Saudi Arabia adapts to new global realities

Saudi Arabia is revising its ambitious Vision 2030 economic reform program in response to a series of global economic shocks, from the coronavirus pandemic to the ongoing conflict in Gaza, as stated by the kingdom's Finance Minister on Tuesday.

Launched in 2016, Vision 2030 aims to diversify Saudi Arabia's economy and prepare it for a post-oil era. 

The plan, which includes various mega-projects like the futuristic megacity NEOM, is more than halfway completed. However, recent global challenges have prompted a reassessment of the program's feasibility and timelines.

Speaking at an economic forum in Qatar, Finance Minister Mohammed al-Jadaan highlighted how the pandemic, the wars in Ukraine and Gaza, along with issues like inflation and supply chain disruptions, have necessitated a rethink of the kingdom's economic strategies. 

"All these collective shocks that the world is facing also call us to redefine priorities, to review what we are doing, and to optimize our plans," al-Jadaan explained.

Al-Jadaan suggested that allowing more time for the reforms could benefit the Saudi economy by enabling the private sector to develop alongside the government projects. He emphasized the importance of allowing the economy to keep pace with the projects to avoid excessive imports.

The Saudi minister had previously indicated in December that the timelines for some Vision 2030 projects would be extended beyond 2030, while others might be accelerated, though specifics were not disclosed. 

In April, he mentioned that the officials were flexible and willing to "change course" and "adapt" to the economic landscape during a special meeting of the World Economic Forum in Riyadh.

NEOM remains the most publicized project of Vision 2030. Announced by Crown Prince Mohammed bin Salman, the city is expected to house over one million residents by 2030 and nine million by 2045. 

However, a recent Bloomberg report suggested that the developers had scaled back their ambitions to 300,000 residents, with only 2.4 kilometers of the project expected to be completed by the end of the decade.