOYMENT RATES FOR SAUDIS
are high in Saudi Arabia, the overall quality of education
Over the longer term, the most daunting challenge that needs improvement and the skills mismatch for the pri-
the Saudi government faces is finding jobs for a rap- vate sector is significant. Saudi students rank below the
idly expanding workforce, without simply expanding the average in international rankings for math and science,
public sector. The number of young Saudis entering the and they graduate at higher rates in the humanities and

50 “Saudi Arabia Launches E-invoice Payment Platform for Businesses,” Saudi Gazette, June 30, 2019, http://saudigazette.com.sa/article/570483/BUSINESS/
Saudi-Arabia-launches-e-invoice-payment-platform-for-businesses; Hussein Hazzazi, “ ‘Med Consult’ App for Patient Safety Launched,” Saudi Gazette,
March 2, 2019, http://saudigazette.com.sa/article/560286/SAUDI-ARABIA/Med-Consult-app-for-patient-safety-launched; Mohammed Al-Kinani, “Saudi
Arabia to Set a Global Example in Patient Safety,” Arab News, March 2, 2019, https://www.arabnews.com/node/1460316/saudi-arabia.
51 Tariro Mzezewa, “Saudi Arabia Invites Tourists: What You Need to Know,” New York Times, October 1, 2019, https://www.nytimes.com/2019/09/27/travel/
saudi-tourist-visa-questions.html.
52 “Saudi Arabia: Selected Issues,” IMF Country Report No. 18/264, August 2018, 30, https://www.imf.org/en/Publications/CR/Issues/2018/08/24/Saudi-Arabia-
Selected-Issues-46197.
53 As compared to the 2020 goal of an unemployment rate of 10.5 percent. Karen E. Young, “Saudi Arabia’s Crisis Is Economic and Demographic,” remarks
from “Saudi Arabia in Crisis,” a Hoover Institution panel, posted on the American Enterprise Institute website on November 8, 2018, https://www.aei.org/
research-products/speech/saudi-arabias-crisis-is-economic-and-demographic/.
54 “Labor Force, Third Quarter 2019,” General Authority for Statistics (Saudi Arabia).

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 Assessing Saudi Vision 2030: A 2020 Review

Unemployment rates for Saudis by age

70%

60%

50%

40%

30%

20%

10%

0%
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 64-60 65+
Ma le Female

Source: “Labor Market, Fourth Quarter 2019,” General Authority for Statistics (Saudi Arabia), https://www.stats.gov.sa/en/814.

religious studies than any of the science, technology, en- By 2020, the Ministry for Labor and Social Development
gineering and mathematics (STEM) fields or vocational (MLSD) would like to see 50 percent of job seekers look-
programs.55 ing to the private sector, one million Saudis having com-
pleted job training (from 36,000 in 2016), and 950,000
Enhance the Attractiveness of Private-Sector Saudis having enrolled in technical or vocational training
Employment programs (from 104,000 in 2016). To reach these goals,
the MLSD laid out plans for a number of new initiatives
When young Saudis are surveying their career options, to: subsidize job training and increase training for new
government jobs offer higher wages, easier working hours, employees using technology; encourage teleworking,
and higher social prestige than the private sector. A Saudi flexible staffing, and part-time work in the private sec-
man entering the private sector, on average, can expect tor; create a placement system and other programs to
to earn only 65 percent compared with his public-sector improve labor market efficiency and job matching; ex-
counterparts. Saudi women fare worse: the average wage pand wage protection and working conditions; and
in the private sector reaches only 45 percent of the pub- equalize and improve working conditions for women
lic-sector average. through expanding day-care options, improving access

55 In the last Trends in International Mathematics and Science Study (TIMSS), Saudi students were at or near the bottom of the range of average scores.
Fourth-grade Saudi students had an average score of 383 compared with the scale “centerpoint,” or mean of overall achievement distribution, of
500; for eighth-grade Saudi students, the average was 368. As a caveat, the study notes “reservations about reliability [of the results] because
the percentage of students with achievement too low to estimate exceeds 25 percent.” There are limited statistics available for Saudi educational
achievement levels compared to international standards, and this study can be considered indicative rather than conclusive. Stephen Provasnik, Lydia
Malley, Maria Stephens, Katherine Landeros, Robert Perkins, and Judy H. Tang, Highlights from TIMSS and TIMSS Advanced 2015, National Center for
Education Statistics, a unit of the Institute of Education Sciences, US Department of Education, November 29, 2016, https://nces.ed.gov/pubsearch/
pubsinfo.asp?pubid=2017002.

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Assessing Saudi Vision 2030: A 2020 Review

to transportation, and discouraging employment discrim- economic transformation requires luring foreign talent and
ination against women. know-how to Saudi Arabia. It proposes measures to im-
prove the living and working conditions of expatriates to
Improve the Quality of Education and Workforce make the country a more attractive destination for highly
Training skilled workers. While Saudi Arabia is already able to offer
high wages to high-skilled foreign workers, many foreign-
Under Vision 2030, the Ministry of Education is tasked with ers are deterred by the country’s restrictive social code.
improving education standards and outcomes.56 One KPI Many of the recent announcements meant to draw in tour-
is to have five universities in the top two hundred by 2030. ists—including the loosening of the dress code of abayas
Many Saudis working in elite professions or with access for foreign women—may also appeal to high-skilled foreign
to the means to pay for schooling were educated abroad workers. The Saudi General Investment Authority also an-
and share a concern that the public school system in Saudi nounced a new residency scheme for high-skilled workers
Arabia is not up to rigorous international standards, partic- that reduces the bureaucratic burden, offers the ability to
ularly in primary and secondary education.57 This fear ap- own property, and allows workers to serve as their own
pears valid based on international test scores.58 The MLSD employment sponsor in exchange for a sizable fee.62
is working closely with the Ministry of Education to modern-
ize and improve school curricula, create a centralized data- Address the Dual Labor Market
base to track students’ educational progress, and expand
business, economics, STEM, and vocational study pro- These policies to attract high-skilled expats conflict at times
grams.59 The Ministry of Education is focused on improving with another longstanding effort by the government to in-
the teacher workforce and the educational environment, crease jobs for Saudi nationals through the “Saudization”
updating curricula, better aligning the education system of the workforce. Saudization aims to employ more Saudis
with labor-market needs, and increasing private-sector in- in jobs currently filled by expatriate workers by closing the
volvement in education and training (including attracting gap in cost for employers between expatriates and nation-
private-sector investments in school construction). als. Expatriate workers from South Asia and other Arab
countries dominate the Saudi labor force—and the private
Vocational and technical programs, as offered through the sector in particular—because of their willingness to work for
Technical and Vocational Training Corporation and through lower wages, for longer hours, often under subpar work-
other state entities (including the General Entertainment ing conditions.63 Non-Saudis make up around 60 percent
Authority and the crown prince’s MiSK Foundation), span of employed people in Saudi Arabia, and 80 percent of
a wide variety of job types, from marketing and human re- employees in the private sector. Many expatriates work in
sources to industrial engineering and information technol- construction, as drivers or domestic workers, and in other
ogy.60 The planned entertainment city, Qiddiya, which is positions that Saudis, so far, have been reluctant to fill.
expected to open in 2023 and employ 17,000 people, has
its own training program as well—fulfilling the mandate for The Nitaqat program, a primary engine of Saudization, was
employers to provide job training for employees.61 enacted in 2011 by King Abdullah. The program requires
companies to employ a certain ratio of Saudi workers to
Attract Foreign Talent expatriates (with the quota dependent on the size of the
company, the industry, etc.). Companies that fail to comply
In addition to improving the quality of education and train- receive a poor rating in the Nitaqat system and face barri-
ing for its Saudi workforce, Vision 2030 recognizes that ers to operation: the inability to secure new foreign visas,

56 “Education and Vision 2030,” Saudi Ministry of Education website, https://www.moe.gov.sa/en/Pages/vision2030.aspx.

57 Author interviews, March 2018.
58 Highlights from TIMSS and TIMSS Advanced 2015.
59 Saudi Arabia Labor Market Report 2016, Ministry of Labor and Social Development, July 2016.
60 “2,258 Saudi Graduates Offered On-job Training,” Saudi Gazette, March 18, 2019, http://saudigazette.com.sa/article/561489/SAUDI-ARABIA/2258-Saudi-
graduates-offered-on-job-training; “Saudi Arabia Launches Adult Courses to Wean Kingdom Off Expats,” Arabian Business, June 15, 2017, https://www.
arabianbusiness.com/saudi-arabia-launches-adult-courses-wean-kingdom-off-expats-677785.html; “Saudi Technical and Vocational Training Program Aims
to Empower Youth,” Arab News, November 17, 2018, https://www.arabnews.com/node/1406491/saudi-arabia; “GEA-MiSK Training Program Launched to
Prepare Saudi Students for Job Market,” Arab News, May 10, 2019, https://www.arabnews.com/node/1494991/saudi-arabia; “MiSK Academy Launches 14
Programs to Train Young Saudis,” Arab News, September 2, 2019, https://www.arabnews.com/node/1548401/saudi-arabia.
61 Lojien Ben Gassem, “Developers Reveal More Details about Qiddiya, the Saudi Entertainment Supercity,” Arab News, July 25, 2019, https://www.
arabnews.com/node/1530496/saudi-arabia.
62 Ahmed Al Omran, “Saudi Arabia Woos Foreign Workers with New Residency Scheme,” Financial Times, May 15, 2019, https://www.ft.com/
content/266c9940-772c-11e9-bbad-7c18c0ea0201; “Saudi Arabia Launches Special Residency Scheme for Expats,” Reuters, June 23, 2019, https://www.
reuters.com/article/us-saudi-expats/saudi-arabia-launches-special-residency-scheme-for-expats-idUSKCN1TO0BM.
63 The average Saudi man in the private sector earns 60 percent more than a non-Saudi man. “Saudi Companies Pay 59% Less for Same Job in Public Sector,”
Saudi Gazette, June 23, 2019, http://www.saudigazette.com.sa/article/569742/SAUDI-ARABIA/Saudi-companies-pay-59-less-for-same-job-in-public-sector.

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 Assessing Saudi Vision 2030: A 2020 Review

Riyadh, Saudi Arabia. Source: Wikimedia Commons/lawepw (https://commons.wikimedia.org/wiki/File:Riyadh,_Saudi_Arabia_(2048x1367)_

(36864830374).jpg)

a freeze on expansion, and lack of access to other min- undergone or are being considered for partial or total
istry services. After the implementation deadline in 2013, Saudization in the coming years.65
200,000 out of a total of two million companies closed due
to their inability to afford Saudization. The program has On top of the Nitaqat quotas, Saudi Arabia in July 2017
been phased in over several years, and new phases typi- implemented a new expat levy, or a monthly fee, on non-
cally bring about higher nationalization quotas and harsher Saudi workers. Under the new scheme, Saudi companies
punishments for failure to comply.64 and foreign workers each bear a fee. Companies pay a
fee per non-Saudi employee, and companies that employ
The Saudi government has also implemented Saudization more Saudis pay a lower fee on each expatriate worker
by directive in the case of certain sectors. Specific kinds compared to those that employ fewer Saudis. Under the
of work have been restricted to Saudi employees only. same program, foreign nationals must pay a fee on each
Again, this is not a new policy, but it is one that has been dependent they sponsor. The expat levy was introduced in
expanded since the start of Saudi Vision 2030. Certain 2012, and in 2017 the government raised the fees for com-
jobs in the retail sector, the hospitality and tourism sector, panies and introduced the fee paid by workers on foreign
nongovernmental organizations, and grocery stores have dependents. The fees on companies and workers have in-

64 P. K. Abdul Ghafour, “Nitaqat: 200,000 Firms Closed Down,” Arab News, August 05, 2014, https://www.arabnews.com/news/featured/611896.
65 “Saudization in 12 Retail Sectors; Inspections Begin in 12 Days,” Saudi Gazette, August 29, 2018, http://saudigazette.com.sa/article/542169; “41 Job
Types Designated as Saudi-only,” Arab News, December 16, 2018, https://www.arabnews.com/node/1421836/saudi-arabia; Abdul Rahman Al-Misbah,
“Saudization of Groceries ‘to Save SR6bn in Remittances’,” Saudi Gazette, December 29, 2018, http://saudigazette.com.sa/article/551231; “Labor Ministry:
100% Saudization of 20 Hospitality Jobs as of Next Year,” Saudi Gazette, July 26, 2019, http://saudigazette.com.sa/article/573105.

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Assessing Saudi Vision 2030: A 2020 Review

creased gradually from 2017 to 2020.66 In addition to serv- to the Shura Council and allowing women to participate
ing as a new revenue stream (estimated at $7.5 billion in in municipal elections, and sending young Saudi men and
2018 and $15 billion in 2019), the program hopes to incen- women abroad to study through an expansive scholarship
tivize further Saudi employment in the private sector. The program.70
IMF assesses that, when fully implemented (planned for
the end of 2020), the expat fee will account for 20 percent Under Vision 2030, many of the social reforms expanding
of the wage gap between Saudi and non-Saudi workers.67 opportunities for Saudi women are meant to increase the
number of women in the workforce—some explicitly and
Ostensibly, the two policies are targeted toward different others as a secondary goal.
segments of the labor market. Saudi Arabia wants to attract
high-skilled workers from around the world to help it de- The Ministry for Labor and Social Development launched a
velop new industries beyond oil that will eventually provide new initiative in January 2019 to encourage more women to
more employment for Saudis. At the same time, it wants feel comfortable in the workplace—in addition to the gen-
to displace many of the low-skilled migrants, largely from der discrimination protection mentioned previously, the
South Asia and the rest of the Middle East, now resident Ministry focuses on “creating an appropriate working en-
in Saudi Arabia and fill their positions with Saudis. But the vironment for women.” This effort involves requiring guar-
distinctions are less clear in reality, as the Pakistani store antees that there will never be one woman working a shift
owner, the Egyptian engineer, and the Indian restaurateur alone with a team of men, the availability of private spaces
contribute their own expertise and entrepreneurial talents, for women to work if they request it, adequate security
not to mention disposable income, to the Saudi economy. systems, curfews for women in certain industries, and the
exclusion of women from some work tasks deemed phys-
Provide Greater Workforce Opportunities for Women ically dangerous.71 While a non-Saudi audience might see
these as restrictions, one of the barriers to women enter-
A core tenet of Vision 2030 is that the kingdom will never ing—and equally importantly, staying in—the workforce is
reach its full potential without the workforce engage- the discomfort many families have about their daughters or
ment of half its population: Saudi women. As a corollary, wives in a gender-mixed and potentially “unsafe” working
the more restrictions are lifted on women, the more they environment.72 The program is designed to overcome this
can participate freely in the consumer economy. One of obstacle and encourage women and their families to feel
the Vision 2030 benchmarks is to increase the number more comfortable about women moving into the workforce.
of women participating in the workforce to 25 percent by
2030, from 19 percent in 2016.68 The primary sectors for In August 2019, in the same week that the Saudi govern-
women’s employment are those that are most easily segre- ment announced women could travel without the permis-
gated. Education is the leading sector for women, with the sion of a male guardian, the Ministry of Labor announced
sector of health and social professions second.69 updated regulations to prevent gender discrimination in
hiring, unified the retirement age for men and women, and
Efforts to bring more women into the Saudi labor force are offered stronger job protections for women who are preg-
not new; many of them began under King Abdullah, partic- nant or on maternity leave.73
ularly starting in 2011. King Abdullah’s initiatives included
allowing women to work as cashiers and “feminizing”
IMPROVE THE BUSINESS ENVIRONMENT
shops selling women’s apparel, introducing unemployment
benefits for Saudis, criminalizing domestic violence, open- A central tenet of Vision 2030 is to improve the business
ing the first gender-mixed university, appointing women environment as a means of encouraging the development

66 “Saudi Arabia Implements Expat Levy,” PricewaterhouseCoopers, https://www.pwc.com/m1/en/services/tax/me-tax-legal-news/2017/saudi-arabia-

implements-expat-levy.html.
67 “Saudi Arabia: Selected Issues,” IMF Country Report, 2018, 34.
68 This number was revised downward in 2018, from 30 percent in 2016 and 28 percent in 2017. Young, “Saudi Arabia’s Crisis Is Economic and
Demographic.”
69 “Saudi Arabia: Selected Issues,” IMF Country Report, 2018, 32. Other areas are opening up to women, some for the first time, and some are seeing
expansion including criminal law, military service, banking and financial services, architecture, and computer engineering, just to name just a few.
70 Katherine Zoepf, “Shopgirls,” New Yorker, December 16, 2013, https://www.newyorker.com/magazine/2013/12/23/shopgirls.
71 Lojien Ben Gassem, “Initiative Launched to Ensure Better Working Conditions for Saudi Women,” Arab News, January 20, 2019, http://www.arabnews.com/
node/1438811/saudi-arabia.
72 Sarah Hassan, “Saudi Women Join the Workforce as Country Reforms,” CNN, February 7, 2018, https://www.cnn.com/2018/02/06/middleeast/saudi-
women-in-the-workforce/index.html.
73 Aseel Bashraheel and Rawan Radwan, “Saudi Women Hail Axing Travel Restrictions, Welcome Steps toward Equality,” Arab News, August 3, 2019, https://
www.arabnews.com/node/1534671/saudi-arabia; “Double Delight for Saudi Women as Labor Ministry Scraps Retirement Age Rule,” Saudi Gazette, August
2, 2019, http://saudigazette.com.sa/article/573828/SAUDI-ARABIA/Double-delight-for-Saudi-women-as-labor-ministry-scraps-retirement-age-rule.

26 ATLANTIC COUNCIL
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 Assessing Saudi Vision 2030: A 2020 Review

of the private sector. The public sector, particularly the oil renamed the General Authority for Competition, has gained
sector, continues to dominate the Saudi economy. Nearly greater independence and enforcement powers to take ac-
every one of the Vision Realization Programs seeks to play tion under the new law, with more flexibility in how it enacts
a role in growing the nonoil economy. By 2030, the Saudi punishments.80 Notably, however, the law does not apply
government hopes to see the private-sector contribution to state-owned enterprises. In July 2019, the government
to GDP grow to 65 percent from 40 percent when the pro- approved a new public procurement law, which establishes
gram was announced in 2016.74 a more centralized process that should increase efficiency
and fairness in the awarding of government contracts and
One of the barriers to private-sector development and in- boost the participation of SMEs, local companies, and com-
vestment is the country’s underdeveloped regulatory in- panies listed on the Saudi stock market.81 The government
frastructure. It takes too long to start a business, getting also has approved updated commercial mortgage, com-
access to credit is difficult, paying taxes is cumbersome, mercial franchise, and companies laws.82 To interpret and
moving goods across borders can be painstakingly com- apply the raft of new and upcoming regulations, the gov-
plicated, and resolving insolvency when a customer can no ernment has made numerous judicial reforms, including the
longer pay its bills daunting.75 introduction of specialized commercial courts and appeal
chambers.83 The Saudi Center for Commercial Arbitration
The government has sought to make improvements in the opened in 2016, and commercial courts were launched in
business and regulatory environment. Saudi Arabia’s bank- September 2017.84 Since then, judicial training courses have
ruptcy law went into effect in August 2018.76 The new legal taken place, labor courts have opened, and digitization ef-
environment allows for and regulates procedures “such as forts have been undertaken including digital notarization
settlements and liquidation, for individuals as well as local services.85 Importantly, Saudi courts are starting to enforce
and foreign companies.”77 So far three cases are reported judgments by foreign courts and arbitration centers against
to have been settled under the new law and up to a dozen Saudi companies.86
others are in progress, with more expected in 2020.78
NURTURE A CULTURE OF ENTREPRENEURSHIP
In March 2019, an updated competition law was approved,
which came into effect in September 2019. It prohibits AND SUPPORT SME GROWTH
unfair competition practices, creates a committee to set- The contribution of small- and medium-sized enterprises
tle disputes, and introduces new penalties for violators to to nonoil GDP was 20 percent when Vision 2030 was an-
be determined by the courts.79 The operating authority, nounced in 2016, and the goal is to raise that number to 35

74 The baseline of a 40 percent contribution by the private sector to GDP growth is a number provided by the Saudi government in its Vision 2030 planning
documents.
75 Doing Business 2020: Economy Profile, Saudi Arabia, World Bank Group, https://www.doingbusiness.org/content/dam/doingBusiness/country/s/saudi-
arabia/SAU.pdf.
76 Jeremy Lawrence, “Saudi Arabia’s Bankruptcy Law Comes into Effect,” Arabian Business, August 19, 2018, https://www.arabianbusiness.com/latest-
news/402961-saudi-arabias-bankruptcy-law-comes-into-effect.
77 Tom Arnold, Reem Shamseddine, and Katie Paul, “In Boost to Reform, Saudi Arabia’s Cabinet Approves Bankruptcy Law,” Reuters, February 18, 2018,
https://www.reuters.com/article/us-saudi-bankruptcy/in-boost-to-reform-saudi-arabias-cabinet-approves-bankruptcy-law-idUSKCN1G20PJ.
78 Stephen Kalin, “Saudi Arabia’s New Bankruptcy Law Faces Key Test in the Courts,” Reuters, October 24, 2019, https://www.reuters.com/article/us-saudi-
bankruptcy/saudi-arabias-new-bankruptcy-law-faces-key-test-in-the-courts-idUSKBN1X318P.
79 Alain Sfeir and Shahd Makhafah, “Saudi Arabia Issues a New Competition Law,” Clyde & Co, April 2, 2019, https://www.clydeco.com/insight/article/saudi-
arabia-issues-a-new-competition-law.
80 Sarah Algethami, “Saudi Competition Czar to Wield Greater Power under Revamped Law,” Bloomberg, March 11, 2019, https://www.bloomberg.com/news/
articles/2019-03-11/saudi-competition-czar-to-wield-greater-power-under-revamped-law.
81 “Saudi Arabia Approves New Tendering and Procurement Law,” Reuters, July 16, 2019, https://www.reuters.com/article/saudi-arabia-procurement-
lawmaking/saudi-arabia-approves-new-tendering-and-procurement-law-idUSL8N24H5ZN; Muhammad Anum Saleem, “Understanding Saudi’s New
Tenders and Procurement Law: What Are the Main Changes?,” Gulf Business, July 20, 2019, https://gulfbusiness.com/understanding-saudis-new-tenders-
procurement-law-main-changes/.
82 “Saudi Arabia: The Kingdom of Saudi Arabia’s New Commercial Mortgage Law Of 2018,” STA Law Firm, posted on Mondaq platform, March 19, 2019,
https://www.mondaq.com/saudiarabia/Finance-and-Banking/790224/The-Kingdom-Of-Saudi-Arabia39s-New-Commercial-Mortgage-Law-Of-2018; “Shoura
to Vote on Commercial Franchise Law,” Saudi Gazette, March 21, 2019, http://saudigazette.com.sa/article/561730; “Saudi Arabia’s New Franchise Law,”
Baker McKenzie, October, 2019, https://www.bakermckenzie.com/en/insight/publications/2019/11/saudi-arabias-new-franchise-law; Tim Burburry and Timm
Smith, “Ten Reasons Why International Investors Should Be Excited about Saudi Arabia’s New PSP (PPP) Law,” King & Spalding, March 11, 2019, https://
www.kslaw.com/blog-posts/ten-reasons-why-international-investors-should-be-excited-about-saudi-arabias-new-psp-ppp-law.
83 “Saudi Judiciary Moves with Huge Milestones This Year,” Saudi Gazette, September 1, 2019, http://www.saudigazette.com.sa/article/576064/SAUDI-
ARABIA/Saudi-judiciary-moves-withhuge-milestones-this-year.
84 Mohammad al-Sulami, “Saudi Legal Reforms Lead to Business Surge, Says Justice Ministry,” Arab News, August 7, 2018, https://www.arabnews.com/
node/1352676/saudi-arabia.
85 “Saudi Judiciary Moves with Huge Milestones This Year.”
86 Andrew Torchia, “Saudi Arabia’s Legal Revamp Offers Hope for Cautious Investors,” Reuters, September 27, 2018, https://www.reuters.com/article/us-
saudi-economy-court-analysis/saudi-arabias-legal-revamp-offers-hope-for-cautious-investors-idUSKCN1M7157.

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Assessing Saudi Vision 2030: A 2020 Review

Contribution of the private, oil, and struggling companies, and offers a number of early-stage
financing programs. The Kafalah program, for example,
government sectors to GDP by share is an SME loan-guarantee program to encourage finan-
cial institutions to invest in small businesses. While the
program is not new, Vision 2030 injected new funds and
new energy into the organization.88 The government also
launched the Saudi Venture Capital Company, with approx-
Nonoil
imately $1 billion in capital, to invest in early- and growth-
government
- stage companies and in other Saudi venture capital (VC)
sector
firms.89 The Public Investment Fund similarly announced a
17% $1 billion “Fund of Funds” to invest in VC firms and private
equity funds supporting SMEs.90
Nonoil
Non- Beyond funding and financing, the SME authority (Mon-
private sector shaat) has initiatives to streamline the administrative and
41% regulatory hurdles to starting and managing an SME. The
authority launched a support center, Meras, to digitize and
provide resources to make it possible to set up a business
Oil sector in as little as one day.91 The MiSK Foundation has part-
42% nered with 500 Startups, a San Francisco-based venture
capital fund, to launch an accelerator program for Mid-
dle Eastern high-tech entrepreneurs.92 The Saudi Arabian
General Investment Authority has improved the wait time
required to acquire a license as a foreign investor or an
entrepreneur, and the Saudi Arabian Monetary Authority
and Capital Market Authority launched “sandbox” regula-
Source: “Quarterly GDP at Constant Prices for 2010-2019”, General tory environments to benefit innovation and investment
Authority for Statistics (Saudi Arabia), accessed May 6, 2020, https:// in Saudi Arabia.93
www.stats.gov.sa/en/823.
PRIVATIZE SELECT INDUSTRIES AND ATTRACT
FOREIGN DIRECT INVESTMENT
percent by 2030. SMEs employ some 4.5 million people in The Saudi government regards privatization, either through
Saudi Arabia, but their contribution to nonoil GDP is well public-private partnerships or the sale and lease of state-
below potential when Saudi Arabia is compared with its owned assets, as another mechanism to grow the private
global peers.87 sector, attract foreign investment, and boost nonoil rev-
enues. In April 2018, the Privatization Vision Realization
In an effort to increase SME financing, the Saudi govern- Program was announced, which the government antici-
ment has launched a $53 billion private-sector stimulus pates could generate $10 billion in nonoil revenues and
program that reimburses business fees to some SMEs 12,000 jobs by 2020.94 Some privatization appears aimed
during their initial years of operation, provides financing to at increasing the assets of the Public Investment Fund in

87 “SMEs and Vision 2030,” Jadwa Investment, March 2019, https://www.jeg.org.sa/sites/default/files/library/files/SMEs%20and%20Vision%202030.pdf; the
employment of 4.5 million in the nation is out of a total 12.8 million employed persons.
88 Halah al-Shathri, “Kafalah Program for SMEs Signs Agreement with Saudi Finance Company,” Arab News, March 29, 2019, https://www.arabnews.com/
node/1463441/saudi-arabia.
89 “Saudi Venture Capital Company Commits to Invest over $133 Million in Six Local VC Funds,” MENA Bytes, April 25, 2019, https://www.menabytes.com/
svc-133-million/.
90 Katie Paul, “Saudi Sovereign Fund Creates $1.07 Billion “Fund of Funds” to Back SMEs,” Reuters, October 9, 2017, https://www.reuters.com/article/saudi-
fund-funds/saudi-sovereign-fund-creates-1-07-bln-fund-of-funds-to-back-smes-idUSL8N1MK3XH.
91 Osama Ashri, “On the Fast Track: Saudi Arabia’s Entrepreneurship Ecosystem,” Entrepreneur, July 17, 2019, https://www.entrepreneur.com/article/336766.
92 Caitlin Glazebrook, “500 Startups and MiSK Innovation to Launch Second Batch of the MiSK 500 Accelerator Program,” 500 Startups blog, July 9, 2019,
https://500.co/500-startups-misk-innovation-to-launch-second-batch-of-the-misk-500-accelerator-program/.
93 A “sandbox” regulatory environment is set up to allow the introduction of new regulations or regulatory systems with a few companies or entities, to test
the feasibility in a larger market. Usually, the objective is to allow for greater innovation and creativity. Ivo Jenik and Kate Lauer, “Regulatory Sandboxes
and Financial Inclusion,” Consultative Group to Assist the Poor, October 2017, https://www.cgap.org/sites/default/files/Working-Paper-Regulatory-
Sandboxes-Oct-2017.pdf; https://www.entrepreneur.com/article/338516.
94 “Saudi Privatization Program Targets $11 Billion Non-oil Revenues by 2020,” Reuters, April 24, 2018, https://www.reuters.com/article/us-saudi-privatisation/
saudi-privatization-program-targets-11-billion-non-oil-revenues-by-2020-idUSKBN1HV2PS.

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 Assessing Saudi Vision 2030: A 2020 Review

particular, including the IPO for Aramco. Saudi airports for women, is palpable—and can be seen when visiting the
were also targeted for privatization in 2017, with the un- kingdom. Some of these announcements have been im-
derstanding that ownership of the airports would be trans- plemented through the Quality of Life Program, and most
ferred to the Saudi Civil Aviation Holding Company, which have come from the crown prince himself.
would then be transferred to the PIF. So far this transfer of
ownership has not taken place.95 Many of these changes have a distinctly economic effect,
if not purpose. Lifting social and workforce restrictions on
Companies slated for corporatization and partial privatiza- women has the potential to enhance the labor force and
tion in 2020 include the Saudi Professional Football League, create a more welcoming atmosphere for tourists, con-
flour mills at General Silos and Flour Mills Organization, the sidered a new sector for development; and encouraging
production sector at the Saudi Saline Water Conversion concerts, cinema, sports, and other entertainment creates
Corp., the Ras al-Khair desalination and power plant, a the possibility of new sectors for a Saudi audience as well.
number of Saudi ports, and some services in the transpor-
tation sector. The government also has identified the health Relax Social Restrictions on Women and Gender Mixing
care, education, and postal sectors for possible privatization
projects.96 One of the first, and most significant moves, made by the
crown prince was to curtail the enforcement powers of the
The National Industrial Development and Logistics Pro- religious police, an 80-year-old institution that has been re-
gram, which had been expected to ramp up in 2020 after sponsible for policing gender segregation in public spaces,
significant investment in 2019, will facilitate the develop- dress codes for women and men, and more broadly “the
ment of key sectors, including the automotive, pharmaceu- promotion of virtue and the prevention of vice.” As of April
tical, medical-supply, and military manufacturing industries 2016, the religious police were stripped of their authority
as well as mining, energy, and logistics sectors. The focus to “pursue, arrest, or detain” members of the public, treat
will be on introducing high-end technology and improving individuals in a rough or heavy-handed manner, or work
the regulatory environment. outside of regular office hours.98 Skepticism surrounded
the move, but it has remained in place and allowed for
To increase foreign portfolio investment in the country, the real changes. Now it is not uncommon to encounter gen-
Saudi stock exchange (Tadawul) is seeking to build more der mixing and music in public spaces. A flood of public
advanced capital markets. The exchange is training Saudi debate and controversy has accompanied such changes,
companies to orient themselves toward investor relations, but there is no longer the fear of often-harsh enforcement
which often requires them to become more transparent, by the religious police.
efficient, and globally minded. As of March 2019, the ex-
change had nearly two hundred listings, including heavy- Perhaps the most widely publicized achievement of Vision
weights like Saudi Basic Industries Corp. (SABIC) and Saudi 2030 so far came in June 2018, when the first Saudi
Telecom, and even its first fitness company.97 It has been women received their driver’s licenses and took to the
negotiating with the world’s major emerging markets funds road. The ban on women driving was officially lifted on
over its inclusion in their indices. In June 2019, the govern- June 24, after the change was announced in September
ment removed the cap on foreign ownership of publicly 2017. Following the announcement, driving schools for
traded companies. women opened, ride-hailing applications began recruiting
women to drive for their services, and driving simulators
popped up in public places like shopping malls.99
OPEN THE SOCIAL SPHERE
Since the announcement of Vision 2030, Saudi Arabia has In August 2019, the crown prince announced that a collec-
seen a succession of big headlines and quick wins in the tion of restrictions on women—most notably the ban on
social sphere. The impact of these changes, particularly women obtaining a passport or traveling without her male

95 “All Saudi Airports to Be Privatized This Year,” Arab News, August 9, 2017, https://www.arabnews.com/node/1141841/saudi-arabia.
96 In February 2020, Saudi Arabia completed the first privatization of a government-owned health care entity, the Saudia Medical Services Company. Nada
al-Rifai, “Saudi Arabia Completes Privatization of its First Government-owned Healthcare Entity,” Zawya, February 4, 2020, https://www.zawya.com/mena/
en/markets/story/Saudi_Arabia_completes_privatization_of_its_first_govtowned_healthcare_entity-ZAWYA20200204124215/.
97 Author interviews, March 2019.
98 Sewell Chan, “Saudi Arabia Moves to Curb Its Feared Religious Police,” New York Times, April 15, 2016, https://www.nytimes.com/2016/04/16/world/
middleeast/saudi-arabia-moves-to-curb-its-feared-religious-police.html.
99 Holly Ellyatt, “ ‘No More a Passenger’: Driving Schools for Women Take Off in Saudi Arabia,” CNBC, March 8, 2018, https://www.cnbc.com/2018/03/08/
saudi-arabia-driving-schools-for-women.html; https://www.cnbc.com/2017/11/17/women-in-saudi-arabia-preparing-to-drive-and-to-make-money-from-it.html;
Sarah Aziza, “Saudi Arabia’s Ban on Woman Drivers Comes to an End,” Atlantic, June 23, 2018, https://www.theatlantic.com/international/archive/2018/06/
saudi-arabia-women-driving-salman-crackdown-activists/563579/.

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Assessing Saudi Vision 2030: A 2020 Review

HOUSING PROGRAM

The Housing Program is a key pillar of Vision 2030 Investment Fund, to provide greater liquidity to lend-
and meant to safeguard the well-being and prosper- ers to support home financing.2 The company has in-
ity of Saudi citizens. It is not a program highly touted troduced new housing products, such as long-term,
by the crown prince to international audiences, but it fixed-rate mortgages, previously unavailable to Saudi
is critical to his domestic constituency. In Gulf states, customers. In March 2019, the company completed a
housing subsidies for nationals are a long-time bene- $200 million Islamic bond issuance. At the same time,
fit, and in Saudi Arabia, affordable housing remains a the company purchased mortgages valued at $200
concern, especially among young Saudis.1 million from local banks and mortgage-financing com-
panies, as part of its mandate to provide liquidity in
Its first two KPIs are illustrative of the chal- the local market.3 The housing minister in
lenges that the program faces: to drive March 2019 reported that, when com-
down the average residential unit price plete, the new mortgage system will
from nine times average annual in- comprise eighteen different entities
come per capita to five, and to raise offering housing finance for Saudis.
homeownership rates from 50 per- The Real Estate Development Fund
cent to 70 percent. As more and (REDF), designed to provide hous-
more young Saudis reach an age ing loans to lower- and middle-in-
where they would like to start fami- come Saudis, is an important piece
lies and purchase homes, finding af- of the financing puzzle. The housing
fordable housing is a challenge closely minister reported that the REDF pro-
linked to the difficult task of finding em- vided subsidized financing for 81 per-
ployment. Housing could become more cent of total mortgage contracts in 2018,
out of reach as the kingdom endeavors to shift compared to just 2 percent in 2017.4
more Saudis from public- to private-sector employ-
ment, where wages are typically lower than in gov- In April 2019, King Salman announced $8 billion in
ernment jobs. new development projects, which will include hous-
ing, along with health care, education, public trans-
The program aims to address these challenges on portation, and state services.5 The 2019 budget made
both the supply side and the demand side, with plans room for greater capital expenditure (on projects like
to increase access to financing by implementing mort- housing development) to spur nonoil sector growth.6
gage guarantees and offering new housing finance The kingdom also is turning to international partners.
products, while simultaneously creating more efficient During the crown prince’s visit to China in February
systems for housing builders and developing Ministry 2019, Saudi Arabia’s National Housing Company
of Housing lands. (NHC) and China’s State Construction Engineering
Corporation (CSCEC) signed a joint agreement valued
The program has created the Saudi Real Estate at $666.7 million to develop 5,590 residential units on
Refinance Company, which is owned by the Public Ministry of Housing land north of Riyadh.7

1 Karen E. Young, “A Home of One’s Own: Subsidized Housing as a Key Lever of Gulf Domestic Policy,” blog post, the Arab Gulf States Institute in
Washington, June 15, 2018, https://agsiw.org/a-home-of-ones-own-subsidized-housing-as-a-key-lever-of-gulf-domestic-policy/.
2 Colon Foreman, “Providing Liquidity for the Saudi Housing Market,” MEED, April 16, 2019, https://www.meed.com/providing-liquidity-saudi-
housing-market/.
3 “Saudi Real Estate Firm to Buy Mortgages Worth $200 Million,” Arab News, April 27, 2019, https://www.arabnews.com/node/1488891/business-
economy.
4 “REDF: 258% Growth in Mortgage Financing for January,” PR Newswire, March 7, 2019, https://www.prnewswire.com/ae/news-releases/redf-
258-growth-in-mortgage-financing-for-january-300808549.html.
5 “Saudi King Launches $8 Billion in Development Projects in Capital,” Reuters, February 13, 2019, https://www.reuters.com/article/us-saudi-
economy/saudi-king-launches-8-billion-in-development-projects-in-capital-idUSKCN1Q22G7.
6 Vivian Nereim, “Saudi Arabia’s Quarterly Budget Deficit Widens to $8.9 billion,” Bloomberg, July 31, 2019, https://www.bloomberg.com/news/
articles/2019-07-30/saudi-arabia-s-quarterly-budget-deficit-widens-to-8-9-billion.
7 Jack Ball, “Saudi, China’s CSCEC Ink $660 Million Riyadh Housing Deal,” Arabian Business, February 24, 2019, https://www.arabianbusiness.
com/construction/413907-saudi-chinas-cscec-ink-6667m-riyadh-housing-deal.

30 ATLANTIC COUNCIL
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 Assessing Saudi Vision 2030: A 2020 Review

Female racing driver Aseel Al Hamad celebrated the end of the ban on women drivers. Aseel, the first female board member of the Saudi
Arabian Motor Federation, had never driven on a track in her home country before. Source: Jaguar MENA (https://www.flickr.com/photos/
jaguarcarsmena/42259294604/in/album-72157698317336905/)

guardian’s permission—would be lifted.100 Women can now its work to build an entertainment sector essentially from
report the birth of a newborn child, the death of a family scratch, with plans for cinemas, concerts, theme parks,
member, and marriage or divorce; formerly only men could water parks, street festivals, an opera house, and an en-
formally report these family events.101 Restrictions remain tire “entertainment city.” The GEA has been enormously
on a woman’s ability to file a lawsuit, marry, live on her own, productive—as of March 2019 it had overseen over 6,000
open a bank account, leave prison or a government-run total “event days” (up from 67 its first year) for 27 million
shelter, or to broadly act in “filial disobedience” against attendees. Saudi Arabia has hosted concerts, a Comic-Con
her guardian.102 event, and the country’s first monster truck rally. In 2018,
the kingdom once again had cinema screenings, featuring
Promote Entertainment and Sports “The Emoji Movie” and “Black Panther,” after decades with-
out movie theaters.103 The GEA announced last year that it
Vision 2030 commits enormous resources to creating en- expects to invest $64 billion in entertainment infrastructure
tertainment offerings as part of public life in Saudi Arabia. over the next ten years.104 The GEA envisions investment
In 2016 the General Entertainment Authority (GEA) began creating more than two hundred thousand jobs and adding

100 Stephen Kalin, “Cleared for Takeoff: Saudi Women Start Exercising Their Newest Right,” Reuters, August 22, 2019, https://www.reuters.com/article/us-
saudi-women/cleared-for-takeoff-saudi-women-start-exercising-their-newest-right-idUSKCN1VC1XI.
101 Anas al-Yusuf, “Saudi Women Can Obtain Passports without Male Guardians’ Permission,” Saudi Gazette, August 1, 2019, http://saudigazette.com.sa/
article/573746/SAUDI-ARABIA/Saudi-women-can-obtain-passports-without-male-guardians-permission.
102 Marwa Rashad, “Saudi Arabia Women’s Rights Reforms May Still Be Thwarted by Custom,” Reuters, August 5, 2019, https://www.reuters.com/article/us-
saudi-women-guardianship/saudi-arabia-womens-rights-reforms-may-still-be-thwarted-by-custom-idUSKCN1UV1Q4; Umberto Bacchi, “Factbox: Travel Yes,
Marry No—What Saudi Women Still Can’t Do,” Reuters, August 2, 2019, https://www.reuters.com/article/us-saudi-women-travel-factbox/factbox-travel-yes-
marry-no-what-saudi-women-still-cant-do-idUSKCN1US22X.
103 Katie Paul, “Quietly at First, Music Comes Back to Saudi Arabia,” Reuters, January 31, 2017, https://www.reuters.com/article/saudi-entertainment-music-int/
quietly-at-first-music-comes-back-to-saudi-arabia-idUSKBN15F23B.
104 “Saudi Arabia Eyes Billions of Dollars in Entertainment Investments,” Reuters, January 22, 2019, https://www.reuters.com/article/us-saudi-entertainment/
saudi-arabia-eyes-billions-of-dollars-in-entertainment-investments-idUSKCN1PG2NY.

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Assessing Saudi Vision 2030: A 2020 Review

Moroccan singer Aziza Jalal performs at the “Winter at Tantora Festival” at the Maraya Concert Hall in Saudi Arabia in December 2019. Source:
Wikimedia/Nabil2019 (https://commons.wikimedia.org/wiki/File:Aziza_Jalal_2019_%D8%B9%D8%B2%D9%8A%D8%B2%D8%A9_%D8%AC%D9
%84%D8%A7%D9%84.jpg)

$133 billion (SAR 500 billion) to the GDP over the next ten racing, boxing, and golf events, and announced $650 mil-
years.105 lion for sports clubs in Saudi Arabia to develop infrastruc-
ture, diversify participation, and increase attendance and
Another celebrated moment was the first football match at- engagement with the events.107 Other GSA achievements
tended by Saudi women, held in January 2018 in the King include the licensing of women’s gyms, the announcement
Abdullah Sports City Stadium in Jeddah.106 This event was of physical education for girls in public schools, and the
part of the General Sports Authority’s (GSA) wider effort at introduction of women to Saudi Arabia’s Special Olympics
women’s engagement in sports. The GSA’s mission, as part team.108
of the Quality of Life Program, is to build a sporting econ-
omy from the ground up—to include professional sports
REPURPOSE THE PUBLIC INVESTMENT FUND
leagues and sports for entertainment, as well as greater
AND DEVELOP MEGAPROJECTS
physical activity for all Saudis, regardless of age or gender.
To finance many of Vision 2030’s most ambitious proj-
Since the announcement of Vision 2030, the kingdom ects, the government is relying on the revitalized Public
has hosted major international football, tennis, handball, Investment Fund (PIF). That is the case with the biggest

105 Author interviews, February 2019; the contribution to the annual GDP is SAR 18 billion, according to a government announcement cited in “Saudi Arabia
Eyes Billions of Dollars in Entertainment Investments.”
106 Kareem Shaheen, “Saudi Football Stadium Welcomes Women for First Time,” Guardian, January 12, 2018, https://www.theguardian.com/world/2018/jan/12/
saudi-football-stadiums-prepare-welcome-women-first-time.
107 John McAuley, “Saudi Arabia Provides $650 Million Boost to Sports Sector as Part of Vision 2030,” National, July 22, 2019, https://www.thenational.ae/
sport/other-sport/saudi-arabia-provides-650m-boost-to-sports-sector-as-part-of-vision-2030-1.889250.
108 Madeline Holcombe and Yousuf Basil, “Saudi Arabia to Issue Licenses for Female-only Gyms,” CNN, February 19, 2017, https://www.cnn.com/2017/02/13/
middleeast/saudia-arabia-women-gyms-trnd/index.html; “Saudi Arabia to Introduce Physical Education for Schoolgirls,” Reuters, July 11, 2017, https://www.
reuters.com/article/us-saudi-education-women/saudi-arabia-to-introduce-physical-education-for-schoolgirls-idUSKBN19W1DM; Jennifer Bell, “Meet the
Saudis Making History at the Special Olympics,” Arab News, March 14, 2019, https://www.arabnews.com/node/1466371/saudi-arabia.

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 Assessing Saudi Vision 2030: A 2020 Review

Displays at the Future Investment Initiative in October 2017, the first flagship annual conference hosted by the Public Investment Fund,
advertise plans for NEOM and the Qiddiya Entertainment City. Hosted by King Salman and Crown Prince Mohammed bin Salman, notable
attendees included Softbank CEO Masayoshi Son, Virgin Group founder Richard Branson, US Secretary of the Treasury Steven Mnuchin,
then-IMF chief Christine Lagarde, and BlackRock CEO Larry Fink. Source: Flickr/BreakingTravelNews/Mark Hakansson (https://www.flickr.com/
photos/breakingtravelnews/albums/72157688343050424).

megaprojects under the reform program—including NEOM, wealth funds (SWF) in the world, but to play a very different
the Red Sea luxury tourism development, and the Qiddiya role than traditional SWFs, which primarily help diversify
Entertainment City outside of Riyadh. The PIF has become a country’s oil wealth to stabilize its economy in the face
a key financial instrument for Vision 2030 and the crown of fluctuating energy prices. Increasingly, SWFs are assist-
prince, who serves as its chairman. The PIF supports many ing oil-dependent economies in diversifying not just their
of the kingdom’s most prominent, future-oriented projects finances but the structure of their economies. However,
and, through its investments abroad, now conducts public the PIF goes above and beyond other funds in the region
diplomacy on behalf of the country. in terms of the aggressiveness of its domestic and inter-
national investment strategies.109 Notably, the PIF does
When it began in 1971, the PIF was a development fund not at this time contribute to government revenues; its
that provided financing and investments primarily to public spending, investments, and returns are not accounted for
enterprises. The fund’s new mandate (since the launch of in the government budget, and its financial activities are
Vision 2030) is to become one of the largest sovereign not reported in a transparent manner.110

109 Stephen Roll, A Sovereign Wealth Fund for the Prince: Economic Reforms and Power Consolidation in Saudi Arabia, Stiftung Wissenschaft und Politik, July
2019, accessed March 1, 2020, https://www.swp-berlin.org/en/publication/a-sovereign-wealth-fund-for-the-prince/; Bina Hussein, Sovereign Investors: A
Means for Economic Diversification? Atlantic Council, January 8, 2019, accessed March 1, 2020, https://www.atlanticcouncil.org/in-depth-research-reports/
report/sovereign-investors-a-means-for-economic-diversification/.
110 Roll, A Sovereign Wealth Fund for the Prince, 16.

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Assessing Saudi Vision 2030: A 2020 Review

In 2017, the PIF launched:

Initiatives to open and ■ Saudi Arabian Military Industries (SAMI), a national military industries company;1
develop new sectors ■ Saudi Entertainment Ventures Co. (SEVEN), with $2.67 billion initial funding;2
■ Saudi Real Estate Refinance Co., to provide liquidity for lenders to support
home financing;3
■ Saudi Investment Recycling Co.;4
■ Tarshid, the National Energy Services Company, to improve energy savings
across public buildings with $500 million in initial funding;5
■ $1.07 billion “Fund of Funds” to invest in VC and private equity firms that pro-
vide capital to SMEs;6
■ Solar Energy Plan 2030, a joint project with SoftBank Vision Fund, to develop
the kingdom’s solar energy sector, led by a 3-gigawatt (GW) solar generation
project in 2018;7

Initiatives to develop ■ New Jeddah Downtown project, totaling an anticipated $5 billion over ten
real estate and years;8
infrastructure projects ■ Rou’a al-Haram and Rou’a Almadinah projects to increase capacity for religious
and companies tourism;9

Gigaproject initiatives ■ Qiddiya Entertainment City project, later incorporated as the Qiddiya Investment
Company (wholly owned by the PIF);10
■ Red Sea Project, to develop the Red Sea coastline into a luxury tourism destina-
tion (managed by a PIF subsidiary, the Red Sea Development Company);11 and
■ NEOM, a planned, futuristic, “smart city” and tourist destination in the northwest
corner of Saudi Arabia, expected to attract $500 billion in investment, in part
from the PIF, over the coming years.12

1 “Key Element of Vision 2030 Realized with Launch​of New Saudi Arabian National Defense Company,” Public Investment Fund, May 17, 2017, https://
www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=17; “UPDATE 2-Saudi Arabia Launches Military Industries Company,” Reuters, May
17, 2017, https://www.reuters.com/article/saudi-security-arms/update-2-saudi-arabia-launches-military-industries-company-idUSL8N1IJ5ZG.
2 “Public Investment Fund to Launch Entertainment Investment Company,” Public Investment Fund, September 19, 2017, https://www.pif.gov.sa/
en/MediaCenter/Pages/NewsDetails.aspx?NewsID=22; “Saudi PIF Entertainment Company Plans to Build Leisure Complex in Riyadh,” Reuters,
January 2, 2019, https://www.reuters.com/article/us-saudi-entertainment/saudi-pif-entertainment-company-plans-to-build-leisure-complex-in-riyadh-
idUSKCN1OW11X.
3 “The Public Investment Fund Launches the Saudi Real Estate Refinance Company (SRC),” Public Investment Fund, October 9, 2017, https://www.pif.
gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=30.
4 “The Public Investment Fund to Establish Recycling Sector Company,” Public Investment Fund, October 15, 2017, https://www.pif.gov.sa/en/
MediaCenter/Pages/NewsDetails.aspx?NewsID=28.
5 “The Public Investment Fund Establishes Super Energy Service Company—‘Super Esco’,” Public Investment Fund, October 8, 2019, https://www.pif.
gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=29.
6 “Public Investment Fund Launches ‘Fund of Funds’,” Public Investment Fund, October 8, 2017, https://www.pif.gov.sa/en/MediaCenter/Pages/
NewsDetails.aspx?NewsID=27.
7 “Public Investment Fund to Partner with Softbank Vision Fund to Create the ‘Solar Energy Plan 2030’,” Public Investment Fund, October 24, 2017,
https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=33.
8 “Public Investment Fund to Lead Development of New Jeddah Downtown,” Public Investment Fund, September 26, 2017, https://www.pif.gov.sa/en/
Pages/News11.aspx.
9 “Public Investment Fund Prepares to Launch ‘Rou’a al-Haram’ Company,” Public Investment Fund, October 1, 2017, https://www.pif.gov.sa/en/
MediaCenter/Pages/NewsDetails.aspx?NewsID=25; “Public Investment Fund to Launch ‘Rou’a Almadinah’ Company,” Public Investment Fund,
October 1, 2017, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=26.
10 “World-class Entertainment Park Coming Up in al-Qiddiya,” Saudi Gazette, October 26, 2017, http://saudigazette.com.sa/article/520308;
“Establishment of Qiddiya Investment Company,” Qiddiya, May 21, 2018, https://qiddiya.com/en/media/press-office/establishment-of-qiddiya-
investment-company/.
11 “The Red Sea Development Company,” Red Sea Development Company, https://www.theredsea.sa/en/project/vision-and-pif.
12 “HRH the Crown Prince​Mohammed bin Salman Announces: NEOM—The Destination for the Future,” Public Investment Fund, October 23, 2017,
https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=31.

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 Assessing Saudi Vision 2030: A 2020 Review

The main objectives of the PIF Vision Realization Program and companies, and especially to launch “gigaprojects.”115
are fourfold: 1) to grow the assets of the fund to be one of The crown prince targeted 50 percent of investments for
the largest in the world, targeting $600 billion by 2020; 2) domestic projects, as part of the Vision 2030’s overall goal
to use the PIF to “unlock new sectors”; 3) to build global to expand and increase the role of the private sector.116
strategic partnerships; and 4) to promote high-tech innova-
tion through investment in research and development and The PIF has entered a number of high-profile deals since
advanced technology sectors.111 Vision 2030’s launch. In 2016, the PIF announced it would
contribute $1.1 billion to create the al-Sanaeeq Fund to
Assets develop Saudi VC companies and support investments
in SMEs. It also invested $500 million in the e-commerce
The PIF’s funding comes from several sources. Oil reve- platform Noon.com.117 But 2017 was the landmark year for
nues beyond those required to balance the budget go to inaugurating new Saudi projects. The pace of announce-
the fund (rather than the Saudi Arabian Monetary Authority, ments and the scale of the projects was key to the goal
SAMA), as does the nearly $30 billion raised by Saudi of establishing Vision 2030 as a transformational reform
Aramco’s first IPO on the Saudi stock exchange (and any effort that could capture the attention of the international
future listings). The cash savings from economic reforms media and international investors.
including the energy price reform are reportedly directed
to the PIF, and the fund receives some inflows from SAMA The pace slowed in 2018 and 2019, but new project an-
and state oil revenues.112 In 2018, the PIF entered commer- nouncements and implementation updates for projects
cial debt markets with a loan for $11 billion from banks.113 launched in 2016-2017 continued. The Ministry of Energy,
The PIF’s sale of its shares in SABIC to Saudi Aramco will for example, has since announced a more modest energy
inject $70 billion into the fund, and the fund took out a sec- plan that aims for 40 GW of solar capacity, rather than 200
ond bank loan of $10 billion to be paid back as the SABIC GW, by 2030.118 New projects have focused on develop-
deal is completed.114 ing specific tourism sites, including Amaala, an ultraluxury
“wellness” resort in a nature reserve on the Red Sea; the
‘Unlocking New Sectors’ Wadi al-Disah Development Project, a sustainable tourism
project in the same nature reserve as Amaala; and the first
The PIF has aggressively pursued its mandate to “unlock commercial helicopter company in Saudi Arabia, with initial
new sectors,” develop real estate, infrastructure projects capital of $151 million.119

111 “The Public Investment Fund (2018–2020),” Saudi Vision 2030, 2017, https://vision2030.gov.sa/sites/default/files/attachments/PIF%20Program_EN_0.pdf.
112 Anjil Raval, “Oil Cash Set to Boost Saudi Arabia’s Sovereign Wealth Fund,” Financial Times, March 9, 2018, https://www.ft.com/content/aff55882-2372-
11e8-add1-0e8958b189ea; Andrew Torchia, “The Mysterious (and Continuing) Fall in Saudi Foreign Reserves,” Reuters, June 27, 2017, https://www.reuters.
com/article/uk-saudi-economy-reserves-analysis/the-mysterious-fall-in-saudi-foreign-reserves-idUKKBN19I17R; Philip Cornell, “The Saudi Public Investment
Fund: The Emerging Financial Vehicle behind Vision 2030,” Atlantic Council, March 30, 2018, https://www.atlanticcouncil.org/commentary/the-saudi-
public-investment-fund-the-emerging-financial-vehicle-behind-vision-2030/.
113 This is an unusual move for a SWF. See Rory Jones, “In Rare Step, Saudi’s Sovereign-Wealth Fund Raises $11 Billion Loan,” Wall Street Journal, September
17, 2018, https://www.wsj.com/articles/in-rare-step-saudis-sovereign-wealth-fund-raises-11-billion-loan-1537170690.
114 Previously it was announced that Aramco’s ownership would be transferred to the PIF as well, which would send dividends to the fund, but the crown
prince has since said that ownership of Aramco will remain with the Saudi government; Davide Barbuscia and Saeed Azhar, “UPDATE 1-Saudi Arabia’s
Public Investment Fund Signs $10 Billion Loan,” Reuters, October 30, 2019, https://www.reuters.com/article/saudi-investment-pif/update-1-saudi-arabias-
public-investment-fund-signs-10-bln-loan-idUSL8N27F5LJ; Stephanie Flanders et al., “Saudi Crown Prince Discusses Trump, Aramco, Arrests: Transcript,”
Bloomberg, October 5, 2018, https://www.bloomberg.com/news/articles/2018-10-05/saudi-crown-prince-discusses-trump-aramco-arrests-transcript.
115 “The Public Investment Fund (2018–2020),” Saudi Vision 2030.
116 As of October 2018, MBS said that domestic investments were slightly more than 50 percent of overall investments, compared to international ventures,
and that the PIF hoped to invest more internationally in 2019 to rebalance. It is not clear that plans for more overseas investments have materialized.
Saeed Azhar, “Saudi Arabia’s Hometown Ambitions Could Clip Wealth Fund’s Wings,” Reuters, June 28, 2019, https://www.reuters.com/article/us-saudi-
pif-investment-insight/saudi-arabias-hometown-ambitions-could-clip-wealth-funds-wings-idUSKCN1TT0OE; Saeed Azhar, Nafisa Eltahir, and Tuqa Khalid,
“Factbox: Saudi Sovereign Fund’s Strategy in Focus,” Reuters, June 28, 2019, https://www.reuters.com/article/us-saudi-pif-investment-factbox/factbox-
saudi-sovereign-funds-strategy-in-focus-idUSKCN1TT0ON.
117 “The Saudi Arabian Public Investment Fund Announces 50% Equity Stake in New E-commerce Platform,” Public Investment Fund, November 13, 2016,
https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=13; “Saudi State Fund to Invest in E-commerce Venture,” Economist Intelligence
Unit, November 15, 2016, https://www.eiu.com/industry/article/814818265/saudi-state-fund-to-invest-in-e-commerce-venture/2016-11-15.
118 Phred Dvorak and Rory Jones, “SoftBank’s Bid to Build a Solar-Power Empire Founders”, Wall Street Journal, August 10, 2019, https://www.wsj.com/
articles/softbanks-bid-to-build-a-solar-power-empire-founders-11565409688.
119 “Saudi’s Amaala Resort Will Have ‘Its Own Regulatory Structure’, Target UHNWIs: PIF” (referring to ultra-high net-worth individuals), Arabian Business,
July 1, 2019, https://www.arabianbusiness.com/travel-hospitality/423142-saudis-amaala-resort-will-have-its-own-regulatory-structure-target-uhnwis-says-
pif; Danelle Wyper, “Red Sea Riviera Plans Gather Momentum,” MEED, April 7, 2017, https://www.meed.com/amaala-red-sea-riviera/; “PIF Announces
‘Wadi Al Disah Development Project’ In Mohammed Bin Salman Natural Reserve,” Public Investment Fund, November 19, 2018, https://www.pif.gov.sa/en/
MediaCenter/Pages/NewsDetails.aspx?NewsID=49; “PIF Announces ‘Wadi Al Disah Development Project’ in Mohammed bin Salman Natural Reserve,”
Saudi Gazette, November 20, 2018, http://saudigazette.com.sa/article/548538/Gallery/Video/PIF-announces-ldquoWadi-Al-Disah-Development-Project-
rdquo-in-Mohammed-bin-Salman-Natural-Reserve; “Public Investment Fund Announces Launch of the Helicopter Company,” Public Investment Fund,
March 10, 2019, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=52.

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Assessing Saudi Vision 2030: A 2020 Review

DIRECT PIF INVESTMENTS IN SAUDI COMPANIES, BY ECONOMIC SECTOR*

*Includes regional companies

Petrochemicals Financial Food and

ICT 18% Utilities 14% Mining 7%
39% services 15% agriculture 3%
Petrochemicals ICT Financial services Utilities Min ing
Transportation
Cement 1% Steel <1% Health care <1% Other <1%
and logistics 2%
Food and agriculture Tra nsportation and logistics Cement Steel
Source: “The Public Investment Fund Program (2018–2020),” Public Investment Fund Program, 35, https://vision2030.gov.sa/sites/default/files/
attachments/PIF%20Program_EN_0.pdf.
Healthcare
Photo: King Abdullah Other
Financial District, in the capital, Riyadh, Saudi Arabia. Shutterstock/Mohammed Younos.

36 ATLANTIC COUNCIL
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 Assessing Saudi Vision 2030: A 2020 Review

NEOM is the PIF’s most ambitious venture. The $500 bil- megaprojects, are meant to drive foreign investment and
lion development is intended to span a massive 10,000 create thousands of jobs in the short term, and to be pri-
square miles across the borders of Saudi Arabia, Jordan, vatized and contribute to both PIF’s assets and the private
and Egypt. It encompasses a number of smaller projects: sector in the medium to long term.
twelve cities and towns by the coast, six or seven more
inland, an industrial zone, tourist areas, a port, innovation Global Strategic Partnerships and Overseas Investments
centers, three domestic airports, and one international air-
port.120 The crown prince envisions the area as an inde- The PIF has developed a number of high-profile strategic in-
pendent economic zone powered by renewable energy ternational partnerships and has invested large amounts of
with “more robots than humans,” completely automated cash in prominent high-tech companies around the globe.
smart-city infrastructure (including security systems), and
a drone- and pedestrian-friendly city design. It will have its The SoftBank Vision Fund Initiative is the first major interna-
own parallel legal system that is to be attractive to busi- tional partnership that the PIF announced. It is a joint fund
ness owners and investors, and the crown prince hopes (announced in October 2016) to invest in technology com-
NEOM will generate $100 billion annually by 2030.121 panies, with the PIF contributing $45 billion and SoftBank
$28 billion over the next five years.125 However, the PIF is
Many of the PIF’s other big investments are in tourism and reportedly not participating in the second SoftBank vision
entertainment as well. The PIF has plans for an estimated fund, after having planned to invest $45 billion.126
900,000 houses and hotel rooms by 2030 across twenty
projects, and the government is working simultaneously to Shortly after the onset of the coronavirus pandemic and the
make Saudi Arabia more attractive to visitors to fill those corresponding economic slowdown, the Public Investment
rooms.122 Fund made large investments in companies that were espe-
cially affected, including Carnival Cruise Line, oil companies
Beyond these new ventures, the PIF is a significant and Royal Dutch Shell and Total, entertainment group Live Nation,
long-time investor in Saudi banks and in mining, food, ce- and English Premier League football club Newcastle United.127
ment, technology, and industrial investment companies.
The PIF intends to become a more active investor in those Other global partnerships include:
companies.123
■ US Infrastructure Investment Program: The PIF invested
Overall, the PIF is estimated to have spent $22 billion on $20 billion in a joint venture between the PIF and US
new and existing projects in 2018, including awarding private equity firm the Blackstone Group that aims to
contracts valued at $15.3 billion.124 Most of these domes- raise a total of $40 billion for infrastructure investment
tic investments, particularly the entertainment and tourism in the United States;128

120 “NEOM, An Accelerator of Human Progress,” 2019, https://www.neom.com/about/#international; Flanders et al., “Saudi Crown Prince Discusses Trump,
Aramco, Arrests: Transcript,” Bloomberg; Aria Bendix, “Saudi Arabia Wants to Build a $500 Billion Megacity That’s 33 Times as Large as New York City.
Now It’s on Shaky Ground after a Saudi Journalist’s Death.” Business Insider, October 22, 2018, https://www.businessinsider.com/jamal-khashoggi-saudi-
arabia-neom-megacity-2018-10.
121 Justin Scheck, Rory Jones, and Summer Said, “A Prince’s $500 Billion Desert Dream: Flying Cars, Robot Dinosaurs and a Giant Artificial Moon,”
Wall Street Journal, July 25, 2019, https://www.wsj.com/articles/a-princes-500-billion-desert-dream-flying-cars-robot-dinosaurs-and-a-giant-artificial-
moon-11564097568; Glen Carey, Vivian Nereim, and Christopher Cannon, “Sun, Sea and Robots: Saudi Arabia’s Sci-Fi City in the Desert,” Bloomberg,
October 26, 2017, https://www.bloomberg.com/graphics/2017-neom-saudi-mega-city/; Richard Wachman, “Robots to Roam $500 Billion Saudi City,” Arab
News, October 24, 2017, https://www.arabnews.com/node/1182556/saudi-arabia; “NEOM Airport Welcomes Its First Saudi Arabian Airlines Flight,” Arab
News, January 11, 2019. https://www.arabnews.com/node/1433471/saudi-arabia.
122 Azhar, Eltahir, and Khalid, “Factbox: Saudi Sovereign Fund’s Strategy in Focus.”
123 Roll, A Sovereign Wealth Fund for the Prince.
124 Colin Foreman, “Saudi Arabia’s Public Investment Fund Will Spend $22bn on Projects in 2018,” MEED, December 20, 2017, https://www.meed.com/saudi-
arabias-public-investment-fund-will-spend-22bn-projects-2018/; Dominic Dudley, “Saudi Arabia to Ease Off on Austerity Next Year After Economy Shrinks
in 2017,” Forbes, December 20, 2017, https://www.forbes.com/sites/dominicdudley/2017/12/20/saudi-arabia-budget-economy-shrinks/#50167229338c.
125 Mayumi Negishi and Nicolas Parasie, “How SoftBank and Saudi Arabia Settled Their Differences to Birth the World’s Biggest Tech Fund,” Wall Street
Journal, May 19, 2017, https://www.wsj.com/articles/behind-the-long-painful-birth-of-the-worlds-biggest-tech-fund-1495214782; “Softbank Group Corp. to
Establish SoftBank Vision Fund With a Strategic Partnership with the Public Investment Fund of Saudi Arabia,” Public Investment Fund, October 13, 2016,
https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=12.
126 Laurie Clarke, “SoftBank’s $108 Billion Vision Fund 2 Is on Shaky Ground,” Wired, January 16, 2020, https://www.wired.co.uk/article/softbank-vision-fund-2;
Riad Hamade, Matthew Martin, and Archana Narayanan, “Saudi Arabia Doubles Down on SoftBank Bet With Extra $45 Billion,” Bloomberg, October 5,
2018, https://www.bloomberg.com/news/articles/2018-10-05/saudi-arabia-doubles-down-on-softbank-bet-with-extra-45-billion.
127 Arash Massoudi and Anna Nicolaou, “Saudi wealth fund builds $500m Live Nation stake,” Financial Times, April 27, 2020, https://www.ft.com/content/
ad8ea498-6982-478d-a16e-3948b8963076.
128 “Blackstone to Launch $40 Billion Infrastructure Investment Vehicle and New Infrastructure Business,” Public Investment Fund, May 19, 2017, https://www.
pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=19; Kate Kelly and Landon Thomas Jr., “Big Payoff After Blackstone Courted a Saudi Prince,”
New York Times, May 25, 2017, https://www.nytimes.com/2017/05/25/business/dealbook/blackstone-saudi-arabia-investments-infrastructure.html.

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Assessing Saudi Vision 2030: A 2020 Review

■ Russian Direct Investment Fund Initiative: The PIF has renewable energy projects, but no dollar amount was
reportedly contributed close to $2.5 billion to a $10-bil- announced;130
lion fund for joint Russian-Saudi projects; 129
■ Egyptian Joint Funds: The PIF and the Egyptian Inter-
■ China’s National Energy Administration: The PIF signed national Cooperation Ministry set up a $16-billion joint
a memorandum of understanding (MOU) with China’s investment fund, with promises to develop an electric-
National Energy Administration to cooperate on ity plant and agriculture and infrastructure projects,

Beyond strategic partnerships, the PIF has also made investments in and signed contracts with major
entertainment and technology funds:1

■ Posco: The PIF purchased a 38 percent stake in the South Korean steel company’s engineering and construction
division at $1.1 billion in 2015;2
■ Uber Investment Initiative: The PIF purchased a 5 percent stake at $3.5 billion in 2016 in the US company;3
■ AMC: An MOU was signed in 2018 with the US company to open between 50 and 100 cinemas in Saudi Arabia;4
■ Six Flags: An MOU was signed with the US company in 2018 to open a Six Flags theme park in Saudi Arabia;5
■ AccorInvest: The PIF and a consortium of investors purchased a 57.8 percent stake in the real estate financing
company from France’s AccorHotels for $5.33 billion in 2018;6
■ Lucid Motors: The PIF invested $1 billion in 2018 to launch the California-based company’s first electric vehicle;7
■ Tesla: The PIF invested between $1.7 billion and $2.9 billion in the US electric-car company over 2018 to own
between 3 and 5 percent;8
■ Magic Leap: The PIF invested $400 million in the US augmented reality company in 2018;9 and
■ Oyo: An MOU was signed in 2019 with India’s largest hospitality company.10

1 The PIF had previously been in talks to invest in US companies Endeavor and Virgin Galactic, but discussions on both deals halted after the murder
of Jamal Khashoggi.
2 “Public Investment Fund Ac​quires 38 Percent Stake in Posco Engineering Unit,” Public Investment Fund, July 21, 2015, https://www.pif.gov.sa/en/
MediaCenter/Pages/NewsDetails.aspx?NewsID=8.
3 “Saudi Arabian Public Investment Fu​nd Invests $3.5 Billion in Uber,” Public Investment Fund, June 30, 2016, https://www.pif.gov.sa/en/MediaCenter/
Pages/NewsDetails.aspx?NewsID=10; Douglas MacMillan, “Uber Raises $3.5 Billion From Saudi Fund,” Wall Street Journal, June 1, 2016, https://www.
wsj.com/articles/uber-raises-3-5-billion-from-saudi-fund-1464816529.
4 “PIF’s Development Investment Entertainment Company (DIEC) Signs Agreement with AMC,” Public Investment Fund, April 3, 2018, https://www.pif.
gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=39.
5 “PIF Announces Agreement with Six Flags in Connection with the First Six Flags-Branded Theme Park in the Kingdom of Saudi Arabia, Advancing
Strategic Development of the Entertainment Sector,” Public Investment Fund, April 3, 2018, https://www.pif.gov.sa/en/MediaCenter/Pages/
NewsDetails.aspx?NewsID=40.
6 “PIF Partners with Global Investor Groups to Acquire 55% Stake in AccorInvest,” Public Investment Fund, October 2, 2018, https://www.pif.gov.sa/en/
MediaCenter/Pages/NewsDetails.aspx?NewsID=36.
7 Azhar, Eltahir, and Khalid, “Factbox: Saudi Sovereign Fund’s Strategy in Focus”; “The Public Investment Fund Executes Investment Agreement with
Electric Automotive Manufacturer ‘Lucid Motors’,” Public Investment Fund, September 16, 2018, https://www.pif.gov.sa/en/MediaCenter/Pages/
NewsDetails.aspx?NewsID=46.
8 Arash Massoudi and Richard Waters, “Saudi Arabia’s Sovereign Fund Builds $2-Billion Tesla Stake,” Financial Times, August 7, 2018, https://
www.ft.com/content/42ca6c42-a79e-11e8-926a-7342fe5e173f; the PIF sold 99.5 percent of its stock in Tesla in the fourth quarter of 2019; Yun Li,
“Saudi Arabia Fund Dumped Nearly All of Its Tesla Shares in the Fourth Quarter before the Rally,” CNBC, February 4, 2020, https://www.cnbc.
com/2020/02/04/saudi-arabia-fund-dumped-nearly-all-of-its-tesla-shares-in-the-fourth-quarter-filing-shows.html.
9 “PIF Invests $400 Million in Magic Leap, Inc.,” Public Investment Fund, March 7, 2018, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.
aspx?NewsID=37.
10 Azhar, Eltahir, and Khalid, “Factbox: Saudi Sovereign Fund’s Strategy in Focus”; “The Public Investment Fund Announce [sic] the Signing of MOU
with Indian Hospitality Company OYO,” Public Investment Fund, February 19, 2019, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.
aspx?NewsID=50.

129 Andrey Ostroukh, “Saudi Arabia to Invest up to $10 Billion in Russia,” Wall Street Journal, July 6, 2015, https://www.wsj.com/articles/saudi-arabia-to-invest-
up-to-10-billion-in-russia-1436198674; “Saudi Arabia, Russia Fund ‘to Invest over $2bn This Year,” Arab News, June 5, 2019, https://www.arabnews.com/
node/1506886/business-economy.
130 “The Public Investment Fund Announces the Signing of an MOU with the National Energy Administration in the People’s Republic Of China,” Public
Investment Fund website, February 21, 2019, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=51; “Saudi’s Wealth Fund Signs
Renewables Agreement with China—SPA”, Reuters, February 22, 2019, https://www.reuters.com/article/asia-saudi-china-renewables/saudis-wealth-fund-
signs-renewables-agreement-with-china-spa-idUSD5N1ZA01J.

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 Assessing Saudi Vision 2030: A 2020 Review

followed by an agreement for a $10-billion joint fund to Salman promised in 2016 the eventual sale of 5 percent
develop NEOM in 2018;131 of what would later be shown, based on its first inter-
national prospectus, to be the world’s most profitable
■ Saudi-Jordanian Investment Fund: The PIF has part- company.134 MBS planned to gain $100 billion from the
nered with the Jordanian Investment Fund for a com- sale, assuming a $2 trillion valuation, which he could then
bined $3 billion fund (with 90 percent from the PIF put toward some of his most ambitious projects—such as
and 10 percent from Jordanian banks) to better enable NEOM.135
Saudi investments in Jordanian infrastructure, tourism,
and energy projects;132 One major hurdle was preparing the necessary financial
statements to list on an international bourse.136 Ahead of its
■ French Private Equity Investment Initiative: The PIF bond sale in April 2019, Aramco disclosed details about its
agreed to invest $2 billion in French private equity funds production and profits for the first time, and is now required
and $3 billion in the French credit insurer Coface.133 to provide regular financial reports as long as it holds the
bonds.137 The crown prince’s own expectations for the sale
FINANCING VISION 2030 and valuation proved to be another hurdle.

Saudi Arabia continues to rely on oil revenues and has In December, after years of delay, Aramco announced
started generating new revenue through the VAT and it would proceed with a 1.5 percent listing on the Saudi
expat levy. However, to fund the massive development and stock exchange, Tadawul, in what was the world’s larg-
social-welfare projects the state is contemplating, it also est ever IPO. The move is reported to have net the PIF
must bring in new sources of financing for the government, nearly $30 billion.138 It took little time for rumors to resur-
the Public Investment Fund, and state-owned enterprises. face about an international listing to follow. However, the
To finance the Vision 2030 project, the kingdom initiated domestic listing may not have helped Aramco’s case.139
debt sales and bank loans, sought to attract greater for- Soon after the listing opened, Aramco stock (briefly)
eign investment for its projects, and, perhaps most notably, achieved its promised $2 trillion valuation with an influx
promised a partial public offering of 5 percent of Saudi of interest that experts have attributed to government
Aramco, the state-owned oil company. interference.140 An inflated price, and the reminder that
the government is hardly a neutral actor in the process,
The partial IPO of Saudi Aramco received global attention may cause foreign investors to shy away from a future
and intense speculation. Crown Prince Mohammed bin international listing.

131 Ali Abdelaty, “Egypt, Saudi Arabia Sign 60 Billion Saudi Riyal Investment Fund Pact,” Reuters, April 9, 2016, https://www.reuters.com/article/us-egypt-saudi-
idUSKCN0X60VQ; Sam Meredith, “Saudi Arabia and Egypt Agree to a $10 Billion Deal to Build a New Mega-city,” CNBC, March 5, 2018, https://www.cnbc.
com/2018/03/05/saudi-arabia-and-egypt-agree-to-a-10-billion-deal-to-build-a-new-mega-city.html.
132 “The Public Investment Fund Program (2018–2020),” Public Investment Fund Program, 79, https://vision2030.gov.sa/sites/default/files/attachments/PIF%20
Program_EN_0.pdf; “Joint $3 Billion Fund to Serve Two Kingdoms—Saudi Official,” Jordan Times, March 28, 2017, http://jordantimes.com/news/local/joint-
3b-fund-serve-two-kingdoms-%E2%80%94-saudi-official.
133 Azhar, Eltahir, and Khalid, “Factbox: Saudi Sovereign Fund’s Strategy in Focus.”
134 Stanley Reed, “Saudi Aramco Is World’s Most Profitable Company, Beating Apple by Far,” New York Times, April 1, 2019, https://www.nytimes.
com/2019/04/01/business/saudi-aramco-profit.html; “Saudi Aramco IPO: World’s Most Profitable Company to Go Public,” BBC, November 3, 2019, https://
www.bbc.com/news/business-50070823.
135 “Full Transcript of Prince Mohammed bin Salman’s al-Arabiya Interview,” Al Arabiya, April 25, 2016, https://english.alarabiya.net/en/media/inside-the-
newsroom/2016/04/25/Full-Transcript-of-Prince-Mohammed-bin-Salman-s-Al-Arabiya-interview.html; Flanders et al., “Saudi Crown Prince Discusses Trump,
Aramco, Arrests: Transcript,” Bloomberg. Note that banks and experts estimate the valuation at between $1.2 trillion and $1.5 trillion, which would net up to
$75 billion. Javier Blas, “Aramco’s Accounts Show $2 Trillion Valuation Remains a Challenge,” Bloomberg, April 1, 2019, https://www.bloomberg.com/news/
articles/2019-04-01/aramco-s-accounts-show-2-trillion-valuation-still-a-challenge; Alex Lawler, Marwa Rashad, and Saeed Azhar, “Exclusive: Saudi Aramco
Valuation Gap Persists as IPO Talks Resume—Sources,” Reuters, August 7, 2019, https://www.reuters.com/article/us-aramco-ipo-exclusive/exclusive-saudi-
aramco-valuation-gap-persists-as-ipo-talks-resume-sources-idUSKCN1UX1PD.
136 Ellen R. Wald, “Remember That Aramco IPO? Prince Mohammed Does,” Forbes, Jun 17, 2019, https://www.forbes.com/sites/ellenrwald/2019/06/17/
remember-that-aramco-ipo-prince-mohammed-does/#1813a16333e3; Wald is a senior fellow at the Atlantic Council.
137 Stanley Reed, “Saudi Aramco Says It’s ‘Ready’ for I.P.O. as It Reports Half-Year Earnings,” New York Times, August 12, 2019, https://www.nytimes.
com/2019/08/12/business/saudi-aramco-earnings.html.
138 Dmitry Zhdannikov, “Aramco IPO Proceeds to Fund Saudi Industry, Including Defense: Finance Minister,” Reuters, January 21, 2020, https://www.reuters.
com/article/us-davos-meeting-saudi/aramco-ipo-proceeds-to-fund-saudi-industry-including-defense-finance-minister-idUSKBN1ZK1RC; Randolph Bell, “The
Aramco IPO Isn’t Quite Enough to Realize MBS’s Diversification Ambitions,” Atlantic Council blog, December 30, 2019, https://www.atlanticcouncil.org/
blogs/energysource/the-aramco-ipo-isnt-quite-enough-to-realize-mbss-diversification-ambitions/.
139 Benoit Faucon, Summer Said, and Rory Jones, “Saudi Aramco Sounds Out Investors on Fresh International IPO,” Wall Street Journal, December 10, 2019,
https://www.wsj.com/articles/saudi-aramco-sounds-out-investors-on-fresh-international-ipo-11576004672.
140 Ellen R. Wald, “Aramco Hits $2 Trillion. What’s Next?,” Forbes, December 12, 2019, https://www.forbes.com/sites/ellenrwald/2019/12/12/aramco-hits-2-
trillion-whats-next/#4e66785677a5; Summer Said and Rory Jones, “Aramco Valuation Hits Crown Prince’s Coveted $2 Trillion Target,” Wall Street Journal,
December 12, 2019, https://www.wsj.com/articles/aramco-valuation-hits-crown-princes-coveted-2-trillion-target-11576138660.

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Assessing Saudi Vision 2030: A 2020 Review

Between the government, the PIF, Aramco, and other The so-called Ritz-Carlton crackdown on wealthy busi-
state-owned enterprises, Saudi Arabia has raised over nessmen in November 2017 also generated substantial
$100 billion in international bonds and loans since 2016.141 revenue for the government. In the ensuing months, nearly
In October 2016, the government presented its first inter- 400 individuals were summoned on behalf of the crown
national offer in an attempt to partially finance its deficit, prince, and 87 reached settlement agreements that net
and sold $17.5 billion in debt in the largest-ever emerging the government $170 billion in “properties, companies,
market bond sale.142 Since then, the government has sold and cash,” by the time the initiative concluded in January
international bonds totaling some $60 billion, with sales 2019.145 While the move was reportedly intended to crack
twice a year.143 Beyond international markets, Saudi Arabia down on corruption, it also likely had the unintended effect
has offered billions of riyals in a monthly issuance of do- of shaking investor confidence and contributing to massive
mestic sukuk, or financial certificates, since 2015.144 capital flight.146

141 Davide Barbuscia, “Saudi Sovereign Fund to Cut Banks’ Returns with New $10 Billion Loan: Sources,” Reuters, July 25, 2019, https://www.reuters.com/
article/us-saudi-pif-loan/saudi-sovereign-fund-to-cut-banks-returns-with-new-10-billion-loan-sources-idUSKCN1UK1T4.
142 Davide Barbuscia and Sudip Roy, “Saudi Arabia Sets Record with Mammoth $17.5 Billion Bond Issue,” Reuters, October 19, 2016, https://www.reuters.com/
article/us-saudi-bonds-idUSKCN12J1E7.
143 Zahraa Alkhalisi, “Saudi Arabia Borrows $9 Billion with First Islamic Bond Sale,” CNN, April 14, 2017, https://money.cnn.com/2017/04/13/news/economy/
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