Efforts under way in Saudi Arabia to transform the economy by privatizing several key state-owned entities and fostering new trade relations are explored in a new report from the global research and consultancy firm Oxford Business Group (OBG).
‘The Report: Saudi Arabia 2019’ charts the latest developments in the Kingdom’s ongoing drive to diversify its oil revenues through a wide-ranging reform program.
OBG’s report provides details of the move to lay the foundations for a new phase of industrial development by rolling out mega-projects for raw materials that are needed to construct new manufacturing plants. It also considers the key role earmarked for small and medium-sized enterprises in reshaping the economic landscape.
Other segments of the economy analyzed include Saudi Arabia’s important defence and security industry, which was allocated USD 78.4 billion, or 27 percent of the total 2019 budget. The report shines a spotlight on the rising number of joint ventures and investment opportunities emerging in the industry, while also looking at the Kingdom’s plans to boost the volume of domestically produced hardware in the coming years.
Tourism and entertainment are two sectors set to play a significant part in supporting KSA’s diversification efforts, steered forward by a pipeline of multibillion-dollar investment projects which range from resorts and hotels to cultural attractions.
OBG’s report tracks the latest developments in the country’s ambitious plans to boost the number of arrivals from untapped source markets and also charts the various new entertainment offerings that have started to come online in the Kingdom. In addition the report shines a spotlight on the cities of Makkah and Medina, looking at moves to improve connectivity and transport links for pilgrims.
With oil and gas still expected to continue making a major contribution to the economy, OBG provides coverage of Saudi Arabia’s plans to boost downstream offerings, such as petrochemicals, while also diversifying the energy mix. In addition, it provides details of the planned new terminals which will help to boost energy exports.
Commenting ahead of the launch, OBG’s Editor-in-Chief Oliver Cornock said that Saudi Arabia’s transformation into a more mature and diverse economy was accelerating, with record spending in 2019 expected to support new initiatives across the sectors.
“The shift from a public-sector-dominated economy to one where the private-sector is playing a much more prominent role is gaining pace on the back of the Kingdom’s reform program,” he said, adding, “While mega-projects are among the most visible signs of change, the increasing number of smaller-sized businesses and the higher numbers of Saudis entering the workforce, especially women, is equally significant.”
Managing Director for the Middle East, Jana Treeck, added that the creation of one of the world’s largest sovereign wealth funds from Saudi Arabia’s privatization drive would support the Kingdom’s plans to continue investing in the infrastructure needed to attract international companies.
“New transport infrastructure and special economic zones are high on the list of projects being rolled out to tap higher levels of foreign and domestic investment. A draft public-private partnership law could also increase activity in the Kingdom by addressing key investor considerations,” he said.
‘The Report: Saudi Arabia 2019’ marks the culmination of more than 12 months of field research by a team of analysts from Oxford Business Group. The publication assesses trends and developments across the Kingdom, including those in macroeconomics, infrastructure, banking and others. It has been produced with the Riyadh Chamber of Commerce, the Jeddah Chamber of Commerce and the King Abdulaziz City for Science and Technology. Contributions have also been made by HSBC and KPMG. It is available online and in print.