By By Yousef Saba and Federico Maccioni
RIYADH (Reuters) – Saudi Arabia is strengthening its commitment to an economic transformation plan designed to wean the economy off oil, its finance minister said on Wednesday, as the Gulf country focuses on domestic projects.
Addressing the second day of the Future Investment Initiative (FII) conference, which is gathering global business, technology and financial leaders in Riyadh, Finance Minister Mohammed Al Jadaan said he was happy with progress so far but was not “complacent”.
Crown Prince Mohammed bin Salman is overseeing Saudi Arabia’s ambitious economic overhaul, known as “Vision 2030”, which aims to boost non-oil growth, expand the private sector, and create jobs and new industries.
The plan, driven by the $925 billion PIF sovereign wealth fund, involves massive infrastructure projects, including building entirely new urban and industrial areas, such as a futuristic desert city called NEOM.
The fund, which made its mark on the global stage with high-profile deals, such as investments in Uber (NYSE:UBER) and Japanese conglomerate SoftBank (TYO:9984), now plans to reduce the share of its overseas investments by about a third as it focuses on domestic projects, its governor told the FII on Tuesday.
Foreign direct investment (FDI), which had stalled in recent years, is key for driving the transformation.
The government has a target to attract $100 billion in FDI by 2030, equivalent to almost 6% of its GDP. FDI is on an upward trend, but midway through Vision 2030, FDI numbers indicate that the kingdom could struggle to meet the objective for the turn of the decade.
Despite diversification efforts, oil is still a mainstay of the Saudi economy and amid lower oil prices and production, government earnings have fallen and the Kingdom has begun a spending review, under which some Vision 2030 projects will be delayed or scaled back, and others prioritised.
The high-profile annual FII event is an opportunity for Riyadh to draw in foreign funds.
Jadaan told the audience on Wednesday investors were confident in the kingdom’s plans.
“I really did not come here for Saudi Vision promises. I came here for what Saudi Vision delivered,” Jadaan quoted a “prominent” investor attending the event as telling him.
