News 2020

July 2020

The G20 Summit: A platform to showcase Saudi reforms

Saudi Arabia has shown remarkable leadership of the G20 group of nations during challenging global times. November’s summit to be hosted by the Kingdom provides an opportunity for the kingdom to highlight its economic, cultural and social transformations.

Saudi Arabia assumed the G20 presidency in December 2019, taking the helm of the world’s most influential group of countries and giving the kingdom the opportunity to provide leadership during challenging economic times.

The key G20 theme this year is “Realising Opportunities of the 21st Century for All”. The theme has three aims: empowering people by unleashing opportunities for all, including in areas of healthcare and tourism; safeguarding the planet by tackling climate change and ensuring affordable energy for access; and shaping new frontiers with an emphasis on innovation, digitalisation, artificial intelligence and sustainable smart cities.

These aims dovetail with Saudi Arabia’s own recent moves to raise the standards of living of its citizens, create a vibrant and diverse economy and embrace innovation and digitalisation.

The G20 summit, scheduled for November 2020, provides a global platform for the Saudi authorities to showcase the kingdom's economic, cultural and social transformation.

Economic overhaul

By moving away from an oil-based economy, the kingdom has shifted its focus to manufacturing, robotics, healthcare, education, aviation, transport and leisure. These have created new wealth and fresh opportunities for individuals and the private sector.

The National Transformation Program laid the foundations for a number of successful initiatives by 2020, including digital transformation of justice services, providing digital skills and training packages for 600,000 students, and expanding broadband and fibre-optic network capacity.

The most notable achievement, however, was the initial public offering of Saudi Arabian Oil Co., or Saudi Aramco, on the domestic Saudi Tadawul exchange, in December 2019. The move to list 1.5 percent of shares of the company at SAR32 (U.S.$8.50) per share made Aramco the world’s largest public-listed company, showcased Tadawul’s robust regulatory credentials and allowed the domestic population to participate in one of the world’s most anticipated IPOs in years.

Saudi Arabia also unveiled NEOM City, a U.S.$500-billion futuristic city on the Red Sea Coast. Launched in 2017, its development will be spearheaded by the Public Investment Fund, the kingdom’s sovereign wealth fund, and is expected to generate an estimated annual income of U.S.$100 billion.

Another major project is the U.S.$427-billion National Industrial Development and Logistics Program (NIDLP), focused on industry, mining, energy and logistics. In a short space of time, the NIDLP has granted SAR35 billion (U.S.$9.3 billion) to 40 Saudi exporters.

The early initiatives are paying off. Saudi Arabia saw sharp growth in the number of new investment licenses being issued to foreign companies. More than 1,100 such licenses were issued in 2019 – 54 percent more than in 2018 and three times as many as in 2017, according to Invest Saudi.

The kingdom has also carried out a record number of business reforms in the past year, earning itself a spot in the World Bank’s top 10 global business climate improvers in the annual Doing Business 2020 survey. The country ranked 62nd among more than 190 countries in the 2020 survey, compared to 92nd in 2019.

Cultural renaissance

The kingdom has also taken a number of strides on the cultural and social front. Initiatives include granting permanent residency (Iqama) to skilled and high-performing foreign nationals, liberalisation of tourist visas and opening up the cinema sector. These reforms are creating new avenues of economic growth.

The Saudi authorities have also embarked on improving the health and education standards of its citizens. Over the past four years, Saudi authorities have pumped around SAR632 billion (U.S.$168 billion) into healthcare and social services.

Similarly, SAR811 billion (U.S.216 billion) has been spent in education since 2017. Combined, the two sectors have seen an injection of SAR1.44 trillion (U.S.$384 billion) over the past four years, underscoring the government’s concerted effort to provide quality healthcare and create a skilled workforce.

The launch of Qiddiya, a giga project located 40 kilometres west of Riyadh, is set to be a new entertainment, sports and leisure destination in the region. The sprawling 334-square-kilometre project will feature resorts, malls, a golf course and hospitality, residential, commercial and retail projects. The development expects to attract 1.5 million visitors annually when the first phase opens in 2022.

In just a few years, Saudi Arabia has embarked on a number of reforms that are set to overhaul virtually every aspect of Saudi life. From digitalising government interactions to creating new industrial and service clusters, the kingdom is well on its way to becoming a diverse economy. In November, this transformation will be unveiled to G20 leaders.

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