Diversification and reform bring Saudi Vision 2030 closer to fruition

The country has several landmark achievements already under its belt and is set to host the FIFA World Cup in 2034, proving grand ambition pays off when it's followed by hard work

Al Majalla

Diversification and reform bring Saudi Vision 2030 closer to fruition

Maher Chmaytelli

last update on 21 Feb 2025

A few years ago, the words ‘Saudi Arabia’ would have elicited images of Mecca, the Kingdom Tower in Riyadh, and oil installations amidst the dunes. Today, those images still hold, but they are joined by others: the archaeological treasures of AlUla, footballer Cristiano Ronaldo playing for Riyadh club Al-Nassr, the turquoise waters of the Red Sea, and the huge construction site of NEOM, a city of the future.

In a decade, we will look back on the Kingdom hosting Expo 2030 and the World Cup 2034, to name but a couple of big world events. All this is part of Vision 2030, Crown Prince Mohammed bin Salman’s ambitious plan to diversify the Saudi economy away from oil, the wealth from which has propelled it to become one of the world’s richest nations.

The scale of some landmark Vision 2030 projects is immense—over $1.3tn in real estate and infrastructure projects over the past eight years, according to Bloomberg. Although the oil price has fluctuated of late, the government is staying on target despite the impact on its income.

Reforms and projects

For Dr Ihsan Ali Bu-Hulaiga, a prominent Saudi economist and former member of the Shura Council, Vision 2030 is “a blueprint for a modern, prosperous life that seeks out the contribution of the whole society in the process”.

Reforms to empower women—such as lifting the driving ban and male guardianship rules and enacting anti-harassment laws—have “boosted female participation in the production process,” he said. “It stimulated growth by increasing investments and consumer spending, fostering greater social stability and justice.”

The scale of some Vision 2030 projects is immense—over $1.3tn in real estate and infrastructure projects over the past eight years

Embracing digital advances in government services has also helped. Those living in remote areas can now access government services and earn a living, boosting both inclusion and efficiency. This is especially important given the Kingdom's physical size. It is as big as Western Europe, from Italy to Ireland, Portugal to Germany.

Since 2016, around $164bn of real estate contracts have been awarded, according to Bloomberg, with Riyadh a key development area. By 2030, the city will get 29,000 new hotel rooms, 4.6 million square metres of office space, and 340,000 new homes.

Its two flagship projects are Diriyah Gate, a historical and cultural destination and Qiddiya, an entertainment district. The most recent achievement is Riyadh's metro system, one of the world's largest. Opened in November 2024, it runs to 176km.

Next will be the launch of Riyadh Air, which is planned for this year and will connect Riyadh to more than 100 destinations. Saudi Arabia's western seaboard is also experiencing significant development. More than $54bn is invested in more than a dozen giga-projects, including NEOM, the futuristic city on the Red Sea coast.

The kingdom is, therefore, fast becoming the world's largest construction market, as it is also preparing to host the World Expo 2030 and the FIFA World Cup 2034, events which are expected to attract millions of visitors.

AFP — Saudi Arabia's Minister of Sports and Youth Abdulaziz bin Turki al-Faisal al-Saud celebrates after Saudi Arabia was confirmed as host of the 2034 World Cup during a ceremony in the capital Riyadh on December 11, 2024.

Low debt, high reserves

Economic diversification is advancing regardless of the oil income, which has fallen since the 2022 oil price peak. Overall, the economy grew by 1.3% in 2024 and, in the last quarter, hit a growth rate of 4.4%, but there are now budget deficits.

The government is leveraging its ability to borrow at a competitive cost thanks to its low level of debt, high foreign exchange reserves, and the volume of assets owned by the government and the Public Investment Fund (PIF). "We see significant ability to progress with the investment programme and forecast robust non-oil GDP growth," said Monica Malik at Abu Dhabi Commercial Bank.

Saudi Arabia enjoys a strong financial position, with a Moody's credit rating equivalent to the UK's. Its debt-to-GDP ratio is less than 30%, the lowest among the G20 nations. By contrast, the UK is near 100% and Japan's is more than 200%. According to Malik, a low debt burden and substantial foreign exchange reserves give "significant fiscal space" for investment.

The Kingdom can also raise money through government allocations, initial public offerings (IPOs), and the sale of stakes in government and PIF-owned companies. The PIF is the Kingdom's sovereign wealth fund and makes strategic investments both at home and abroad, which plays a key role in executing Vision 2030.

For example, PIF is a major investor in Lucid Motors, which, in 2023, opened its first international manufacturing plant in Saudi Arabia to produce high-end electric vehicles (EVs) for both the Saudi market and export.

Saudi Arabia enjoys a strong financial position, with a Moody's credit rating equivalent to the UK's

Saudi Arabia's broader strategy is to lead the energy transition, so EV manufacturing fits into that, as does mining the Kingdom's mineral wealth. For instance, Saudi Aramco, the national energy company, recently discovered promising lithium deposits—a key component in EV batteries, laptops, and smartphones.

Energy Minister Prince Abdulaziz bin Salman said in January that the Kingdom's mining strategy is to monetise all metals and minerals in its soil, including uranium (for nuclear reactors), gold, silver, lead, copper, zinc, phosphate, bauxite, iron, and rare earths used in the technology sector.

PIF-owned Maaden (also known as the Saudi Arabian Mining Co.) has a $12bn investment plan covering gold, phosphates, aluminium, and copper.

Addressing the challenges

Although Saudi Arabia's construction sector is booming, meeting its 2030 completion schedule will be very difficult. Supply chain disruptions, labour shortages, and escalating costs pose considerable hurdles to be overcome.

Yet, time is of the essence. The Kingdom aims to attract 150 million international visitors annually by 2030, up from around 70 million arrivals in 2023. To achieve this, the government is actively courting $110bn in private-sector investment.

At the end of January, the country took a key step in unlocking that by permitting foreign investment in publicly traded companies owning real estate in Mecca and Medina. This opens a new investment avenue, although direct ownership of property by non-Muslims in these holy cities is still prohibited, and the Capital Market Authority has capped foreign ownership in such companies at 49%.

"Before Vision 2030, tourism was hampered by complex visa procedures, limited ease of movement and accommodation options, and a scarcity of tourist attractions," said Bu-Hulaiga, the Saudi economist, adding that now, it is "as if there is that reads 'visitors welcome.'"

For the government, investment would be welcome, too.

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