Saudi private sector takes larger Vision 2030 role, minister says in Davos

DAVOS: Saudi Arabia is handing the scope of some Vision 2030 projects to the ⁠private sector as it adjusts timelines to avoid economic overheating, Economy Minister Faisal al-Ibrahim told Reuters.

Ibrahim said in an interview in Davos, Switzerland that the government was being “agile” in managing its ambitious development pipeline, rescoping some projects, while maintaining momentum on its Vision 2030 economic transformation goals.”The private sector is ready now and ‌even more eager ‌to participate,” Ibrahim said on Monday, adding: “Recently, some entire scopes of projects were given to the private sector to deliver with some regulatory support and guidelines”.

The world’s top oil exporter ‌is more than halfway through its Vision 2030 plan, which calls for hundreds of billions of dollars in government investment to cut its economic dependence on hydrocarbon revenue by investing in sectors such as tourism.

However, some landmark projects such as NEOM, a futuristic city in the desert by the Red Sea, have faced delays and recalibrations as Saudi Arabia grapples with economic headwinds and logistical constraints.

Reuters reported in October that the kingdom is preparing to shift its $925 billion sovereign wealth fund away from a focus on real estate gigaprojects. Saudi Arabia has been heavily tapping the debt markets in recent years as oil prices, ‌its biggest source ‍of income, have languished below the level needed to bankroll the programme. Ibrahim said adjustments to the ‍timelines and scope of projects were driven by multiple factors, including concerns about inflation, import ‌pressures and economic overheating.

“We don’t want to overheat the economy, we don’t want value leakage by creating increased import pressure, and we don’t want to create an inflationary environment,” he said on the sidelines of the World Economic Forum’s annual meeting.

“We’re very transparent. We’re not going to shy away from saying we had to shift this project, delay it, re-scope it,” Ibrahim said, without mentioning a specific project.

“If you think that the project itself, the brick and mortar … is Vision 2030, that could be a challenge. The project is there to design for an outcome.”

According to this year’s Saudi budget, 2026 ‍will mark the start of a “third phase” of Vision 2030, signalling a shift in focus from launching economic reforms to maximising their impact.

The minister said Saudi Arabia’s non-oil economy now makes up more than 55% of real ‍GDP and is ⁠set to expand further as the kingdom ⁠pushes to reduce its reliance on oil revenues.

He noted that the share of non-oil activities dependent on oil flows has already dropped from about 90% to roughly 70%, with the goal of driving that figure even lower.

Most non-oil sectors, he said, have delivered steady annual growth of 5-10% over the past five years, and the ministry expects both overall and non-oil growth to remain strong-ranging between 4-5% over the next three years.

Saudi Arabia’s focus was now on hosting major international events, with the 2027 AFC Asian Cup, the 2030 World Expo and the 2034 FIFA World Cup as priorities, he added.

On its World Cup preparations, Ibrahim said the organisers were studying Qatar’s 2022 “successful” World Cup tournament model and consulting with Qatari officials. “The Qataris have been very helpful,” he said.