Huge amount of money will be invested in the production of Saudi Arabia
In the production of Saudi Arabia, $ 500 billion will be invested. Therefore, the authorities react to events in the global economy. Since 2014, there has been a tendency to fall in oil and gas prices, developed countries invest huge amounts of money in alternative energy sources. Therefore, the income of the Saudi nationals steadily declines, which in the long term jeopardizes the country’s influence in the Asian region.
How to modernize the production of Saudi Arabia
On January 28, 2019, it became known about the approval of the new development plan for Saudi Arabia. It implies diversification of the economic sector and full update of the production. Khalid Al-Falih, the head of the Ministry of Energy of the state, stated the government plans to reduce its dependence on energy carriers.
To this end, the program was approved, which should be implemented by 2030. The total investment will be $ 500 billion.
Al-Falih noted that this initiative is a part of the Vision-2030 plan, which was proposed previously by the head of the kingdom, Mohammed bin-Salman. The idea is to open hundreds of new enterprises; thereby hundreds of thousands of working places will be outside the oil sector. Thus, it will be possible to increase the incomes of state residents.
Experts believe that the main goal of the program is to make Saudi Arabia another major producer of goods for consumption. Now in this market there are such powerful players as Turkey and Pakistan, which since 2000 have greatly increased their influence in the Middle East and throughout the world. These countries have managed to compete even with such a giant as China.
Khalid al-Falih counts on investments not only from the business of Saudi Arabia. He believes that other states will also be interested in the development of the non-oil sector of the kingdom. In the spring of 2019, a number of meetings are planned with internal and external investors, as well as with officials occupying major senior positions in the country
It is necessary to detail the program, since the process of raising funds has already begun, and the initial investments in industrial enterprises, manufacturing, the energy industry, and transport have already been made.
After these sectors have been developed sufficiently, the implementation of the second part of the plan will begin. In its course, the Saudi nationals plan to modernize the military-industrial complex, to build new chemical and petrochemical plants.
The Minister of Transport of the Kingdom Nabil al-Amoudi made his comment on the program. The official noted that the country plans to build 2,000 kilometers of railways, 5 airports and a number of other infrastructure facilities. According to the head of the Ministry of Transport, the implementation of these initiatives will require $ 36.5 billion. Al-Amoudi is confident that in 2020 the logistics sector will be able to increase the country’s GDP by 220 billion reals.
Since 2014, Saudi Arabia has suffered from a budget deficit caused by the cheapening of hydrocarbons. Revenues have fallen, and cannot recover for 5 years, despite the fact that oil and gas returned the part of the cost. The decline stopped in the second quarter of 2018, and was replaced by weak growth by 1.1%. The growth of the economy accelerated in the fourth quarter, when the economy grew by 2.5%, however, the next drop in the cost of energy carriers leveled the effect. Therefore, the Saudi nationals do not have much time to solve problems. Over the course of 10 years for which the program is designed, “green” technologies will further shake the positions of traditional sources.
